Wednesday, February 16, 2000
City defends support for development group
BY ROBERT ANGLEN
The Cincinnati Enquirer
Cincinnati officials Tuesday defended their oversight of a West End development group that used a taxpayer-funded program to write checks to its board members, hire relatives and repair family members' homes.
Genesis Redevelopment Inc. is under investigation by the FBI and is being reviewed by the Hamilton County prosecutor and Cincinnati police.
But city officials contend they carefully monitored the group's expenditure of public funds all along.
In a four-hour hearing, Department of Neighborhood Services staff told City Council why they recommended approval of more than $800,000 in federal grants to Genesis since 1991 — after the group failed to deliver on promises year after year.
“To insinuate we turn our head and don't do oversight is inaccurate,” said Gerard Hyland, neighborhood services community supervisor.
This all came in response to an investigation by The Cincinnati Enquirer, which last week revealed Genesis board members and their families received more than $12,000 in 1998 from Genesis accounts and other benefits without the knowledge of federal or city officials.
Neighborhood Services Director Cheryl Meadows acknowledged there was no system in place to track checks or determine whether public money was used to repair board member's homes.
But in a six-page memo, she said her department followed procedures dictating that Genesis be paid only after work was completed.
Problems within Genesis had caused the city to suspend its funding this month: the nonprofit group's failure to provide an annual audit to the city and its unwillingness to release financial documents requested by the newspaper.
“Currently, the 1999 contract is suspended and the year 2000 operating support contract cannot be executed until (Genesis) has met its au dit report requirements,” Ms. Meadows said. “This would have happened because of the city's monitoring process whether or not the Enquirer had written the article.”
Genesis contends it can't complete an audit because the former director “ran off with the records” and gave them to the Enquirer.
“Recently it has come to our attention that the records are at The Enquirer newspaper,” Genesis Executive Director Dale Mallory said in a statement on behalf of board mem bers. He told council the board prohibited him from answering any questions.
In an interview last week, he said the records were in the possession of Board Treasurer Sidney Cooper, who has refused to be interviewed.
Former Executive Director Ty Shabazz referred questions to his attorney Tuesday, who said his client is not in possession of the records. In earlier interviews, Mr. Shabazz said Genesis' financial records were on computer files at Genesis.
The Enquirer reviewed copies of 1998 general ledgers, which show checks were written to eight current board members and their relatives.
Although Genesis has been recommended for $800,000 in federal grants to develop housing, Ms. Meadows said they have spent only $533,000. She said the majority of that money has gone to pay for Genesis operating expenses and the rest for construction.
She said Genesis also received money from private sources — such as banks — which the city doesn't monitor. Internal Revenue Service records show from 1992-97, less than 1 percent of the group's revenue came from private sources.
Some council members referred to this as a shell game and pointed to promises made by Genesis in operating contracts and construction contracts to develop dozens of housing units.
The group has remodeled its office, done minor repairs to 11 homes and built one other.
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