Strickland voices regret on fund used to outsource appliance rebate calls

COLUMBUS - Gov. Ted Strickland says he's disappointed that federal stimulus money went to a company that outsourced work to an overseas call center, and he pledged better supervision of future contracts.

A Texas company hired to administer Ohio's appliance rebate program used hundreds of workers in El Salvador to process applications and to answer customers' calls.

State officials learned of the arrangement on the day the stimulus program began in March, after a customer asked a call-center employee where he was located and then complained to the state.

"We were horrified," said Lisa Patt-McDaniel, director of the Ohio Department of Development.

Parago Inc., based in Lewisville, Texas, never told state officials that it would handle rebates from an offshore call center, she said. But state officials didn't ask.

Upon learning of the El Salvador call center, Ohio officials immediately contacted Parago and asked the company to process the Ohio calls within the United States, Patt-McDaniel said. But Parago has no domestic call centers.

Several Republican congressmen from Ohio, including House Minority Leader John Boehner and U.S. Rep. Steven LaTourette, said the stimulus-funded work should not have ended up in Central America.

Mr. Strickland, a Democrat, said late last week the state will do a better job of vetting companies that get stimulus contracts.

Parago scored highest among nine companies that bid on the contract, and its $171,300 proposal was the second-lowest, Ms. Patt-McDaniel said.

Two Ohio companies, Twenty First Century Communications and Focus on Ohio's Future, were the most expensive, at $467,238 and $493,763, respectively.

Parago has issued about 52,000 rebate checks as the program winds down. The rebates range from $100 to $250 depending on the appliance.