Seedco: Obamacare’s Fraud-Stained Navigators

Welcome to ObamaWreck! Americans nationwide spent Tuesday struggling with the much-hyped "Affordable Care Act" health insurance exchanges. Server meltdowns, error messages and security glitches plagued the federal and state government websites as open enrollment began. But when taxpayers discover exactly who will be navigating them through the bureaucratic maze, they may be glad they didn’t get through.

U.S. Health and Human Services Secretary Kathleen Sebelius controls a $54 million slush fund to hire thousands of "navigators," "in-person assisters" and counselors, who are now propagandizing and recruiting Obamacare recipients into the government-run exchanges. As I warned in May, the Nanny State navigator corps is a serious threat to Americans’ privacy. Background checks and training requirements are minimal to nonexistent. A history of fraud is no barrier to entry.

Case in point: the seedy nonprofit Seedco. This community-organizing group snagged lucrative multimillion-dollar navigator contracts in Georgia, Maryland, Tennessee and New York. The New York Post reports this week that the outfit "is partnering with dozens of agencies, such as the Gay Men’s Health Crisis, Food Bank for New York City and the Chinese American Planning Council, in each of (the Big Apple’s) five boroughs." They’ll have access to potential enrollees’ income levels, birthdates, addresses, eligibility for government assistance, Social Security numbers and intensely personal medical information.

Given the enormous responsibility to handle sensitive data in a careful, neutral manner, combined with the overwhelming pressure to boost Obamacare enrollments, you’d think the feds would only choose navigators with the most impeccable records. Yet, less than a year ago, Seedco agreed to settle a civil fraud lawsuit "for faking at least 1,400 of 6,500 job placements under a $22.2 million federally funded contract with the city."

Seedco’s corrupt behavior went far beyond defrauding taxpayers through abuse of New York City programs, federal Labor Department funding and federal stimulus dollars. Seedco (which stands for "Structured Employment Economic Development Corporation") tried to destroy and defame whistleblowing official Bill Harper, who discovered and reported the rampant falsification of data.

First, Seedco denied the charges; next, they trashed Harper’s reputation in the pages of The New York Times. Only after the U.S. Attorney’s office in Manhattan brought suit did the organization acknowledge systemic, repeated wrongdoing. Seedco forked over a $1.7 million settlement in December 2012. Mere months later, they were racking up federal Obamacare navigator work.

The feds and Seedco assure us that new management is in place. They rearranged some deck chairs, created a new "compliance program" and hired an independent reviewer. But an ethos of by-any-means-necessary book-cooking and a culture of intimidating whistleblowers don’t disappear overnight. Seedco shredded documents for three years to phony up their job placement statistics; city government overseers knew about it. The Nonprofit Quarterly noted that Seedco’s fraud was "kind of breathtaking" in its "creativity and illegal audacity," including:

—"Taking credit for a job candidate’s prior employment as job placements;

—Reporting job placements when the job candidates remained unemployed;

—Falsifying dates of job placements;

—Using other Seedco programs to collect information on clients in order to falsely report job placements; and

—Reporting job placements for people who were not Seedco clients and had not been placed in their jobs by Seedco."

The feds detailed how Seedco managers would instruct clerical workers to troll and for resumes and then "report the employment of individuals sourced from those downloaded resumes as job placements." Other employees exploited their relationships with businesses to "gather information from the businesses’ current employees. Seedco then used that information to falsely report that employment as a job placement obtained for the candidate by Seedco, although the individuals had no prior relationship with Seedco and had not been recruited into the job by Seedco."

This entire government-nonprofit alliance rests on dragooning as many people as possible into government programs, including food stamps, CHIP (the federal Children’s Health Insurance Program) and now Obamacare. One of Seedco’s officials actually said the fraud case "made us a stronger organization." Yes, they actually sold their deliberate number-fudging as an asset instead of a liability. And four states swallowed the pitch whole. The spirit of fraud-stained ACORN and its Nanny State progeny lives.

So, buyers, beware: Obamacare security "glitches" are not just a bug. They’re a feature.

Michelle Malkin is the author of "Culture of Corruption: Obama and his Team of Tax Cheats, Crooks and Cronies" (Regnery 2010). Her e-mail address is


  • D Parri

    Michelle, I just tried to go to the ‘Marketplace’ and guess what? Correct! The website could not deliver that page to me, but they did say “hang on, we’re working to fix that problem!” Being busy during rush-hour traffic on a website is not uncommon, but it is 3:48 a.m., CST–not exactly rush-hour.

    Nonetheless, I had managed to get on the site the day before and I compared a few plans and their reported ‘premiums’. The premiums are subject to change and would you care to venture which way they’re headed?

    Personally, I think that it is pretty f***ing ridiculous what the quoted costs would be with even the least expensive I could find. $213/mo doesn’t sound too bad, but when you factor in the deductible ($10,000) and co-pays (30%), this plan would cost a minimum of $2,556 for coverage ONLY, and the benefits would not begin until at least $12,556 was paid for the deductible and premiums. Once the co-pays were factored in there would probably be $14,000+ in out-of-pocket costs that I could be looking at in a single year. Now, what kind of benefit would that be? An individual working full-time at $7.50/hr would pull in $15,600 in wages before taxes. After SS & Med taxes that then becomes $14,406. Just enough to pay the annual premium, the deductible, and the co-pays. Geez………what a fantastic plan. NOT!

    Remember, get the word out…Republicans need to take control of the full Congress so that they will be able to rally a 2/3 majority and repeal OCare even without the president’s approval. It can be done…it HAS to be done.

    • D Parri

      Oh, BTW, I have some comments to make regarding the almost incomprehensible potential for fraud and disaster within this system, but I’ll save it for another day.

      Please continue to report the debacles already occurring such as Seedco. Good job!

  • Concernedmimi

    The culture of corruption (which I read, Michelle) still remains but in this administration it’s pumped with steroids and who knows what else. Just watched hearing on a Mr. Beale who worked in homeland security for 22 years but never showed up for work; also pretending to be cia operative. He not only was paid salary but bonuses and recently held retirement party. This is par for greedy, corrupt democrat party!

    • Wil

      The Democratic Party hasn’t been in control for the last 22 years. Neither has Homeland Security!

  • sjangers

    In my experience with non-profits like Seedco, lack of marketplace accountability makes it very easy for this sort of deception to take root and flourish. Government oversight is hit-or-miss and often ends up creating a great deal of inefficiency while having limited impact on dishonesty and even outright fraud. And when organizations like this get caught it goes down pretty much as you indicated, Michelle. A few faces get moved around, maybe someone becomes a scapegoat, the deck chairs are shuffled, and the culture doesn’t change. The corruption remains.