Saturday, July 01, 2000
Audit: West End board misused $80,000
Project money went to members
By Robert Anglen
The Cincinnati Enquirer
Records show that more than $80,000 slated for community projects has gone instead to West End Community Council board members, their relatives and organizations they control.
A city audit obtained Friday by The Cincinnati Enquirer shows board members since 1992 have made questionable purchases, hired family members and claimed thousands in unidentified expenses.
Several people identified in the audit are being investigated by federal, county and city law enforcement agencies on suspicion of misspending taxpayer money through another West End organization, Genesis Redevelopment Inc.
The city audit looked at the spending of $255,000 from a pool of money paid to the city by a West End business that in 1981 agreed to pay for neighborhood programs and services rather than pay property taxes.
But the city's internal auditor found that the West End Community Council never requested funds for approved projects such as a youth reading program and the landscaping of Laurel Homes housing project.
“Instead, claims for reimbursement were made for administrative expenses and questionable items,” the report says.
City Manager John Shirey said Friday in a cover letter to the report that it has been turned over to the Hamilton County prosecutor to determine what action can be taken.
That isn't good enough for some City Council members, who want to know why this wasn't caught sooner and call it evidence that the administration has failed “once more” to properly monitor taxpayer money.
They are also questioning the timing of the report's release, which came Friday afternoon, two days after the council began a five-week recess.
“At the very least, the city should be considering legal action against the West End Community Council and its officers,” said Councilman Phil Heimlich. “We need to recover any money clearly shown to be unlawfully spent.”
The city's probe was sparked in February, after an Enquirer investigation of Genesis Redevelopment Inc., the nonprofit development arm of the West End Community Council.
The newspaper found Genesis board members and the director paid themselves and their relatives more than $12,000, hired family members as contractors and repaired relatives' homes. Genesis was also given two homes by the U.S. Department of Housing and Urban Development that were sold to board members' relatives.
The city awarded Genesis $800,000 in federal grants since 1991 for housing development in the West End. The organization has remodeled its own office, made minor repairs to 11 homes and built one other home. The city has since frozen funds earmarked for Genesis, pending the outcome of investigations.
The auditor's report shows that several Genesis board members are some of the same people who got money out of the $255,000 fund to benefit the West End as part of the city's tax agreement with Automatic Data Processing.
“There is no record that these less-than-arm's-length transactions were disclosed or justified to the city,” the auditor's report said.
Among West End Community Council board members named by the auditor:
• Henderson Kirkland, a Genesis board member, along with five of his relatives, received $22,884 from the ADP fund.
Through Genesis, Mr. Kirkland's son, Mark, was paid $5,500 for landscaping and painting on neighborhood projects. Mr. Kirkland's ex-wife was sold one of the HUD Houses in 1996.
• Gloria Hemmingway, who along with two of her relatives, received a total of $7,287 from the ADP fund.
As Genesis vice president, Ms. Hemmingway's residence in 1995 was repaired under a Genesis program. She was also paid $405 for “reimbursed expenses” and “real estate options” from Genesis accounts. Ms. Hemmingway's son, Art, was paid $303 for unstated repairs to the other HUD house, which Genesis sold him in 1997.
• Sydney Cooper, Genesis' treasurer, received $1,100 from the ADP fund.
None of those mentioned could be reached Friday for comment.
The auditor's report shows $45,775 of the ADP funds was paid directly “to or for the benefit of” Genesis. Funds also went to: community council members Ray Jackson, $270, and Betty Warren, $4,601; and the West End Athletic Association, $749.
The report also notes that one-third of the ADP funds — $76,800 — went for office supplies, utilities, administrative costs and building maintenance for the community council.
Councilman Charlie Winburn says that is another example of the administration's failure to safeguard city programs.
“This is another fiasco,” he said. “Mr. Shirey needs to be held accountable.”
Mr. Winburn also called the timing of the report “cowardly,” saying the city manager — who is now out of town — gave the council no chance to ask questions.
The report was distributed to council members after the Enquirer repeatedly demanded it under the state's Open Records Act. Although requests were submitted several weeks ago, Mr. Shirey maintained he didn't have it. Mr. Heimlich and Mr. Winburn, however, said Mr. Shirey discussed the report's findings with them privately within the past two weeks.
Mr. Heimlich confirmed meeting with the manager and raising several concerns the report doesn't address. Chief among these is the scope of the audit, which covers only about $255,000 in ADP funds given to the community council since 1992.
“By my calculation, there's $524,000 unaccounted for,” he said, noting that the funds were established in 1981 and more than $700,000 has been paid to the community council since then.
Mr. Heimlich said the lack of oversight by city officials underscores the need to shift city functions to private developers.
“This is clear and convincing evidence we need a citywide development commission that will put money to work for our neighborhoods instead of into somebody's pocket,” he said.
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