Word: maximus
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...Maximus stands out because its $127 million in annual revenue makes it the nation's largest company specializing in welfare work. Mastran, an Air Force veteran and former Pentagon "whiz kid," got his start managing contracts and grants for the Department of Health and Human Services. He began working alone out of his home and in 22 years managed to build a company that has 1,600 employees in 34 offices nationwide. When Maximus went public this summer, analysts rushed to rate the company a "buy," and the stock is already up almost 50%. But the outlook for private welfare...
...Maximus, as well as the other private welfare companies, can point to a number of successes across the country. Its "Fairfax Works" program in Fairfax, Va., has moved thousands off welfare into real-world employment, free from government subsidies. A Lockheed Martin welfare program in Dallas has placed 76% of its clients in new jobs paying an average of $431 a week, exceeding federal goals. But the growing number of cases in which things have been going wrong have begun to capture more of the headlines. A Maximus child-support-collection program in Colorado has come under fire...
Even more troubling are charges that private welfare workers have acted abusively toward human-services clients. In New Jersey, families with mentally disabled relatives in state institutions were contacted by Maximus and given as few as 10 days to hand over complicated financial data, with the threat that loved ones would be kicked out. "They scared me," says Louise Bilicki, the widowed mother of a 49-year-old who is mentally and physically handicapped. "Their demands were outrageous--if I didn't give the information to them immediately, they would cut off services to my son." State welfare officials...
...public employees," says Geraldine Jensen, president of the Association for Children for Enforcement of Support. "When I go into one of these companies, I'm not talking to a district attorney I can vote out of office." Some critics are troubled by all the money being made. Since taking Maximus public through an IPO this summer, Mastran has made $18.8 million in cash, and he holds stock worth an additional $110 million, though he is barred from selling it for years. Maximus contends that its profits come not from the poor themselves but from improvements it makes in the delivery...
...there any role for private companies in welfare reform? The best case for it is the poor job government has historically done on welfare. For all Maximus' problems in the Connecticut child-care program, the state operation it took over had major flaws of its own. Three of its four child-care systems were not even computerized, which meant workers had to calculate benefits by hand and store data in folders. With all this in mind, Connecticut decided after a review last month to continue Maximus' contract and triple the amount it pays per child-care case. Welfare...