Sunday, March 21, 2010 by Jonathan D. Silver, Pittsburgh Post-Gazette

A South Side company has employed dozens of convicted felons over the past five years to make fundraising phone calls on behalf of well-known charities in violation of Pennsylvania law, according to publicly available records. By hiring professional solicitors with criminal backgrounds to raise money for diverse and well-known groups, Outreach Associates Inc. appears to have violated Pennsylvania’s 1990 Solicitation of Funds for Charitable Purposes Act.

“If a professional solicitor employed somebody who was convicted of a felony, or a misdemeanor involving dishonesty, then that would be a violation of state law,” said Tracy McCurdy, director of the Pennsylvania Department of State’s Bureau of Charitable Organizations. “Assuming if we were to find something like that to be true that would be something that the bureau would be extremely concerned about.”

In response to inquiries by the Pittsburgh Post-Gazette following a six-month investigation, the company announced Friday that it had suspended nine employees with criminal records. “This shouldn’t have happened. It was wrong,” Dennis McCarthy, the company’s president, said in an interview. “The statute was out there although Outreach operated apparently for decades without anybody saying anything. Ignorance is no excuse.”

Mr. McCarthy said the company’s previous law firm “erroneously advised” Outreach Associates that people found to have committed offenses more than seven years earlier, or committed crimes that were not work-related, could be employed. He pledged a thorough check of the company’s 150 employees to determine whether anyone else has a criminal record. He said Outreach Associates is reviewing hiring procedures and background checks.

Mr. McCarthy, who has been president of the company for 11 months, said Outreach Associates has historically conducted background checks on employees. But those checks were primarily focused on Allegheny County. He changed that scope to nationwide after he joined the company.

As it does with all its workers, Outreach Associates provided the convicted thieves, forgers, drug felons and registered sex offenders who have worked at its call center with potential donors’ home addresses all over the country along with donation information such as the highest amount they pledged. Anyone charging a donation gives the solicitors a credit card number.

It is not known whether the ex-convicts have harmed or stolen from any of the donors they have contacted. Using publicly available court records, the Post-Gazette identified at least 26 fundraisers with criminal records who have worked for the company at various times since 2006. Their convictions, which likely should have prevented their employment at Outreach Associates, occurred between 1981 and 2008.

Of them, 22 are former felons with convictions for a range of crimes including drug offenses, gun possession, conspiracy, arson, burglary, retail theft and sexual assaults. Four were convicted of misdemeanors involving dishonesty: tampering with evidence, false identification to law enforcement, retail theft and theft. Some have multiple convictions.

“We don’t want people with those kinds of felony convictions to be asking for money and obtaining personal information” because of the chance of using it for “potentially illicit purposes,” Ms. McCurdy said. Outreach Associates determined who to suspend without pay last week by reviewing the criminal background information in their personnel files, Mr. McCarthy said. He did not know when those records had been obtained, but said he believed they had been on hand before the Post-Gazette contacted the company.

Questions about disclosure

Outreach Associates, which does business as Direct Advantage Marketing, solicits in 38 states.It is a subsidiary of Integrated Fundraising and Marketing Solutions Inc., headquartered in Newton, Mass. Its Pittsburgh call center is located in the Birmingham Towers office building at 2100 Wharton St.

Filing requirements for professional solicitors differ by state. Pennsylvania requires only the company to register each year, but requires a certification that no one convicted of a felony or a misdemeanor involving dishonesty works for the company. On the forms filed by Outreach Associates with the state, boxes have been checked to make that certification since 2004.

Massachusetts does not prohibit the employment of convicts, but requires that information to be disclosed. On Massachusetts’ annual registrations, a question asking about employees with felony or certain misdemeanor convictions was marked “N/A” — not applicable — in the past two years.

Recent forms in both states were signed by Outreach’s Chief Compliance Officer Howard B. Cloth. In both states, the forms ask whether the applicant or any officer of the company has a criminal record. Mr. Cloth indicated that he does not.

Mr. Cloth, a former lawyer, pleaded guilty in Aug. 1993 in Suffolk Superior Court in Massachusetts to 11 counts of larceny for stealing $393,000 from a corporate client. He was disbarred and sentenced to 9 to 12 years in prison, of which he served nearly three before being paroled in August 1996.

In an interview, Mr. Cloth, 68, of Lexington, Mass., acknowledged his criminal record and said he disclosed it to his bosses. “I made my bed. I have to sleep in it. This isn’t pleasant. I don’t know what else I can say. I’ve tried to lead a righteous life since then. I’m just saddened that I’m going to be brought into this,” Mr. Cloth said.

Asked why he did not disclose his criminal past or that of the callers in Pittsburgh when filling out forms for state regulators, Mr. Cloth said, “Either the disclosure relates to people who are officers, directors or solicitors, of which I am not, or it talks about anyone in the past 10 years, to which it does not apply.”

In fact, the question asked on Massachusetts’ annual registration forms that contain Mr. Cloth’s signature is whether “you or any of your employees …” have been convicted of a felony. Mr. Cloth’s signature appears on the same page.

On Pennsylvania’s form, Mr. Cloth’s signature is above a line entitled “Signature of Principal Officer.” None of the forms reviewed by the Post-Gazette asks for information about convictions only in the past 10 years.

