OSI Implicated in State Officials Corruption Case; CEO Defends

By Patrick Lunsford, CollectionIndustry.com

A report issued yesterday by the State Commission on Investigations (SCI) in New Jersey accuses state Treasury Department officials of accepting illegal gifts from one of their private outsourcing partners, collection agency OSI. The 41-page report was the result of an investigation launched early in 2005.

According to a SCI press release on the report yesterday, no fewer than 20 officials and employees of the divisions of Taxation and Revenue in the Treasury Department “accepted a wide and lavish array of meals, alcohol, outings and other largesse courtesy of the vendor.” OSI has been the private collection provider for the department since 1996 when it purchased Payco General American Credit Corp., the original contract holder.

In defending the allegations against his company, OSI CEO Kevin Keleghan issued a statement late yesterday. In the statement, Keleghan said that “the actions of only a few isolated individuals, some of whom are no longer employed by OSI, are the subject of the report.” Keleghan noted that OSI has fully cooperated with the investigators in the case and that when the company learned of the investigation 9 months ago, OSI launched its own internal inquiry on the matter which resulted in a redrafting of “employee policies to be even more explicit and further strengthen our conduct code.”

Keleghan also took issue with the wording used in both the report and the press release about the report. “The report, as issued, implies that these charges are ongoing practices- they are not. We are constantly monitoring to ensure that we are in full compliance with the law,” said Keleghan.

The report says that 20 state officials accepted around $65,000 in small gifts ? including meals, golf outings, cigars and gourmet chocolates ? over a period of 6 years. State investigators say that the case is still open and that none of the officials’ names have been released pending possible criminal charges.