A District lawmaker said Thursday that D.C. should end its contract with a nursing home operator if the company refuses to reimburse the city for a $1.8 million fine that taxpayers were forced to pay.
“I want our money back, or I no longer want to do business with them,” at-large Councilman David Catania said during an often tense hearing with officials of VMT Long Term Care Management, a city contractor that runs publicly funded nursing homes in District buildings. “I see no reason to continue to do business with this company.”
Catania’s concerns stem from a September report by the D.C. inspector general that said VMT, a District contractor for decades, settled a wage dispute with the Labor Department by using city money without proper authorization from the municipal government. The company drew the funds from a now-shuttered account on which it was a co-signatory with the District, but the Office on Aging did not know of the transfer before it took place.
“VMT … paid its DOL fine using funds from a District investment account without District authorization,” Inspector General Charles Willoughby wrote in the audit, which estimated taxpayers lost about $2.7 million over the life of the company’s contract. Investigators attributed some of the losses to “questionable hiring practices and … improper account management.”
The company has repeatedly denied any wrongdoing, a stance its chief financial officer reiterated to lawmakers.
“The District has no basis for recovery against VMT,” Scott Taylor said, because the settlement was in relation to operational expenses. He and other company officials said they are awaiting a ruling from the District’s Contract Appeals Board about the reimbursements.
But Catania, who described the transaction as “inexplicable,” said he was ready to propose emergency legislation to sever the District’s ties with the company that leases and manages a city nursing home if it doesn’t pay up promptly.
“It is incomprehensible to have a government contractor using government funds to settle a Department of Labor investigation,” Catania said. “It is as close to an act of theft as you can find. It is a clear misuse of funds.”
Ward 4 Councilwoman Muriel Bowser did not say if she would back Catania’s proposal, but she said the District should be reimbursed.
“This business owes the District money, and we have to pursue the money,” Bowser said.
A mayoral spokesman had no immediate comment about whether Mayor Vincent Gray would support Catania’s legislation, but the Gray administration has been pursuing the reimbursement through litigation.
