Ex-Iowa official still owes big restitution bill

DES MOINES, Iowa (AP) - The former director of a government-funded job training agency who misspent millions of dollars has paid only $1,100 in restitution despite receiving more than $153,000 from her Iowa public pension while sitting in prison.

The Des Moines Register reported the figures after a hearing Tuesday on the U.S. government's effort to seize Ramona Cunningham's pension check of $2,700 from the Iowa Public Employees' Retirement System.

Assistant U.S. Attorney Maureen McGuire said in court Tuesday that Cunningham owes $1.6 million restitution because of actions during her time leading the Central Iowa Employment and Training Consortium.

She said the government is entitled to take Cunningham's monthly pension under a federal law that provides broad powers in pursuit of debts tied to a criminal conviction.

McGuire noted Cunningham, before taxes, had received $153,387 from IPERS while paying less than 1 percent of that to replace the misspent tax money.

"She's paid a total of $1,100 to her restitution," McGuire said. "That's, frankly, a problem."

"Where have you been?" U.S. District Judge Robert Pratt responded in court.

McGuire answered that federal authorities "were told that the state was going after her IPERS. . Turns out, they weren't doing it."

She later said the government retains the power to seize that money to enforce the restitution order. But first they have to find out where the money is located.

Cunningham's attorney, Chip Lowe, contends the restitution law is unconstitutional because it strips away protections that would be available to Cunningham if she owed a different kind of federal debt.

Gregg Schochenmaier, head lawyer for the state's pension system, testified Tuesday that Cunningham, now 57, received her first check from IPERS in March 2009. She was allowed to start receiving pension payments early, Schochenmaier said, because of a federal finding that Cunningham was eligible for mental health-related Social Security disability payments. Paper checks apparently have been sent each month to a relative of Cunningham's in Des Moines.

The IPERS checks included a large back payment, according to Schochenmaier. That's because the U.S. Social Security Administration ruled that Cunningham had been mentally disabled since April 23, 2006, roughly two weeks after she was fired from CIETC amid a public scandal over her $368,236 annual pay.

Cunningham, who pleaded guilty to fraud, obstruction and conspiracy charges in July 2008, was then deemed by authorities to be the ringleader of an alleged three-year conspiracy to misuse as much as $2.5 million in public money intended for the job training programs at the employment and training consortium.

Testimony during a 2008 trial showed that federal and Polk County money provided for job training instead was used to boost administrative salaries, pay people who didn't work on those particular programs, and reward CIETC employees while they did yard work or made trips to gamble in casinos around the state.

Cunningham, former executive director of the regional agency, was sentenced to seven years in federal prison in 2008. She's scheduled for release in January 2015.