Saturday, March 18, 2000
Charges in OTR case in jeopardy
City's already missed deadline on misdemeanors
BY ROBERT ANGLEN
The Cincinnati Enquirer
Cincinnati's failure to finish a 1994 investigation in a more timely fashion might have jeopardized chances to file criminal charges against an Over-the-Rhine developer accused of misspending nearly $1 million in public money.
Hamilton County Prosecutor Mike Allen said Friday the time limit to file misdemeanor charges has expired and the clock on felony charges is rapidly ticking down.
“If there were misdemeanor violations, it's over,” he said. “This is a grave concern. ... Questions need to be answered about why it has taken so long for the report to get here.”
The report, by the Cincinnati Office of Municipal Investigations, alleges that Owning the Realty Executive Director Marvin Smith and another employee misspent and mismanaged $972,000 in federal grant money from 1991 to 1994.
Mr. Smith's lawyer Friday denied any wrongdoing by his client, saying the report relied on incomplete documents and was haphazardly done.
While Mr. Smith refused to address any of the allegations in the report, he acknowledged several Owning the Realty properties are being foreclosed for his failure to pay property taxes and that he once borrowed $70,000 from a group of nuns and never repaid it.
Although the city's investigation was started in October 1994, the 40-page report wasn't released until Thursday, after The Cincinnati Enquirer requested it under the Ohio Open Records Act.
City Manager John Shirey said he received the report only three weeks ago and was waiting until the county prose cutor had a chance to review it before making his own recommendations. Mr. Shirey could not say why it took more than five years to complete the report.
“I met with the city prosecutor today,” Mr. Allen said Friday. “They weren't aware of (the report) until a week ago.”
He said two assistant prosecutors will review investigator's findings this weekend and will recommend what charges — if any — should be filed next week. Mr. Allen said state and federal authorities might become involved.
But the statute of limitations on felonies expires six years after a crime is detected. Mr. Allen said that leaves his office with only a few months.
“I am going to ask the mayor and (council) to call a special session next week to talk about why we waited so long,” Councilman Charlie Winburn said. “We want Mr. Shirey to explain it. After six years, why are we down to a window of just a few months?”
Mr. Smith's lawyer, Ted Froncek, said the city has not given him a copy of the report. But he questioned the investigator's findings and said the city's handling of the situation was “outrageous.”
After waiting six years, he said, the city “rushed to judgment” with an incomplete report. He denied that Mr. Smith misspent federal grant money given to Owning the Realty for housing development.
Although investigators said the buildings slated for improvement with the $975,000 “remained essentially unimproved after all the funds had been disbursed,” Mr. Froncek said his client worked with city housing officials to change the scope of the project — and that was never taken into consideration.
Mr. Froncek also denied allegations in the report that his client spent federal money on his own business, manipulated the bid process and made duplicate billings for the same services.
He described Mr. Smith as a philanthropist who was so dedicated to the community that for years he wouldn't accept his $48,000-a-year salary as executive director because the organization couldn't afford it.
But officials with the Sisters of Charity at Mount St. Joseph said Mr. Smith owes them nearly $70,000 that he borrowed in the mid-1980s.
“He made some (minimal) payments, but he has not repaid the bulk of it,” said Mary Gilbert, communications director for the Catholic women's religious and charity group in Delhi Township. “He received two loans from us — the first for $20,000 and the second for $50,000 for rehabbing houses in the inner city.”
Ms. Gilbert could not say where the money had been spent, but added her group hopes to recoup the losses in court.
“The sad thing about all of this is that Owning the Realty was almost ready to refinance,” Mr. Froncek said Friday. “They were going to get a check when all this came out. What effect do you think all of this is going to have?”
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