Fostering Profits

In the summer of 2004, a 15-year-old boy, needy and eager for attention, was driven down a road that stretched through the endless flatlands of Maryland’s eastern shore. The boy, known in court records as R.R., arrived at a dirt driveway, where a sign on top of a wooden post announced Last Chance Farm.

Four separate couples lived at Last Chance Farm. All were related to one another and all earned money taking care of troubled children who had been placed in foster care, including R.R.

But R.R.’s new guardians weren’t directly supervised or paid by the government. They had been signed up as foster parents by a giant corporation called National Mentor Holdings, which, over the last three decades, has turned the field of foster care into a cash cow. At any one time the company has an average of 3,800 children and teenagers in its foster homes in 15 states around the country.

Stephen Merritt.

Wicomico County Sheriff's Office

Not long after R.R. arrived, Stephen Merritt, the boy’s new foster father, gave R.R. a beer. Then a cigarette. Soon a joint. When the boy was buzzed, his foster father slipped a hand into his pants to fondle him. Then he performed oral sex on the boy.

R.R. had courage. He told the caseworker overseeing his foster placement what was happening. But R.R.’s caseworker, according to the story R.R. told in court records, took no action. The caseworker worked for Mentor too, and instead of filing charges, or even removing R.R. from danger, the caseworker sent him back to Last Chance Farm. It was only after R.R. complained a second time, according to court documents, that Mentor took him from the home.

And there were more indications of sexual abuse at Last Chance Farm. A separate police investigation involving another child had taken place in 2003. Then another in 2006. A psychologist sent a letter to Mentor in 2010, warning of “a huge red flag" about Merritt’s interactions with a child.

Even so, the abuse continued, boy after boy. When the police finally descended in 2011, they found sex toys and lube scattered about and victims who told stories similar to what R.R. had told his Mentor caseworker seven years earlier.

The abuse at Last Chance Farm may have been an extreme event, but Mentor’s blunders in screening, training, and overseeing its foster parents are not. A BuzzFeed News investigation has found that the problems at Mentor are not limited to a few tragic cases but are widespread.

Few states make their evaluations of foster care providers public. But government assessments from three states show that Mentor has had troubling deficiencies in selecting, training, and monitoring its foster parents and foster homes.

At least six healthy children have died in Mentor custody since 2005, including the grisly murder of a 2-year-old in Texas last year whose foster mother swung her body into the ground like an ax, and in nearly all these cases there have been allegations that negligence by Mentor contributed to the deaths. Other children have been sexually or physically abused, sometimes after clear warning signs.

Many former workers say they believe the pressure to squeeze profits out of foster care is part of the problem.

Mentor officials strongly disputed the idea that their company provides substandard care or that the drive for profits hurts children. Dwight Robson, Mentor's chief public strategy and marketing manager, said the company has done an excellent job of protecting and caring for "literally thousands of vulnerable children whose lives we enhanced." He pointed to Maryland, where, in their most recent evaluations, state regulators gave the company high marks.

Indeed, many, probably most, of the company’s foster parents offer stable and loving care. Moreover, a comprehensive view of Mentor is virtually impossible, because America's foster care system is fragmented, administered by states and counties that typically do not share information publicly — or even with each other — often citing child confidentiality.

Still, in many places where statistics were available, Mentor stumbles, a BuzzFeed News analysis shows.

In Texas, Mentor ranks dead last among large foster care providers, based on the number of severe violations found by state inspectors. Over the last two years, Mentor racked up more “high” deficiencies — the worst kind — per home than any other provider with at least 200 homes. Mentor’s rate was 170% above the overall rate among other large providers.

In an interview with BuzzFeed News, Mentor officials contended the high rate could be attributed to the fact that the company has been under greater scrutiny than other providers. So BuzzFeed News calculated the company’s rate of severe problems per inspection, rather than per home, which Mentor agreed was a fairer measure. But that analysis didn’t boost Mentor much at all — it ranked third worst among the 23 providers with at least 100 inspections.

