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Government Watchdog: Anti-Choice Group Misused Millions from Taxpayers (Updated)

Nicole Knight

“In its zeal to defund Planned Parenthood, Texas has wasted money on a group that is misappropriating taxpayer funds and providing no services, leaving women without access to health care."

UPDATE, November 11, 2019, 9:39 p.m.: The Heidi Group must pay back more than $1.5 million in “overpayments and prohibited costs” after the Texas state government uncovered “serious contractual violations” in its inquiry into the organization’s contracts, the Houston Chronicle reports

Texas has funneled millions to the anti-choice Heidi Group that a watchdog organization now accuses of breaking the law by misusing taxpayer funds.

The Campaign for Accountability, a nonprofit government watchdog, filed a complaint Tuesday with the Travis County District Attorney alleging the Heidi Group committed theft under state criminal law by taking state money for services the group never provided.

“Texas taxpayers deserve to know where their hard-earned money has gone,” Katie O’Connor, the Campaign for Accountability’s legal counsel, said in a statement.

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Texas officials contracted with the Heidi Group to provide $7 million in family planning services to families with low incomes when it barred health-care provider Planned Parenthood from the state health-care program. Reports showed the Heidi Group shifted the money to anti-choice crisis pregnancy centers, or fake clinics. A six-month investigation by the Campaign for Accountability found the Heidi Group misspent the money.

“Prosecutors should look into whether the Heidi Group and its founder and executive director, Carol Everett, misappropriated taxpayer funds by failing to deliver the services pledged in state contracts, but nevertheless continued to submit reimbursement requests,” O’Connor said.

Campaign for Accountability officials filed a complaint with the U.S. Internal Revenue Service, asking the government to strip the Heidi Group of its tax-exempt nonprofit status. Through a public records request, the Campaign for Accountability discovered the Heidi Group had spent as much as 11 percent of its annual expenditures in one year on the “Heidi Group Cruise.” The anti-choice organization allegedly engaged in unreported lobbying and prohibited acts, such as electioneering and endorsing political candidates for state and federal office.

The complaint accuses the anti-choice group of a pattern of financial mismanagement, including operating for nearly a decade while technically insolvent. Since 2002, the Heidi Group has been in debt to its founder and CEO, Carol Everett, according to the complaint. Meanwhile, the Heidi Group has contracted with providers ineligible to receive state funds.

Responding to the accusations, Everett told the Dallas Morning News, “We’re here, our books are open, we’re not hiding from anyone. We’re not hiding anything, or from anyone.”

Such complaints are not new. Last year, critics called for an investigation of the Heidi Group, telling Rewire that Texas Health and Human Services Commission “just ignored the definition” of family planning clinics when it approved the Heidi Group contract.

After a critical Associated Press investigation this year, Everett told a deputy in Gov. Greg Abbott’s office: “No, we don’t look good, and no, we’re not doing what I planned to do, and no, we’re not doing what I wanted to do,” according to a voicemail the Campaign for Accountability obtained through an open records request.

The state said last month that it would cut the Heidi Group’s funding by $4 million after the organization failed to meet its own goals in providing family planning services to families. A spokesperson for the Texas Health and Human Services Commission told the Texas Tribune the funding cut was meant “to make sure we’re maximizing services for women.”

Amid reported problems, Texas continued to fund the Heidi Group, signing contracts in 2016 and 2017 worth $7 million, according to the Campaign for Accountability.

“In its zeal to defund Planned Parenthood, Texas has wasted money on a group that is misappropriating taxpayer funds and providing no services, leaving women without access to health care,” O’Connor, with Campaign for Accountability, said.

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