A nationally renowned drug rehab program in Texas and Louisiana has sent patients struggling with addiction to work for free for some of the biggest companies in America, likely in violation of federal labor law.
The Cenikor Foundation has dispatched tens of thousands of patients to work without pay at more than 300 for-profit companies over the years. In the name of rehabilitation, patients have moved boxes in a sweltering warehouse for Walmart, built an oil platform for Shell and worked at an Exxon refinery along the Mississippi River.
“It’s like the closest thing to slavery,” said Logan Tullier, a former Cenikor participant who worked 10 hours per day at oil refineries, laying steel rebar in 115-degree heat. “We were making them all the money.”
Cenikor’s success is built on a simple idea: that work helps people recover from addiction. All participants have to do is surrender their pay to cover the costs of the two-year program.
But the constant work leaves little time for counseling or treatment, transforming the rehab into little more than a cheap and expendable labor pool for private companies, an investigation by Reveal from The Center for Investigative Reporting has found. The not-for-profit group operates a 56-bed rehabilitation facility at 3015 Herring Ave., in Waco, but Cenikor officials did not respond to written and verbal questions this week from the Tribune-Herald about local conditions.
At some job sites, the investigation found, participants lacked proper supervision, safety equipment and training, leading to routine injuries. Over the last decade, nearly two dozen Cenikor workers have been seriously injured or maimed on the job, according to hundreds of pages of lawsuits, workers’ compensation records and interviews with former staff. One worker died from his on-the-job injuries in 1995.
Labor experts say Cenikor’s entire business model might be illegal under federal labor law. The Fair Labor Standards Act requires all employees to be paid minimum wage and overtime.
“They have to look at a different way to run their business operation other than merely absconding with the workers’ wages,” Michael Hancock, a former Department of Labor official, said when presented with Reveal’s findings. “They’re being preyed upon.”
An ongoing Reveal investigation has exposed how many drug rehabs across America have become little more than lucrative work camps for private industry. Patients have slaughtered chickens on speeding assembly lines in Oklahoma and cared for residents at assisted living facilities in North Carolina.
Among these programs, Cenikor stands out. It has a long history of accolades from sitting lawmakers and judges and even former President Ronald Reagan. Last year, the Texas-based nonprofit earned more than $7 million from work contracts alone, making it one of the largest and most lucrative work-based rehabs in the country.
Bill Bailey, who as Cenikor’s chief executive officer earned more than $400,000 in 2017, repeatedly declined requests for comment. But in a statement, Cenikor officials said the work provides “a career path for clients to be hired by companies who traditionally do not hire those with felony convictions, allowing them to return to a life of being a responsible, contributing member of society.” They said they follow all state and federal laws.
Many Cenikor participants work for a network of subcontractors that then dispatch them to the major companies.
Walmart said it found Cenikor’s labor arrangement troubling and pledged to investigate.
“Our expectations are that all of our vendors follow both the applicable laws and regulations as well as our standards for suppliers,” Walmart said in a statement.
Exxon declined to answer specific questions, but in a statement said the company “contractually requires all of our suppliers to comply with all applicable environmental, health, safety and labor laws for themselves and their subcontractors.”
Shell did not respond to requests for comment.
Many participants said Cenikor saved their lives and equipped them for success. After 18 months in the program, participants can become eligible to receive wages and graduate with jobs, a car and the tools to build a promising life. But fewer than 8 percent of people who enter Cenikor make it to graduation, according to the program’s own numbers, and therefore never receive a paying job.
“It was just a money racket,” said former Cenikor patient Alester Williams, who checked himself in to Cenikor for help quitting alcohol and cocaine. “That place was all about manipulation and greed.”
Cenikor patients and staff said work came before everything else. Staff routinely canceled doctors’ and legal appointments in favor of sending patients to work, records show . Working up to 80 hours per week left little time for counseling, therapy or sleep.
Like many participants, Ethan Ewers was ordered to complete Cenikor by a Texas judge after failing a drug test while on probation. Once he arrived, he said he worked 43 days straight in a sweltering warehouse unloading cargo containers for Walmart. One day in 2016, when he was bone tired and on the brink of relapsing, he finally snapped.
“I said, ‘You need to give me a day off because I can’t do this anymore,’ “ Ewers told Cenikor brass. “It was absolutely ridiculous.”