Texas regulators have found more than 100 serious problems over the last two years in Mentor foster homes, including multiple instances of children being slapped, hit with belts, and struck. A baby suffered a broken clavicle after being left unattended on a bed. Another child was taken by his foster parents to an “adult novelty store.” Regulators also found that several children had “inappropriate” sexual contact with members of their foster families. Several others were placed in homes where children were allowed to hit or physically restrain each other.

Mentor also ranks poorly in Georgia, which grades child-placing agencies on a 100-point scale. Mentor has six branches in Georgia. Over the 10 most recent quarters, not one scored an average grade above the median.

In Massachusetts, according to confidential data a children’s rights group garnered in a lawsuit, the company was faulted for 16 cases of abuse and neglect in just one 12-month period between April 2011 and March 2012. That included one fatality in January 2012, the death of a 2-month-old baby, after which a special state investigation found that Mentor foster parents and social workers “were not trained” on safe sleeping practices in caring for infants.

The company said that its scores in Georgia have improved, attaining an average of A- for the most recent quarter. And Mentor’s problems in Massachusetts have been fixed, Robson said. Safety, he said, is “job one.”

He also said that the company performs much better than other foster care operations when it comes to keeping children in stable foster homes where they can thrive, rather than moving them from home to home.

But former Mentor caseworkers and law-enforcement officials said they believe the company sometimes fails children because it is focused on extracting a profit from them.

“You feel the pressure. You have to make those targets,” said a former worker whose name, due to a signed nondisclosure with Mentor, could not be used. “I went there because I care about services for kids. I eventually became a machine that cared about profits. I didn’t care about kids.”

Mentor’s profit margins vary state by state. In Ohio, according to a 2012 spreadsheet obtained by BuzzFeed News, its profit margin, as measured by the common Ebitda method, has been as high as 44%. In Alabama, the document indicates that the margin has hit 31%. That would mean that only 69 cents of every dollar that the state government paid to Mentor was spent on caring for the child and on overhead. Mentor’s overall profit margin, according to its financial disclosures, has been a little over 10%.

Robson denied that the company’s margins ever came close to 31%, let alone 44%, though he declined to say what its margins are, state by state.

Mentor’s foster care business works like this: It receives fees from state and local governments for its services, and it uses some of that money to recruit, screen, and train foster parents, and to pay those parents a daily rate for caring for the children. The money is also used for administrative overhead and to pay the salaries of social workers, therapists, and other staff. But the former workers say that in a bid to increase profits, the company sometimes cuts corners on expensive services that are supposed to ensure the children in its care are safe.

Mentor social workers, for example, may be forced to carry a higher caseload of children than is recommended, sources say. In one affidavit in a court case in Illinois, a Mentor caseworker said she had a caseload of children twice as high as the generally accepted practice.

“Here’s how you cut services: caseloads,” one former Mentor worker told BuzzFeed News. “In therapeutic foster care you are supposed to have 10 kids. So you may have 15 kids. You may have to hire people without licenses because you can get away with it.”

Company officials are quick to dispute any allegations that the quest for profit can cut into the care for children. “We don’t water down services to maintain profits,” insisted the executive chairman, Edward “Ned” Murphy, in an interview. “The idea that we can systematically dilute the quality of services just does not work. We would be out of business.”

In Texas, one of Mentor's most grisly failings prompted a local prosecutor to call for a federal investigation of the company.

In a one-story rented house in Rockdale, in the cattle country northeast of Austin, a 2-year-old girl, blonde and playful, was murdered by her foster mother, Sherill Small, on a hot evening last July.

Alexandria Hill had been taken from her young parents at the age of 1 by the state child welfare agency. The main reasons, Texas officials wrote at the time, were that her parents smoked marijuana around the child and her mother periodically suffered from grand mal seizures. That convinced the state caseworker she couldn’t care for Alexandria alone.

So the little girl ended up in Mentor’s custody. Texas paid Mentor just $39.52 per day for a child of Alexandria’s age, of which $22 went to the foster family. The company was having trouble finding foster parents.

In November 2013, the company placed Alexandria in her first foster home, where, according to confidential records obtained by BuzzFeed News, she appears to have suffered neglect. When that foster family brought the girl to a supervised visit with her birth parents, the parents were shocked to see that her hair was unwashed and uncombed. She was wearing pants stained with dried feces. Both of her legs were bruised.

