Grim reality of billion dollar gov't program

The federal government's Job Corps has been around for 50 years. It supposedly provides training and education to disadvantaged teens and young adults.

But a CBS News investigation at a center in Texas raised questions as to whether some centers are really accomplishing their core mission: preparing young people for jobs, reports CBS News correspondent Anna Werner.

The $1.7 billion federal program funds 125 centers across the country, run mostly by private companies.

Hunter Donaghey, 19, enrolled at the North Texas Job Corps last year. With only an 8th grade education, he saw the program as his last chance.

"A new opportunity, doors opening up to me, a chance for me to actually get my education and become somebody and be proud of myself," Donaghey said.

But when he got to the center, Donaghey said there were constant fights. He said he was even attacked by another student.

"He put his hand around my neck and then it got to the point where I was startin' to go unconscious," he recalled.

But Donaghey's attacker was not expelled. Instead, he graduated from the program.

Mike Jamison, a former Chicago police sergeant who was chief of security at the center said he saw other unlawful activity.

"Marijuana, cocaine, heroin." he said.

A video obtained by CBS News appears to show a student cutting white powder on his desk in a classroom.

Jamison said instead of stopping the drugs and violence, he was pressured not to report it, despite a zero tolerance policy.

Sources told us expelling students can hurt a center's performance ranking.

"If a kid was caught with drugs in the dormitory, if the kid was caught on campus with drugs, what I saw was they did not want that to be reported," Jamison said.

And former career adviser Dean Tinnell said there was pressure to get students job placements -- whatever the method.

He said about 85 percent of the job placements were fake.

Managers set targets including a job placement goal of 75 percent or higher. And each month if that goal is achieved, bonuses as much as $1,150 would be paid.

But Tinnell said often, they couldn't do it. So they'd just fake the placements.

Essentially they could claim a student was hired by a company and no one would ever verify with that business.

"I mean, I feel like it wasn't right, but then what could you do when you have the upper management tellin' you to do it?" he asked. "'If not, we'll find somebody else who will.'"

Tinnell said he was fired for faking placements. Both he and Jamison, who was also fired, have since brought their allegations to the FBI.

CBS News heard similar allegations about violence and fraud from current and former employees who worked at fifteen other centers around the country over the past ten years.

Former Albuquerque center teacher Samantha Scott said some welding students that didn't show up for classes but still were certified to work in their trade.

"In theory, that student's gonna go out into the workforce supposedly being a skilled welder, and they have no idea what they're doing, they never even set foot in the shop" she said.

The National Job Corps Association, which represents the contractors running job corps centers, claimed any problems were isolated.

"You can have people saying things, that this program is subject to systemic cheating," board of directors member Congressman Earl Pomeroy said.

He also said Job Corps pays off for many who enroll; that 82 percent of those who graduate go on to jobs, further education, or to the military.

"The whole purpose of Job Corps is to take the young men and women coming in and give the kind of skills, training and support so they can get related employment, good jobs, hopeful futures coming out the other end," he explained. "We think these placement rates show that we're achieving that."

But three years ago, the Labor Department's inspector general found Job Corps "overstated 42 percent" of placements at five centers and some graduates wound up in fast food jobs, "that potentially could have been obtained without Job Corps training."

"I think their record is pretty clear; the program continues to be plagued by problems," Department of Labor deputy assistant secretary Mason Bishop said.

He oversaw job training programs, including Job Corps, for six years.

"If there is fraud in the reporting of the numbers, then that framework puts the whole program into question, that's a very serious problem," Bishop said.

As to Hunter Donaghey, he's no longer at the North Texas Job Corps center.

"I'm nowhere," he said. "I still don't have an education. All I own is a suitcase, and that's about all I've got."

When CBS News requested comment from Career Opportunities Inc., the contractor that ran the North Texas Job Corps, and from DEL-JEN, which runs the Albuquerque center, they referred us to the Department of Labor.

During the course of our investigation, the Department of Labor announced it would not renew career Opportunities Inc.'s contract due to "concerns about student discipline."

The agency says it is also doing a review of safety at the centers, as well as audit and oversight practices.

Read the full Job Corps statement

Read a statement from Shriver Job Corps Center