Multiple former staff members told Reveal that counselors routinely falsified counseling records to make it appear as though patients received more counseling than they did. During busy work seasons, some received no counseling at all.
Peggy Billeaudeau, who was the clinical director at Cenikor’s Baton Rouge facility from 2015 to 2016, said she got so fed up with the excessive work that she and her staff launched their own investigation. They pored over patient timesheets and painstakingly entered the hours into a spreadsheet. Billeaudeau discovered that many Cenikor patients were working 80-hour weeks and rarely received counseling.
She presented the evidence to top Cenikor officials at a staff meeting. “It was kind of like, ‘Peggy, don’t touch that with a 10-foot pole,’ “ she recalled. “It was about the money. Get the money.”
Some rehab staff have a financial incentive to work participants harder and longer, according to interviews. Former vocational services managers, who secured outside job contracts, said the more money they brought in, the larger their bonuses.
Cenikor managers had a compelling sales pitch. They promised companies cheap workers who were drug tested and always on time. Cenikor would pay for transportation and cover the costs of insurance.
“We tended to charge less than the temp agencies because of the demographics,” said Stephanie Collins, a former vocational services manager. “We were competitive.”
Patients, meanwhile, make nothing. They are told that their paychecks will be used to offset the cost of the program. Federal labor law allows Cenikor to deduct the costs of food, lodging and certain other expenses. But according to interviews and records obtained by Reveal, Cenikor typically brings in far more money from work contracts than it spends on patients.
Food stamps cover meal costs for all Cenikor participants, and in Louisiana, many are signed up for Medicaid to pay for counseling and medical care. Internal financial ledgers from the program’s Baton Rouge facility show that in 2016 and 2017, Cenikor’s job contracts regularly delivered more than twice as much money as its daily operating expenses.
At minimum, labor experts say this means Cenikor patients should see at least some of the pay from their work.
“I can’t fathom this being legitimate,” said John Meek, a former Department of Labor wage and hour investigator. “That math is just against it.”
Despite its reliance on work, Cenikor frequently has skimped on providing safety training or giving participants basic protective gear, such as steel-toed boots and harnesses.
In 2016, David Dupuis and other Cenikor participants went to work for a company cleaning up flooded homes filled with black mold and raw sewage. While regular employees got protective equipment such as masks and boots, Dupuis said Cenikor workers got nothing.
“They didn’t give us any protective equipment at all,” he recalled, adding that workers frequently caught staph infections. “It was extremely hazardous.”
In 2018, Cenikor sent Matthew Oates to a private residence in Baton Rouge to trim trees without a safety harness, helmet or rope. As he teetered on a ladder 20 feet in the air, Oates lost his balance and tumbled from the tree. The fall broke his back.
“You’re wondering if you’re going to be crippled, you know, you’re going to be in pain for the rest of your life,” Oates said. “You know, what’s going to happen to me? Am I going to be able to work again?”
Oates said his back still causes him severe pain and he regularly sees a chiropractor.
Cenikor has been warned repeatedly to make sure participants are safe on the job. After a Cenikor worker plummeted from an unstable platform and died in an office supply warehouse in 1995, federal labor officials told Cenikor that ensuring patient safety was paramount.
“Cenikor officials should take more of (an) active role in providing quality training” and “recognize hazards associated with the job,” officials with the Occupational Safety and Health Administration wrote. But injuries have continued to rack up.
In Texas, Cenikor is not required to report on-the-job injuries to rehab regulators. But when officials with the Texas Health and Human Services Commission learned about the injuries from Reveal, a spokeswoman said the agency was “concerned about any injuries sustained to clients” and planned to investigate further.
In Louisiana, state law requires Cenikor to report injuries, but Cenikor has not submitted a single injury report to the Louisiana Department of Health in the last three years, even though Reveal uncovered numerous injuries during that time. Licensing officials said they would investigate the injuries if a patient complained about them.
The federal Department of Labor had the opportunity to crack down on Cenikor’s labor abuses more than 20 years ago. In 1994, Cenikor participant Loren Simonis graduated from the program and immediately filed a complaint with the wage and hour office, alleging violations of the Fair Labor Standards Act.
