A KREM 2 NEWS SPECIAL INVESTIGATION

04:56 PM PDT on Thursday, May 6, 2004

By RANDY SHAW / KREM 2 News

KREM

EPHRATA, WA. - A little more than a year ago, a KREM 2 News investigation revealed discrepancies and outright fraud in some state licensed day cares.

In the little town of Mattawa, Washington alone, KREM 2 found day care operations on nearly every corner, 51 of them.Many of these “for profit” day cares are run by people who are in this country illegally and all of them are licensed by the Washington State Department of Social and Health Services and were paid thousands of your tax dollars a month.

What’s happened since then? Allegations that DSHS is hampering criminal investigations launched by the state auditor’s office and the Grant County Sheriff’s Office. “Because we saw based on the story you did, we saw the potential for gross fraud,” said Grant County Undersheriff Ken Kernan.

And state auditors did too.

It’s investigation into Mattawa day cares revealed flagrant use of fake social security numbers, lying on applications and falsified documents.

As a result, auditor’s questioned “an estimated two million dollars” that D-S-H-S had already paid to these day cares.The D-S-H-S told auditors it corrected the problems and even turned some cases over to the Grant County Sheriff’s Office for action. “We know it’s a crime," said sheriff Frank De Trolio. "You know it’s a crime. But they don’t want to look at it that way.”

The sheriff said D-S-H-S has refused to turn over crucial evidence, the paperwork needed to prosecute. At the Grant County Courthouse in Ephrata, Washington, top officials are extremely frustrated. They said that D-S-H-S has hampered their investigation. In fact, it may border on obstruction of justice. Something that Dennis Braddock, the top man at D-S-H-S denies. “That is a very serious charge," said D-S-H-S secretary Braddock. "I hope they have and I hope you have documentation and back up for that, because that is a very serious charge.”

“These are crimes being committed and there’s a massive amount of taxpayers money that’s gone out the door," said prosecutor John Knodel. "The auditor’s office seems to agree with that and yet we don’t seem to get any interest from D-S-H-S about doing anything about it.”

“I have to tell you right now, my feeling is out of the 51-licensed day care centers in Mattawa, I would say that 90 percent of them are fraudulent,” Sheriff De Trolio said.

But when the sheriff pushed that theory, he says D-S-H-S stopped cooperating and important paperwork suddenly disappeared. “Well, the reports have vanished!" De Trolio exclaimed. "The reports their investigators did earlier seem to have vanished.”

The sheriff said he suspected criminal activity in 40 of Mattawa’s 51-day cares, but he said D-S-H-S only provided a handful of files. “They decided, D-S-H-S decided that they weren’t fraud," De Trolio said. KREM 2 News anchor Randy Shaw then asked the sheriff, "D-S-H-S runs Grant County?" De Trolio replied, "D-S-HS does not run Grant County, but if we can’t get access to those files, how do we do it?”

They could subpoena, but Grant County doesn’t have the money to go up against a state financial goliath like D-S-H-S. “It’s a huge organization, with billions of dollars in operating budgets and they are almost impregnable,” De Trolio said. “I don’t understand this excuse that he won’t subpoena us, because we’re big and their small," said D-S-H-S' Braddock "I mean if it’s a serious case why doesn’t he subpoena?”

The prosecutor said if D-S-H-S were cooperating he wouldn’t be forced to subpoena. So the cases sit in a cardboard box.

Here’s the bottom line. D-S-H-S admits overpaying some Mattawa day cares and admits taxpayers were bilked out of hundreds of thousands of dollars. But the D-S-H-S has never recovered a single penny. “If you’ve received a license fraudulently, we will remove that license,” Braddock explained.

However, the D-S-H-S has yet to revoke a single license in the cases, not even the dozen that used fake social security numbers. And to top it all off, its never missed a payment to any of them. “To our knowledge, D-S-H-S is still paying them,” Sheriff De Trolio said.

Friday night, KREM 2 News will take a look at other investigations that may connect some of these state funded day care operations to the illegal drug trade in central Washington.