By William Gjebre and Dan Christensen, BrowardBulldog.org 

Broward’s Inspector General has found that Hallandale Beach officials “grossly mismanaged” millions of dollars in public funds “entrusted to the care of its Community Redevelopment Agency,” according to a report obtained by BrowardBulldog.org.

“The OIG (Office of Inspector General) investigation substantiated the allegations and uncovered numerous deficiencies in the city’s administration of the CRA,” says the 50-page preliminary report that has not been released publicly.

Investigators said they found at least $2.2 million in questionable CRA expenditures between 2007 and 2012, including inappropriate loans to local businesses and grants to local nonprofits – as well as the improper use of bond proceeds.

The city improperly spent $416,000 of CRA money for parks outside the CRA boundaries, says Tuesday’s report.

The spending, which was not always documented, was often done at what amounted to the whim of former city managers Mike Good and Mark Antonio, the report says.

Former Commissioner Keith London told investigators that his colleagues “looked at the CRA fund as one big pile of money and they didn’t care how or where the money went,” the report says.

Mayor Joy Cooper, however, offered a different take. “She was not concerned with the CRA administration’s lack of (expenditure) verification because the CRA Board members observed the work of the nonprofits when they went out in the community,” the report says.

Cooper and the rest of the city commission also sit as the CRA’s board of directors.

“This report vindicates everything I have stated for the last six years,” London said Tuesday night.

Cooper could not be reached for comment.

Former commissioner Keith London

The probe began 14 months ago following a string of stories in BrowardBulldog.org about questionable city loans to local businesses and land purchase through the CRA. It surfaced publicly last April when county agents sought a multitude of records at City Hall.

In some cases, the report says, the CRA awarded funds despite a 2010 Florida Attorney General opinion that CRA expenditures must be connected to “brick and mortar” capital improvements – not, for example, to promote economic development or promote socially beneficial programs by nonprofits.

In one case, the line of what’s legal was apparently crossed and a crime may have been committed, the report says.

The Inspector General’s findings about Hallandale Beach are the latest to cite serious mismanagement of CRA funds. A year ago, for example, the Inspector General slammed Lauderdale Lakes for misspending $2.5 million in CRA funds. More recently, the Florida Auditor General identified misspending by Hollywood’s CRA.

“It is becoming increasingly apparent that the gross mismanagement of CRA funds by a Broward County municipality is not a unique occurrence,” the report says.

The CRA was established in 1996 under a state law that allows it to collect tax revenue to be used to rid slum and blight conditions. It receives 95 percent of the taxes collected on the appreciated value of properties within its boundaries. The county has provided Hallandale’s CRA with approximately $35 million since it began.

Inspector General John Scott’s report includes what amounts to a warning to other Broward cities that his office will be eyeballing their CRA’s to see how they spend their property tax dollars.

“The OIG will continue to examine the expenditure of CRA funds by municipalities,” says the report.

The final report will recommend to the county that it look over its legal options “to prevent the ongoing abuse of the CRA process and recover those funds that may have been misspent,” the preliminary report says.

In Hallandale, there was an apparent lack of regular monitoring by the CRA of who got its funds and how that money was spent.

In one case, the report says, a nonprofit grant recipient spent nearly $5,000 in funds to make a payment on her time-share at the Westgate Resort in Orlando, make payroll payments to herself and her brother and on other things.

Dr. Deborah R. Brown with former Congressman Kendrick Meek

“We found probable cause to believe that Dr. Deborah Brown, the founder and director of the Palms Center for the Arts (PCA), engaged in criminal misconduct in the handling of a $5,000 award the PCA received from the CRA,” the report says.

Brown could not be reached for comment Tuesday night.

The matter has been referred to the sheriff’s office and the Broward State Attorney for prosecution.

The Inspector General’s report also clears Commissioner Anthony Sanders of allegations that the CRA showed favoritism toward him by substantially overpaying his nonprofit, Higher Vision Ministries, for property it purchased in 2009 at 501 NW First Ave.

“The investigation did not substantiate the allegations, although we found that the CRA fomented an appearance of favoritism by failing to consider the purchase of the property in a fully transparent manner,” the report says.

The report also cites “institutional deficiencies in the establishment, organization and function of the CRA” that it says contributed to numerous instances of gross mismanagement. They include:

•  Failure for nearly 16 years to establish a CRA trust fund, as required by law, which led to the commingling of CRA funds with city funds in the city’s bank account. A trust finally was set up last May.

•  Failure to operate the CRA independently from the city. Former CRA executive director Alvin Jackson told investigators the CRA “was treated like any other city department and that the city had ‘free rein to tap into CRA funds.

•  Failure to timely generate detailed CRA plans and adhere to them, as well as a lack of a “stable and empowered CRA staff to ensure compliance” with the law.