Under federal law, workers are entitled to minimum wage and overtime for their work. The Supreme Court ruled in 1985 that working for free in a nonprofit — even one with a rehabilitative purpose — was a violation of federal labor law. Cenikor can deduct the cost of room and board, but it cannot keep all of participants’ wages, former labor officials told Reveal.
But the Department of Labor declined to investigate Simonis’ complaint, according to records obtained by Reveal. Simonis got tired of waiting and filed a lawsuit against Cenikor, claiming unpaid wages. He eventually settled for an undisclosed sum.
Labor officials declined to comment on the department’s 1994 decision and refused to answer questions about whether investigators would look into Cenikor for wage violations. A department spokesman said the agency “takes all complaints of worker safety and health hazards and violations seriously.”
Today, Simonis lives in Oregon with his wife and kids and runs his own screen-printing shop.
“I’ve turned my life around,” he said. “I don’t think Cenikor had anything to do with it.”
There have been times when Lucy Faulkner considered ignoring the reminders to pick up the insulin prescription she needs to manage her Type 2 diabetes because she simply could not afford it.
There have been times when the 53-year-old Waco resident skipped a dose or rationed her insulin to make her prescription last just a little longer, and there have been times when she has fretted until she was in tears over the exorbitant cost of a medication she must take to survive.
Faulkner certainly is not alone in her struggles. More than 30 million Americans have diabetes, and about 7.5 million of them rely on insulin to survive, according to the American Diabetes Association. The paralyzing price of insulin has been the topic of national conversations and the subject of a congressional hearing earlier this month in which lawmakers sought answers for the high cost of a hormone that was discovered almost a century ago.
No alternative medication to insulin exists to treat diabetes, Type 1 or 2, and the cost nearly tripled between 2002 and 2013, according to the American Diabetes Association. Diabetes cost Americans more than $327 billion in 2017, including $15 billion for insulin, making it the most expensive chronic illness in the U.S.
U.S. Sens. Chuck Grassley, R-Iowa, and Ron Wyden, D-Oregon, sent letters to the three top pharmacy benefit managers this month, as part of a bipartisan investigation into insulin prices. The senators are working on a bill to address rising drug prices, The Hill reported.
In the meantime, patients are left waiting for a resolution.
Without federal assistance, Lisa Bridges knows she would not be alive. There is no way the 56-year-old Waco resident could afford the insulin and other supplies necessary to treat her Type 2 diabetes.
“If I didn’t have help, I’d be dead,” Bridges said. “There’s no doubt in my mind.”
Diagnosed with diabetes in 1987, Bridges managed to control the disease with her diet for a while before taking oral medication, but she did not check her blood glucose levels like she should have because she was in denial about her condition for years.
“I’m paying the price,” she said.
In 2016, 11.6 percent of Waco adults reported having diabetes, according to the City Health Dashboard website. That compares to 11.2 percent of Texans and 9.4 percent of Americans who reported having the disease.
Some pockets of Waco have greater rates of diabetes. For instance, between 18 and 20 percent of residents in the 76704 and 76705 ZIP codes reported having diabetes.
Two years ago, Bridges got an insulin pump, a device that provides a continuous supply of insulin directly through her skin. She also got a continuous glucose monitor that reads her blood glucose level and sends an alert to her phone if her glucose is too high or too low.
If Bridges did not have federal disability benefits, she would have to pay about $2,000 a month for the insulin and other supplies she needs to check her blood glucose levels. That does not include costs for other medications she uses to treat the effects of diabetes, such as supplements or a cream to relieve neuropathy.
“Without insurance, it’s not affordable at all,” she said.
There is some help for patients without insurance. The Family Health Center offers affordable insulin to patients without health insurance, and Walmart sells human insulin, a less refined form of insulin introduced in the ‘80s, for $25.
While a healthy diet, exercise and weight loss can help people with Type 2 diabetes, those with Type 1 diabetes must have insulin to survive because their bodies do not produce the hormone, said Ben Wilson, a doctor at the Family Health Center.
Generally, doctors attempt to treat Type 2 diabetes with other medications or lifestyle changes before prescribing insulin to patients, Wilson said. Metformin is a common anti-diabetic medication prescribed to patients.
Faulkner used Metformin for years before her doctor switched her to insulin. She remembers paying $5 to $10 a month for Metformin and how shocking it was to change to insulin, which can cost her $300 to $700 a month.
