Group managing federal funds wants to avoid conflict

Thursday, June 24, 2004 | 9:36 a.m.

Several members of the board and staff of the Workforce Investment Board -- a group that controls nearly $14 million in federal funds -- said Wednesday that federal policy should be changed to prohibit people from serving on the board if they also receive those funds.

The comments -- several of which came from members of committees that advise Congress on the federal act authorizing the funds -- came on the heels of the board's quarterly meeting, during which it accepted state Senate candidate Steven Horsford's resignation.

Horsford served on the board nearly four years, while also directing a nonprofit organization called Nevada Partners, Inc. During the time he served as one of the 52 members of the board, it voted to give his organization millions of dollars in public funds.

Though he wouldn't comment on Horsford's case directly, Richard Blue, manager of the investment board's day-to-day activities, said after Wednesday's meeting that he thought "it would be advisable not to have members of the board who receive money from the board."

Horsford, president and chief executive of the nonprofit organization, which trains people to find jobs, said in a statement Tuesday that he resigned from the board because of "personal and professional commitments."

The investment board may be better off if it avoids taking on members with potential conflicts of interest in the future, said chairman Richard Brewer. At the same time, Brewer added, the board is governed in part by federal law. Brewer, who was reelected as chairman in Wednesday's meeting, said he has steered the board for about eight years.

"A complete revision of federal law could be useful," he said. "There ought to be certain parameters.

The federal law could dictate that "if you choose to provide services under the Workforce Investment Act, then you can't sit on the board," he said.

"That would eliminate the concern."

The Workforce Investment Act, passed in 1998, created workforce investment boards around the country, charged with passing along federal funds to help people train for and find jobs.

Brewer also serves on the National Association of Workforce Boards, which advises Congress on the law. He said the issue of conflict-of-interest has been controversial nationwide.

"The composition of these types of boards and who sits on them is a concern around the country -- and has been for the last several years," he said.

Horsford's organization got $2.3 million from the investment board during the fiscal year ending June 30. The budget for the board was $13.9 million during the same period, meaning about 17 percent of its funds went to Nevada Partners.

For the upcoming year, Nevada Partners got $1 million from the board, a third of the organization's total budget.

"We didn't need to have a person who was receiving that much money," said Barbara Robinson, who said she has been on the board about a year.

"Personally I would rather not have anyone on the board receiving money from the board," she said.

And though the investment board's by-laws prohibit members with interest in any organization or business that receives funds from voting or speaking about the funding, Robinson said there are ways around that prohibition.

"Before meetings, they've already contacted people and done their lobbying," she said.

But Blue, who serves on the Employment and Training Council, a group that works with the U.S. Conference of Mayors to shape WIA policy in Congress, said the law creating investment boards has certain built-in obstacles that must be overcome if the conflict-of-interest issue is to be resolved.

"The way the board is prescribed, it's very incestuous," he said.

"The intent was to get broad sectors -- but the fact is the perception of conflict-of-interest is there," he said.

By law, board members are appointed by a group of local elected officials, and most of them must be from the private sector. Additionally, there must be members appointed from economic development, education, organized labor and community-based organizations.

The AFL-CIO nominated Horsford to be the labor representative on the board, according to his letter of resignation, a situation that Blue called unusual, given his position directing a nonprofit organization receiving funds from the investment board.

The 31-year-old Democrat, who is seeking the seat in the Legislature that will be left open by by Sen. Joe Neal, also directs the Culinary Training Academy, an institution located at Nevada Partners funded by hotels with employees who are members of the Culinary Union. The Culinary's parent union, Hotel Employees and Restaurant Employees International, is a member of the AFL-CIO.