D.C. Schools Food Vendor Settles Whistleblower Lawsuit for $19 million

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D.C. Food Vendor Settles Whistleblower Lawsuit for $19M

D.C. Food Vendor Settles Whistleblower Lawsuit for $19M

Chartwells and Thompson Hospitality, the largest food vendor for the District’s public school system, has agreed to settle a whistleblower lawsuit for $19 million. The suit, which was filed by a former director of food services, alleged that Chartwells overcharged the city and mismanaged the school meals program, The Washington Post reports. Allegedly, the food frequently arrived late, spoiled or in short supply.

The D.C. attorney general’s office launched an investigation as a result of the whistleblower suit. “It is important to ensure that contractors who receive District funds are held accountable for fulfilling their obligations under the contracts, and today’s settlement does just that.” said Attorney General Karl A. Racine. The company settled the allegations without admitting any fault.

The whistleblower began working as executive director of the school system’s Office of Food and Nutritional Services in 2010. In early 2013, he was fired. He also filed a separate lawsuit alleging that he was fired for raising concerns about how the contract was mismanaged. The suit was settled last year for $450,000. He may receive up to 30 percent for the most recent settlement.

According to a previously sealed complaint from the Office of the Attorney General, the whistleblower alleged that Chartwells “knowingly submitted” false invoices to the school. Chartwells entered into a contract with the district in 2008, when the system’s in-house program suffered “million dollar cost overruns”. The lawsuit alleges that those losses did not fare better with the new contract, “Rather, [they] significantly increased.” The contract says that Chartwells is required to buy food “at the lowest possible price”. According to the complaint, however, the company used a corporate affiliate to buy food from “companies that manufacture highly processed foods and charge higher prices.”

This is not the first time Chartwells has encountered problems. Last fall, a student boycott was held at a Connecticut high school over the quality of the food. Chartwell’s parent company, Compass Group USA, paid $18 million to settle allegations by New York’s attorney general in 2012. The company was accused of failing to pass along discounts as mandated by their contracts, which caused more than three dozen school districts to be overcharged.