“I told my husband, ‘That’s our house payment,’” she said. “You have to live. So, do I make my house payment, or do I get my insulin?”
She and her husband pay for health insurance through his job at Domtar Personal Care. But the plant is closing, so Faulkner’s husband will lose his job and insurance at the end of August. That means the Faulkners will have a new deductible to meet and have to pay full price for insulin and other medications until it is met.
Still, Faulkner said her husband makes too much money for them to qualify for help to pay for her prescriptions. She wishes there were help for average people like her.
“The other day, I was sitting there in tears because I was at the point where I was just going to say, ‘Forget it. If diabetes kills me, it kills me.’ because I couldn’t afford the $4,400 at the time,” Faulkner said.
The three major pharmacy benefit managers in the U.S. are Express Scripts, CVS Health Corp. and Optum.
Family Health Center Director of Pharmacy Services Judd Ramsey believes those three companies play a significant role in the soaring prices of insulin.
“Drug manufacturers typically get most of the blame when it comes to high drug prices,” Ramsey said. “However, they definitely are not the only ones to blame. PBMs are in a position to leverage their size to lower drug prices, or at least that’s what we were told when they were created. That has not been the case.”
Ramsey said prescription drugs were more affordable before the introduction of prescription insurance companies and pharmacy benefit managers. Now, drug manufacturers lobby to get their products on pharmacy benefit managers’ preferred drug lists, creating a complex pricing mechanism, he said.
“PBMs likely are using their size to leverage against both drug manufacturers, pharmacy wholesalers and pharmacies to gain profit, not help their patients,” Ramsey said.
When Faulkner’s diabetic cousin died, his family gave Faulkner what was left of his insulin supply. A friend also gave her some insulin when her doctor changed her prescription. Faulkner said these gifts saved her money because she did not have to refill her insulin prescription as often. Her pharmacist also provided her with a prescription drug coupon that reduced the cost of her insulin for months.
Faulkner wishes the medication were more affordable. She does not want it for free, but she believes people like her, “in the middle,” should be able to afford it.
“This is a life-and-death medication,” she said. “If I don’t take it, my sugar could go up real high, and I could go into a coma. Lord knows what the outcome of that would be.”
The Midway Independent School District Board of Trustees election has one contested race for the Place 6 seat between incumbent Ivan A. Green, a certified public accountant, and Andrew B. Popejoy, an emergency room physician.
No one filed to run against incumbents Pam Watts, Place 5, or Rick Tullis, Place 7. All seats are elected at-large and serve three-year terms.
Green, vice chairman and chief administrative officer for Extraco Banks, has served on the Midway school board for 17 years. He said his tenure on the board and expertise in finance make him the best candidate, especially when the district is considering building new schools.
A Midway graduate, Popejoy wants to give back to the school system he credits with much of his success. He and his wife, Vicki, also have four children who attend Midway schools in grades one through eight. He said he wanted to get involved in the community to see how he could “keep Midway great.”
Both candidates said the most important issue facing the Midway school board is the overcrowding of several schools. While Green believes his background in finance will help with the issuance of any bonds to build new schools, Popejoy thinks the school board needs the input of future generations to make decisions that will impact them.
“When people plan for the future, we talk a lot about buildings and growth,” Popejoy said. “The future isn’t just about buildings. It’s also about people. Our board is very experienced, but at the same time, we need to plan to let the next generation in and have a succession plan in place for the board.”
Green said his experience on the school board has given him essential knowledge of how the school system works.
“We’re going to have to make a decision to address this overcrowding, and it’s going to have to be by issuing some bonds,” he said. “That’s an area I’m familiar with.”
Popejoy, an emergency room physician at Premier ER, said having children in school keeps him informed of the day-to-day happenings in Midway and allows him to interact with other parents. He also sees plenty of parents and students at Premier ER who feel comfortable talking to him about concerns they may not want to discuss at a board meeting.
Even though his children no longer attend Midway schools, Green’s grandchildren do, which gives him a “vested interest” in the school district, he said.
“If I didn’t think I was providing value to the district, I wouldn’t run for the school board,” he said.
Both candidates praised the teachers and staff in the school district who make sure the students are on track to graduate. Green said the school board always needs to examine compensation because teachers are the “lifelines” of the district. He also said the district needs to help students who struggled on state standardized exams.
