Cincinnati city solicitors are considering civil action against a West End group that used a taxpayer-funded program for building low-income housing to hire family members, write checks to board members and repair relatives' homes.

        But members of Genesis Redevelopment Inc. say that doesn't matter since federal, state and local investigators have cleared them of criminal wrongdoing.

        “It doesn't mean anything,” said Genesis board member Jackie Shropshire. “They couldn't prove anything because we didn't do anything.”

        Although Cincinnati police fraud investigators say there is no evidence of criminal wrongdoing by Genesis, they say the group mismanaged $50,000, ignored city recommendations, violated conflict-of-interest rules and used 5 percent of the housing money it received to pay family members.
       

Practices under review

        That is what city officials are now reviewing for possible civil litigation. City Manager John Shirey confirmed Tuesday that he has asked for a review by city lawyers because of possible contract violations.

        The Hamilton County prosecutor has also advised city solicitors to investigate the case as a civil matter.

        All of this was revealed Tuesday, a day after the public safety director issued a half-page report citing program mismanagement by Genesis rather than criminal action. The additional report was released after a council member and the Enquirer requested it under the Ohio Open Records Act.

        Councilman Phil Heimlich said the city's inability to file criminal charges might have been hindered by the city's failure to properly monitor contracts. Specifically, the approval of vouchers by the Department of Neighborhood Services for payments to Genesis board members.
       

"Conflicts of interest'

        “We're talking about conflicts of interest. We're talking about civil fraud. We're talking about violations of city regulations,” he said.

        Mr. Shirey described Tuesday's report as a rehash of what has been known for months, saying the only new issue is whether Genesis did anything criminal.

        “That question has been answered,” he said. “It is far beyond me to challenge the FBI, the police department, the Hamilton County prosecutor and the U.S. Attorney's office.”

        In a letter to Mr. Shirey, Hamilton County Prosecutor Mike Allen said Tuesday that the reports on Genesis do not establish criminal culpability but do “raise several troubling issues” about the city's inability to monitor funds.

        “A continued lack of accurate record keeping by publicly funded organizations will only create additional accountability problems in the future,” he said.

        Mr. Allen also said a second investigation of the West End Community Council — involving some members of Genesis — has been completed by the fraud squad. But Mr. Shirey said that is untrue, that an initial report was done by the city's internal auditor and fraud investigators have not started that investigation.

        He agreed the city's contract process needs an overhaul and said steps are already being taken to ensure that “things like Genesis don't happen in the future.” Those include a review of contracts, a new director of Neighborhood Services, and the hiring of an outside firm to analyze the contract process.

        City officials in February asked for an investigation of Genesis, the development arm of the West End Community Council, a day after the Enquirer reported on questionable practices. The city also froze Genesis funding for its failure to provide financial information required to get federal housing money that is distributed through the city.

        They say those funds will remain frozen at least until the outcome of the city solicitor review. Some council members, including longtime Genesis supporter Minette Cooper, said Tuesday it would likely never be funded again.

        “How can we?” she said. “How can we pay people for not performing?”

        Although Genesis was approved for $800,000 in federal grants since 1991, fraud investigators say it was given $708,300 and spent $565,000.

        In that time Genesis has remodeled its office, made minor repairs to 11 homes and built one other.

        Investigators found:

        • $29,084.58 was paid to relatives of Genesis board members — mostly sons and daughters — for work on projects since 1990. “The contracts that generated these payments did contain conflict-of-interest clauses.”

        • “The board did not have the ability, knowledge or expertise” to do the work. And that Genesis mismanaged $50,000 ""due to projects started and not completed, poor workmanship done on projects and hiring inexperienced workers to do the work.”

        • Two relatives of Genesis board members were sold homes by Genesis. But the Department of Housing and Urban Development — which gave the homes to Genesis — says anyone could buy them.

        Now Genesis board members say they want their funding restored.

        “It feels good to be vindicated,” Genesis President George Beatty said on Tuesday. “Usually when a person is accused of something and then found not guilty, one of the canons of law is that you restore that person.”

        He acknowledged shoddy bookkeeping, saying a “learning curve” was to be expected and that board members would be willing to take a class to ensure proper methods are used in the future.

        Mr. Beatty called the investigation into Genesis a calculated attempt by some officials to keep the community from participating in development of the West End.

        “We were in the way of the big dollars,” he said of Genesis. “What happened is the organization had several successes that we weren't supposed to have. We were designed to fail.”

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