Mr. McCarthy acknowledged that he was aware of Mr. Cloth’s felony record but said he did not know details. He said Mr. Cloth would no longer be allowed to sign registration forms. “I don’t think there is an intent to deceive anybody there,” Mr. McCarthy said. “I don’t know that Mr. Cloth knew that there were these nine people or any other people at any point in time [with records].” Mr. McCarthy downplayed Mr. Cloth’s prominence at the company despite his title and said he was not an officer.

‘Wolf in the henhouse?’

Some of the ex-offenders came to work at Outreach Associates while living at Renewal Inc., a Downtown program that helps to reintegrate offenders into society by providing housing and drug and alcohol treatment. Several people working at Outreach Associates list Renewal’s address as their home address on forms filed with some states.

In some cases, Renewal’s staff helps residents find jobs, sometime at companies with which the program has a relationship. Such was the case with Renewal and Aaron D. Matthews. Mr. Matthews, 21, of Penn Hills pleaded guilty in Allegheny County in January 2008 to robbery, a felony. He carjacked a Penn Hills couple in March 2007, according to a police affidavit. After a brief stint in jail, Mr. Matthews moved to Renewal. A sentencing document from his court folder, available to the public at the Allegheny County Courthouse, is clearly stamped “FELONY.”

According to a petition for early parole, which was denied, Mr. Matthews went to work for Outreach Associates — referred to in court paperwork as Direct Advantage Marketing — six days after completing an inpatient drug rehabilitation program at Renewal. Attached were Mr. Matthews’ work schedule in April and May 2008 and a positive letter from his supervisor, Joan P. Harrigan, who wrote: “Aaron has worked hard to develop the skills needed to raise funds for not-for-profit organizations.”

“It’s ludicrous,” said Penn Hills Police Chief Howard Burton, whose department arrested Mr. Matthews for the carjacking. “The wolf watching the henhouse. You’re providing all this information to individuals who’ve already show a propensity to commit these types of crimes.”

Ms. Harrigan, of Wilkins, is no longer with Outreach Associates. She said she did not remember Mr. Matthews, but she did recall ex-offenders who worked at the company while she was there. She estimated that perhaps 20 of the 120 callers on the evening shift she supervised had criminal records.

Asked what she knew about the state law prohibiting people such as Mr. Matthews from working as a professional solicitor, Ms. Harrigan declined to answer. “I no longer work there,” she said. Mr. Matthews did not last long at Renewal. In July 2008 he was found guilty of carrying a gun without a license — a felony — and is currently in prison.

Renewal ended its arrangement with Outreach Associates nearly two years ago.

“We didn’t want them taking people’s personal information,” said Stephen M. Devlin, Renewal’s vice president. Mr. Devlin said he was unaware of the state law that prohibits offenders from working as professional solicitors. Regardless, he added, it would be up to the employer, not Renewal or Allegheny County to ensure compliance. “We never would have placed anybody there if we knew that,” Mr. Devlin said. Renewal and Direct Advantage Marketing had a positive relationship before ties were severed.

“They had a very, very, very good relationship with us. To our knowledge they never terminated or fired or had any problems with any resident Renewal sent over there,” said Douglas C. Williams, Renewal’s chief executive officer, who also said he was not aware of the law.

“They would call us and we would make it known to the case managers that there were openings at Direct Advantage. It was up to our residents to decide whether they want to do that type of work. It’s up to the employer to do background checks.”

Mr. Williams refused to divulge how many criminals in his program had worked at Direct Advantage Marketing. Records provided by Allegheny County Jail Warden Ramon C. Rustin confirmed that eight Renewal residents with criminal records had been employed at the company between 2007 and 2009.

Federal probation officers in Pittsburgh are aware of convicts working at Outreach Associates — and used that fact as a reason to steer clear of the company. Theodore W. Johnson, chief U.S. probation officer for the Western District of Pennsylvania, said his staff has not allowed their clients to work at Outreach Associates for fear of them being around other people with criminal backgrounds.

“It just doesn’t bode well with us,” he said.

Background checks

As Outreach’s senior marketing director from 1995 to 2007, Diane P. Turner did most of the hiring. She said she did not know of the state law and is not sure she ever hired a felon. “I can swear to God that I never deliberately or knowingly broke a law,” said Ms. Turner, 68, of Sarver. “If I ever hired a felon — and I don’t know if I did — if I did, I certainly did not know I was breaking a law and would not have done it had I known that.”

Mr. Turner said background checks were conducted on every new hire. She said she did not recall exactly how the checks were done or who did them. If anything questionable turned up, such as a drug conviction, she said she contacted the person’s drug counselor and brought the matter to her supervisors for a decision. “Also, if I ever hired anyone with any record whatsoever, I don’t care if it was disturbing the peace, anything that I did had to be approved by people over me.”

Ms. Turner said she would find it hard to believe that criminals would find a home at her old company because it raised funds for many highbrow institutions, including the Pittsburgh Symphony and Pittsburgh Ballet Theatre.

“We were raising funds for organizations where we would have to be able to have really intelligent conversations with donors about political issues, arts issues, things like that,” Ms. Turner said. “The last thing that we would want to do would be to alienate the people we were raising funds for by hiring any questionable people.”

Direct Advantage Marketing was a winner of the Goodwill Industries of Pittsburgh 2005 Power of Work Award, which honored employers who hired people with special needs. In 2003, it was one of 100 companies in the state named Best Places to Work in Pennsylvania.

“You can rest assured,” Mr. McCarthy said, within 30 days “the people who work for Outreach Associates will have all been checked and we will know to a T that everyone there meets the letter of the law. “I wish that was the case now, frankly, but I don’t know. I don’t like not knowing.”