Popejoy serves on the board of directors for Incommons Bank, the Premier ER Medical Advisory Committee and the Cameron Park Zoological and Botanical Society board. Green is past-President of the United Way of McLennan County, as well as secretary and treasurer for the boards of Extraco Corp. and Extraco Banks.
After a contentious year surrounding the Hewitt City Council, voters on May 4 will pick three council members from a crowded slate of candidates, including two former city officials who were in the eye of the political storm last year.
Three of the seven Hewitt City Council seats are contested in the election: Ward 1, Ward 3, and the at-large seat, which has drawn five hopefuls.
Also on the ballot is the Ward 2 seat, for which Matthew Mevis, a city of Waco environmental analyst, is unopposed. James Vidrine announced earlier this year that he will not seek re-election to the seat.
Beginning last May, the council experienced months of public turmoil among the council and city employees, including City Manager Adam Miles. The unrest led Councilman Kurt Krakowian to resign last summer and led Miles to accept a separation agreement from the city. The two, who have been in open conflict with each other, are among the five at-large candidates.
Several candidates this week talked to the Tribune-Herald about the election, which has the potential to reshape the direction of the second-largest city in McLennan County, with a population of more than 14,400.
Incumbent Travis Bailey, a retired McLennan County constable, will be seeking a fourth term against Charles D. “Charlie” Turner. Turner, a former council member who served 22 years on the council, including time as mayor. Both men have faced off before, leading both men to voice their areas of expertise in community service and moving the city forward.
“I just feel like I can help the city. I’ve worked real hard for three terms to try to get it stabilized and get it working good,” Bailey said. “I’m just hoping all this stuff that we’ve had gets all cleared up. It’s been a very distracting year. I just want to do one more term and get everything finished up and straightened out, because this is something we don’t need to go through again.”
Bailey said he has enjoyed working with the city and hosting events for the community, like the Really Big Fishing Event for Very Special People, a free event he founded to benefit intellectually and developmentally disabled people with outdoor activities.
In keeping with public service, his opponent, Charles D. “Charlie” Turner said if elected, he intends to rely on his service experience that he had in serving on past city councils. Bailey defeated Turner in 2013, but said his motivation in running is simply to serve his city again.
“I am not a politician. Politicians do everything for reelection, but I am a statesman. I care more about my city and my citizens than I do about being reelected,” Turner said. “I think with my past experience, because the first time I was elected was in 1981, I think you can go back and see that I’ve walked the walk, not just talked the talk.”
Political newcomer Matthew Mevis, an environmental analyst for the city of Waco Water Quality Laboratory, is the only person who filed for the position. He will be unopposed and will likely take the spot of Vidrine.
“The biggest thing we’ve been dealing with is citizen frustration over the fact that the council this past year has been very meticulous about doing things the way they want to do them, but no explain why they make the decisions they’ve been making,” he said. “The citizens are really wanting transparency out of the next council and people who are willing to see all the cards, face up, so I plan to bring that.”
In Ward 3, Erica Bruce, a toxicologist and Baylor University medical researcher and current at-large council seat, decided to run for the Ward 3 position. She ran for the at-large seat in a November special election along with six other candidates, leading Bruce winning the most votes in the eight-way race after a December runoff with challenger Betty Orton.
“I’m running because I believe that my skills, knowledge, and experience can promote competent critical thinking, logical problem solving, and connected leadership that is built on a foundation of integrity and transparency,” Bruce said. “These skills are what I believe is needed for the council to become effective at doing its job again and to regain the trust of our citizens and city staff.”
Bruce will face off with A.C. “Tony” Martinez, who also ran against her in the at-large race in November. Martinez, who owns Alameda Holsters, did not return calls from the Tribune-Herald for this story.
Five candidates have filed to run for the at-large seat, opening the possibility of a runoff if no candidate wins a majority.
Michael S. Bancale, 56, was the first candidate to run for the at-large seat, currently held by Erica Bruce. Other candidates are retired city secretary Betty Orton, Miles, Krakowian, and retired attorney Mike Field.
“I believe we have a current council that has lost the trust of its residents and the employees, so I feel we need to correct that and focus on our future,” Bancale said. “I am a trained problem-solver and I have been working in the computer programming field to solve problems and I feel like I have the problem-solving skills necessary to look at situations, budgets, expenses and find better ways to manage out money, help the taxpayer and our residents and bring people together.”
