A month after five state of New Mexico employees testified in federal court that they were instructed to falsify emergency food aid applications, another lawsuit filed in Las Cruces district court made strikingly similar allegations.

But instead of directing her allegations toward state government, Lorraine McCullough directed her allegations toward SL Start and Associates, a private, Washington state-based company that bills itself as a health provider for adults and children with developmental disabilities.

That’s because this company is contracted with the state Human Services Department to manage the federal Temporary Assistance for Needy Families Program (TANF). TANF is the program most commonly called welfare.

Locally, the program is called New Mexico Works.

For four years. McCullough worked as a program supervisor in Doña Ana County for SL Start and Embassy Management, a management services company. Both SL Start and Embassy Management are based in Spokane, Washington.

In her lawsuit, McCullough accuses five former managers with instructing her and other employees “to commit illegal and possibly fraudulent acts” in both the TANF and Supplemental Nutrition Assistance (SNAP) program, formerly known as food stamps.

New Mexico also contracted with SL Start to manage 1990s-era work requirements for the SNAP program that the state put on hold during the most recent recession. Gov. Susana Martinez’s administration reintroduced those SNAP work requirements in 2014, but a federal court has put the changes on hold until 2018.

Specifically, McCullough says her supervisors instructed her “to make misrepresentations of hours on activity time sheets and client work participation agreements, in addition to other documents.”

These documents are then turned over to the state Human Services Department.

SL Start and Associates and Embassy Management denied the allegations in court. The case is now before a federal judge in U.S. District Court.

‘Illegal and possibly fraudulent acts’

The point of falsifying the documents, McCullough’s lawsuit alleges, was “to provide inaccurate numbers so as to make it appear that federal participation numbers had been met.”

In this case, federal participation numbers refer to the work hours people must complete to receive monthly welfare checks.

Her allegations echo separate accusations of state-sanctioned fraud within the SNAP program that have rocked HSD since they first surfaced four months ago.

The separate SNAP allegations made by HSD employees during testimonies in federal court helped lead to a judge ordering the appointment of an independent special master. That special master will oversee and state department’s benefits processing and bring it into compliance with federal law.

Sovereign Hager, an attorney representing plaintiffs in the lawsuit where the SNAP allegations first surfaced, said the separate problems detailed in McCullough’s lawsuit concern her.

“Any allegation that people are falsifying documents in order to meet federal requirements is extremely troubling,” Hager said in an interview. “We hope that this will be investigated.”

After McCullough brought her concerns to her supervisors in the summer of 2014, her lawsuit says they instead put her on a performance improvement plan.

McCullough’s supervisors accused her of “unprofessional and demeaning communication with staff” and of “creating an environment” that makes her “seem unapproachable to her staff.” But McCullough’s lawsuit argues that the punishment was “unjustified.”

Instead, she claims it was retaliation for raising concerns over the administration of the New Mexico Works program.

McCullough’s lawsuit also claims that the supervisor who signed off on her performance improvement plan was one of those who instructed her to commit fraud.

Gunshots and death threats in the workplace

The lawsuit goes beyond the fraud allegations.

In June 2015, someone shot the security guard in McCullough’s workplace lobby.

“In the moments after the shooting, McCullough instructed her staff to lock themselves in the office with the lights off,” the lawsuit reads.

The “bloodied” security guard made his way to the men’s bathroom. McCullough tended the guard and “applied pressure to at least one” of his gunshots, according to the lawsuit, getting his blood on her clothes and skin.

After the event, McCullough says none of her supervisors approached her about counseling services in wake of the shooting.

Later that same month, one of her co-workers received a death threat from her ex-husband. McCullough reported this to her superiors.

McCullough’s supervisor responded by accusing McCullough of “inciting panic,” according to the lawsuit. Not long afterward, SL Start fired her.

McCullough is seeking damages in her lawsuit from SL Start and Embassy Management for retaliation, lost work and damaging her professional reputation. The lawsuit says McCullough has since found a new job and is currently employed.

Neither attorneys for McCullough or SL Start returned phone calls last week from NM Political Report seeking comment for this story. When reached by phone, one of the two attorneys representing McCullough said he was unauthorized to comment on the lawsuit.

McCullough herself also didn’t return a voicemail or inquiries sent to her via Facebook last week.

Similarly, a corporate representative for SL Start didn’t return a voicemail left last week, nor did two spokespeople at HSD.

Welfare reform in New Mexico

TANF famously overhauled the U.S. welfare system with the goal of reducing poor people’s dependence on government aid. In many cases, this included adding work requirements to benefits previously received as entitlements. The program was one of then-President Bill Clinton’s signature accomplishments during his two terms in the Oval Office.

Hillary Clinton, the First Lady at the time and current Democratic nominee for president, faces criticism from the left over the program and her role in promoting the overhaul.

In New Mexico, TANF gives cash benefits to roughly 35,000 poor people in the state, nearly three-quarters of them children, according to data from the Center on Law and Poverty.

Now in its 20th year of existence, people continue to debate whether the TANF has been effective in achieving its goals or instead is just another burden to poor people.

In New Mexico, the Center on Law and Poverty has concerns that “most people can’t comply with the requirements because they are administered in such a burdensome and unreasonable way,” according to Hager.

SL Start took over New Mexico’s management of TANF in 2011 as Martinez entered the governor’s office.

The Spokane, Washington state-based company has scored contracts with HSD worth more than $80 million during Martinez’s administration, according to the state’s online Sunshine Portal.

The latest contract for SL Start to administer New Mexico Works totals more than $52 million and lasts through June of next year.

Federal law exempts those who have experienced domestic abuse and those with disabilities from the work requirements. The company’s apparent failure to exempt work requirements from these who qualify for the exemptions concerns Hager.

“We see that people are routinely denied exemptions because SL Start does not screen them out,” she said.

SL Start also hasn’t always used taxpayer money efficiently.

Last year, HSD requested $1.75 million for a 12-week drug recovery program that SL Start ran for New Mexico Works. When analysts at the state Legislative Finance Committee found just 45 people went through the program in a 12-month period between 2014 and 2015—at $39,000 per person—they recommended against the state paying for it again.

SL Start also didn’t follow up on collecting information about whether people who made it through the program were still clean afterwards.

Needless to say, the $1.75 million to SL Start for the drug rehabilitation program was part of the big budget cuts during this year’s legislative session.

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