Her young father complained to the state of Texas, threatening to call the police, and Texas state workers asked Mentor to place the girl in a different home. That’s when Mentor put her in the residence of 53-year-old Small.

Small spent her own childhood in foster care, and in 2012 she applied to Mentor to become a foster parent. Her maternal instincts were so questionable that even her own sisters were astonished when she was approved by Mentor. “She never even raised her own kids,” said Donna Winkler, one of Small’s sisters. “Her mother-in-law raised her kids, the young ones.”

Bill Torrey, the Milam County district attorney who would end up prosecuting Small for murder, said the company’s vetting process was shoddy. “They didn’t do their homework,” he said. “It was horseshit.”

One example of the gaping flaws in Mentor’s background research on Small: Amber Forester, Small’s daughter, said her mother and stepfather “will make great parents,” and that seemed to carry weight. Forester, after all, said she’d be spending time in the home once Small became a foster mother. But Mentor never requested a background check on Forester herself. If they’d asked for one, they would have learned that she had been convicted in 2002 of aggravated kidnapping and robbery after she and an accomplice kidnapped a pregnant convenience store clerk in 2000.

There were other issues. The Mentor “study” of the family shows that Mentor approved Small’s husband, Clemon, as a foster father even though he had been a longtime crack addict: “Mr. Small shared his past struggle with drug addiction, starting in 1980. He said his drug of choice was crack-cocaine.” He said he had last used the drug in 2000.

Mentor didn’t interview Small’s sisters, who said they would have warned the company.

Sherill Small.

Aram Roston / BuzzFeed News

Small was approved and began taking in foster children in September 2012, five in all. By December 2012, prosecutors later found, every one of them had been removed as “failed placements.” Small, according to an internal Mentor document obtained by BuzzFeed News, “reported feeling stressed out, and will express that she is unable to care for the children in the home.” The Mentor document also warns that personnel from the state’s Early Childhood Intervention (ECI) program “felt the children should not be in the home at that time.” It states, “ECI expressed concern about Mrs. Small being very frazzled and not certain what is going on with the children.”

Just a month after that report, in January 2012, little 14-month-old Alexandria Hill, fresh out of her first Mentor foster home, where she had been treated shabbily, was sent to live with the Smalls.

Torrey, the prosecutor, said he was astonished that Mentor would have placed Alexandria there. “How can you justify a report from your people that you apparently don’t read?” he asked. “It’s just a report? What, another piece of paper that goes in the file? No one looks at it? A sixth-grader would have known that you don’t put Alex Hill with these people, in light of Mentor’s own records!”

Mentor’s records, obtained as part of the murder case, indicate that Mentor officials claimed Alexandria was initially flourishing with the Smalls. In June officials wrote that Alexandria was “doing well” and that she is “healthy and playful. She enjoys playing with her toys. She loves to watch cartoons.”

Sherill Small’s sisters Diana Baines and Donna Winkler.

Aram Roston / BuzzFeed News

But Sherill Small’s sisters, Donna Winkler and Diana Baines, told BuzzFeed News the little girl was treated poorly. Winkler said Small “hated” the girl, while Baines said that when she visited the home, Small kept Alexandria in a barren room on the second floor where she was allowed to hold her teddy bear, and that was it. “She wasn’t hardly allowed to come outside her room at all,” Baines said.

Baines and Winkler said Mentor did conduct inspection visits, but that they were useless because the visits were always prearranged. Small tidied up the home in preparation, they said, and allowed Alexandria to watch TV so she’d be quiet while the Mentor worker was there. Meanwhile, there was another warning sign documented in Mentor’s own records: Alexandria was pulling at her hair so much she was going bald in spots.

On the afternoon of July 29, Baines visited Small’s home. She waved to little Alexandria, who was standing in a room called the “man cave” that had been formed from a renovated garage. Small told her Alexandria was on a time-out, being punished for waking up too early and taking food for herself. Winkler came by too, and heard the same story: The little girl was being punished.

It was later that day, in the evening, when Small and her husband called 911. When emergency workers arrived, the girl wasn’t breathing.

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