March 19, 2018

PA Gov’t Abandons Attempt To Recoup Misspent Taxpayer Funds

Last week the Philadelphia Inquirer reported that the Pennsylvania Department of Human Services (DHS) would not seek to recoup misused taxpayer funds from Real Alternatives, a controversial state contractor that operates anti-abortion centers throughout the state. The funds in question were the subject of a lengthy and damning audit by the state in 2017.

“DHS is really adding insult to injury. Not only is DHS not even attempting to clawback misused taxpayer money, but the agency is also continuing to enrich that very same dishonest contractor,” said Equity Forward executive director Mary Alice Carter. “This isn’t hard – it’s time for DHS to stand up for taxpayers by recouping their money, releasing all records related to this contract and holding Real Alternatives accountable for its misconduct.”

Equity Forward, a reproductive rights watchdog group, recently took on DHS in Commonwealth Court for records related to RA’s multi-million dollar contract. Tax records show that 99% of RA’s funding comes from taxpayers, even while their CEO makes nearly $300,000 a year.

For more information on RA and their questionable practices, CLICK HERE.

Due to new reporting and Equity Forward’s push for transparency, we have gradually begun to gain some minor insight into DHS and RA. Here’s what we have learned from the most recent Inquirer’s report:

Real Alternatives’ CEO makes $30,000 more than Governor Wolf and roughly 7 times the median household income for Harrisburg, which is $32,688 in 2016 dollars according to

“[Real Alternatives CEO Kevin Bagatta’s] salary has also grown. In 2015, he earned $228,044 under the Pennsylvania grant. (He also got $58,000 from Indiana, tax records show.)” [Philadelphia Inquirer, 3/16/2018]

DHS said in fall, 2017 that they would be recouping taxpayer funds that Real Alternatives inappropriately skimmed off the top of grant monies. Now, they have completely abandoned that promise.

“Meanwhile, DHS seems to have backed away from promises to get tougher with Alternatives. Last August, in a letter to DePasquale, DHS acting secretary Teresa Miller said the department would ‘seek to recover funds collected by Real Alternatives from the 3 percent fee arrangement’ and ‘include explicit language in future agreements …ensuring that all grant funds are used for the benefit of Pennsylvania residents.’”

“But the new contract that DHS and Alternatives signed in January merely says the company must pay its subcontractors ‘without any deduction.’ And DHS has decided not to recoup the contested taxpayer funds because that would require ‘a protracted lawsuit using taxpayer funds,’ a DHS spokesman emailed last week.” [Philadelphia Inquirer, 3/16/2018]

Despite a scathing report from Auditor General Eugene DePasquale where he suggested RA was “siphoning funds” from the grant agreement, DHS signed a new, three-year contract with RA. The public only knows about this newly signed contract due to a recent column in PennLive, as it was not made available by DHS prior to this coverage.

“Real Alternatives’ five-year, $30.2 million grant expired June 30, 2017, but was extended by DHS through October of last year. The grant has since been renewed June 30, 2019, documents show.” [PennLive, 3/1/2018]

The more the public learns about Real Alternatives, the more questions appear. However, there is one overarching question that has yet to be answered: What are Real Alternatives and the Department of Human Services hiding?