EOB sees exodus of key officials before feds arrive

Thursday, April 1, 2004 | 11:33 a.m.

Only days before two federal inquiries into problems at the Economic Opportunity Board, five of the agency's administrative employees and two board members have been laid off or resigned -- including Mike Husted, the agency's highest ranking employee, and George Cotton, human resources director.

In Cotton's letter of resignation, handed in this morning, he said he "tried to stay out of the ongoing infighting ..." at the troubled agency, but that he opposed a recent decision to name Diba Hadi -- administrator of the agency's child care assistance program -- as head of a temporary "crisis team."

"I'm frustrated with the entire process," Cotton said from his office this morning. "They put a person in control who to a great degree caused the crisis." The child care assistance program Hadi directs has not been able to account for $2.1 million in missing state and federal funds, one of many problems facing the agency in recent weeks -- drawing two separate federal inquiries.

But state Sen. Joe Neal, D-North Las Vegas, the interim spokesman for the agency, said that Hadi's position in the agency made her "the logical person to get the data needed to respond' to the federal inquiries.

Husted, meanwhile, sent a letter to the board dated March 29 detailing "destructive actions" by some board members that, if not stopped, would cause him to resign. He could not be reached for comment Wednesday.

"While I hope this letter will be a catalyst for change from within our organization," Husted wrote, "it may simply end my employment with EOB."

Husted's resignation was announced at the end of the agency's monthly board of directors meeting Wednesday -- a meeting that was otherwise business-as-usual, despite the organization's spate of recent troubles: the missing funds, which prompted one federal inquiry, bad reviews of the agency's Head Start program, cause of the other do-or-die inquiry, and the previous loss of its executive director and chief financial officer.

None of those issues were discussed at the meeting and three committees listed on the agenda simply said they had nothing to report.

One of the few outward signs of the problems at Wednesday's meeting was that, unlike prior gatherings of the board, this one lacked a free lunch spread. A March 17 note to the board members advised them "due to cost containment lunch will not be provided ..."

Husted, whose resignation was announced after the closed-door executive session, had been the highest-ranking official left in the power vacuum created in recent months at the $60-million agency, the largest nonprofit group in the Las Vegas Valley.

Husted's 2004 salary was $100,000, making him the second-highest paid EOB employee behind Executive Director Marcia Rose Walker, who earned $125,000 before she resigned in recent weeks. Cotton's salary was about $80,000.

Husted's resignation letter said federal officials from two agencies had, in recent weeks, cited "(b)oard dysfunction, unconstructive behavior, involvement in staff functions and failure to act as a unified board as impediments to retaining program funding."

It was also learned Wednesday that the agency lost Mark Antaky, director of risk management, George Andersen, business manager for the Head Start program before the 2003 federal review, and Carlita Alexander, executive secretary. Together, the three earned about $135,000, Neal said.

Antaky did not return calls seeking comment.

When asked whether the three administrative employees resigned or were fired, Neal said, "They were downsized."

"You cut back on staff when you don't have any money to pay their salaries," he said.

Neal said the changes would not affect the agency's day-to-day operations, which include running about 30 programs that provide such services as child care, senior day care and drug and alcohol addiction treatment.

Neal also said a decision was reached Wednesday on an appeal former Chief Financial Officer Debra Santos made of her January 30 firing by Walker. Her firing stands, he said. Santos has retained an attorney to contest the decision.

The agency also had two board members resign: Henderson City Councilwoman Amanda Cyphers and Urban Chamber of Commerce President Hannah Brown. Cyphers said she delivered a letter of resignation to board chairman Claude Logan Tuesday. Logan was not at Wednesday's meeting. Brown's resignation was announced at the meeting, as well as her acceptance of the interim executive director position. In that capacity, Neal said, Brown has named Hadi head of the crisis team.

At the meeting, it was also announced that Brown will work with a consultant in directing the agency, but Neal said he did not know how much the consultant would be paid or how he or she would be chosen.

Noting the exodus from the agency, Cyphers said, "People seem to be dropping like flies."

Cyphers had been the newest board member. She said she decided to step down after "spending the whole weekend thinking about all these articles" -- referring to newspaper stories detailing the agency's financial and administrative problems.

Cyphers said she couldn't devote enough time to her duties on the board.

"They need people who are there more than once a month ... to get back where they need to be."

The whirlwind of changes at the EOB occurred days before two separate federal teams arrive to look into the agency's two largest programs: child care assistance, which receives more than $20 million in federal and state funds; and Head Start and Early Head Start, which together receive more than $12 million in federal funds. Other issues, such as EOB-owned property and credit card accounts, will also be addressed. Both teams will be at the agency April 4-8.

The $2.1 million is missing from the child care assistance program.

The Head Start program has received three consecutive negative reviews every three years dating back to 1997 and Health and Human Services Department consultants and officials will be looking at bookkeeping and other problems that, if not resolved, will jeopardize the agency's future funding.

Windy Hill, associate commissioner of the Head Start bureau in Washington and leader of one of the reviews, could not be reached for comment on the 11th hour changes at the EOB.