Also running is former council member Krakowian, who was appointed by other council members to fill a vacant seat then resigned it in July, three months into his term. He later tried to withdraw this resignation. Krakowian said he looks forward to getting back into the council to correct issues, including city finances, personnel morale and making sure pay raises are granted equitably.
“I am running as a very conservative and watch out for the tax dollars for the citizen of Hewitt,” he said. “We are $65 million in debt for a small little community that has the second biggest debt in McLennan County, so we need to get that under control.”
Orton, a retired city secretary, said she is no stranger to city council meetings, and she has lived in Hewitt for more than 40 years. She said she became concerned with the issues the city council has encountered and believes serving as an elected official will help bridge the gaps between council members and the public.
“I am wanting to have the council to connect with each other since there has been such a division with the council this last year,” Orton said. “I am hoping we can work together and not be on one side or the other, because we can all have our ideas, but still be respectful of everyone, including the residents.”
Miles, who was city manager for 10 years, said he decided to run for public office not only to see the city grow, but to ensure the next 10 years will keep positive momentum moving forward.
“Obviously there are a lot of issues that have been brought up and some of them have been handled and some of them have not been dealt with, so there is clearly room for moving forward and putting stuff behind us,” he said. “My time with Hewitt has been spent looking toward the future and planning for the future and it is important to me to see some of these projects through and planning to build the strong community that we have.”
Miles said he fully supports City Manager Bo Thomas, who left the city manager role in Bellmead to replace Miles this year, but he does have concerns with the current city council.
Miles argued that Mayor Ed Passalugo, who is not seeking re-election, violated the Texas Open Meetings law while in office, and that is part of the complaint filed against Passalugo by Miles’ girlfriend Belinda Kay “Katie” Allgood, the city’s managing director of administration. Texas Rangers investigated the claim that Passalugo engaged in a “walking quorum” by polling council members outside of official sessions, but prosecutors this month declined charges due to a recent Texas Court of Criminal Appeals case that undercut the grounds for the complaint.
Rounding out the at-large candidates is retired attorney Field, who was the last candidate to file for the seat. A Hewitt resident since 1992, he said his three decades of working in the public sector and his work experience has given him the maturity of judgment necessary to decision-making skills to the council.
“I got tired of reading about us in the Tribune and there was a lot of things that went on, and I believe a good many of them could have been avoided,” Field said. “In addition to being an attorney, I understand open meeting law and I was also a manager for nearly all of my career, so I understand, I think, how to treat people and how to hold them accountable. I believe we’ve had a council that has lost the trust of its residents and its employees so I feel we need to correct that and focus on our future.”
About 6,000 runners are taking off on 5-kilometer, 13.1-mile or 26.2-mile treks on Waco streets, starting and finishing downtown.
Participants in Magnolia’s second Silo District Marathon events Sunday morning come to Waco from all 50 states and five other countries, organizers announced Friday. About 400 volunteers, 200 first responders, several city and county staffers and a private traffic-control company are providing support to manage the crowds and carry out the street closures needed for the races.
Residents hoping to catch the action can head to one of the featured viewing areas, which include Indian Spring Park on Lake Brazos at University Parks Drive; Cultivate 7twelve and The Warehouse, both on Austin Avenue; the corner of Third Street and Austin Avenue; and Brotherwell Brewing at 400 E. Bridge St. in East Waco.
Residents hoping to avoid the commotion can rest assured all streets are scheduled to return to normal traffic at 1 p.m.
This year’s marathon course follows the same basic route as last year’s.
It starts near Fifth Street and Webster Avenue, then heads across Interstate 35 through Baylor University, north on Martin Luther King Jr. Boulevard, up Taylor Street and back on Elm Avenue for more on MLK to Lake Shore Drive, east on Lake Shore to Airport Boulevard toward Waco Regional Airport, then back to Lake Shore along the Lake Waco Dam Trail, Hillcrest Drive to 31st Street, south on 31st Street, then Colcord Avenue to University Parks Drive, two more crossings over the Brazos River, a trip along Austin Avenue to 17th Street, then back on Webster Avenue to the finish line near the starting point.