“We also identified multiple instances where city officials ignored warnings from CRA staff of various deficiencies in the management of the CRA,” the report says.

The report notes that before Jackson there were several CRA managers under City Manager Good’s heavy managerial thumb. “More troubling is evidence that Mr. Good and other senior officials lacked understanding of” state statutes governing the CRA “and did not require compliance.”

The report notes that in 2011, after news reports about CRA problems in BrowardBulldog.org and elsewhere, it undertook “remedial steps” to improve its management and effectiveness.

But the Inspector General indicated those steps, including the establishment of the trust fund, are not enough.

The report includes a half-dozen recommendations intended to “ensure the independence of the CRAs,” including building a stable and knowledgeable staff with the authority to ensure compliance with the law, and diligent future monitoring of expenditures.

By William Gjebre, BrowardBulldog.org 

Hallandale Beach paid $235,000 to buy this property in 2009 from a nonprofit whose officers included Vice Mayor Anthony Sanders and his wife Photo: William Gjebre

A former Hallandale Beach commissioner said he voluntarily met with Broward Inspector General investigators Monday who questioned him about the city’s embattled Community Redevelopment Agency, its purchase of property once owned by a group headed by Vice Mayor Anthony Sanders and a city loan to a local newspaper.

The former commissioner, William “Bill” Julian, is currently running for city commission. He declined to discuss details of his four-hour interview with three investigators because “they asked me not to talk about anything.”

For more than a year, however, Broward Bulldog has reported about questionable city loans to local businesses and land purchases through the CRA – whose board of directors are also the city’s commissioners.

The IG’s office investigates suspected misconduct that includes fraud, corruption and mismanagement. IG investigators appear to have begun focusing on Hallandale Beach and its CRA this spring with a trip to City Hall in April. In response to their requests, the city recently turned over thousands of pages of records.

Records indicate that investigators are examining the CRA and a city grant program that funneled hundreds of thousands of dollars in grants and donations to eight local non-profits, including several linked to Vice Mayor Sanders or his wife, Jessica.

In 2009, after Sanders’ appointment to the commission the year before, the city spent $235,000 in CRA tax dollars to purchase a building and land at 501 NW First Avenue owned by Higher Vision Ministries, a not for profit corporation whose officers included Sanders and his wife.

Sanders, who did not vote on the city’s purchase, was a director of Higher Vision Ministries when it bought the property in 2001 for $45,000. The nonprofit received a $46,000 property improvement loan from the city not long after the purchase.

The terms of the loan immediately forgave $7,500 in principal. An error by the city at the time the property was sold in 2009 doubled that forgiveness to $15,000 – meaning Higher Vision Ministries only had to pay back $31,000.

LOCAL NEWSPAPER DEAL

Julian, who served as a commissioner and vice mayor from 2001 to 2010 when he was defeated for reelection, said the investigators also asked about a CRA loan to the for-profit South Florida Sun Times.

The weekly newspaper, which regularly features a column by Mayor Joy Cooper, received a $50,000 CRA business loan under favorable terms in 2009.

Half of the loan — $25,000 – was forgiven even though for two years prior to the loan the newspaper’s two top executives each reported incomes averaging more than $200,000.

Julian told Broward Bulldog there has been turmoil at the CRA, with several directors being removed in past years. He added that CRA funds were used for a variety of charitable contributions to community groups.

“I didn’t question use of CRA funds for charitable contributions,” Julian said of his time on the city commission. Commissioners, he added, wanted to “take a load off the general fund…I don’t know if that was legal. That will have to come to light.”

“I don’t know of wrongdoings by commissioners or myself,” Julian said. “I don’t know if I did something wrong.” Julian added that if something was done incorrectly “let’s fix it.”

VOLUNTEERED TO TALK

Julian said he contacted the IG office Friday and volunteered to be interviewed because “there’s a cloud of suspicion over me.”

He said he was compelled to come forward because of public comments on recent stories about the IG investigation and what his involvement might have been while in office.

“I want to be as open as possible,” Julian said. “I have never been accused of anything in my life.”

Inspector General John Scott did not respond to a request for comment.

Julian is one of six candidates vying for two at large commission seats up for grabs on November 6. The other candidates are Vice Mayor Sanders, Gerald Dean, Ann Pearl Henigson, Csaba G. Kulin and Michele Lazarow.

Dorothy Ross, a commission member for 17 years, is not seeking reelection.

CITY BALKS AT COOPERATION

County investigators have asked to speak with each of the commission’s current members.  The City Manager’s Office has informed them that it won’t schedule any interviews until the IG’s office informs the city about its intentions.

In addition, CRA attorney Steven Zelkowitz recently told the IG’s office by letter that the CRA is “a separate legal entity” and not subject to the authority of the IG under county and state laws.

Historically, however, the city administration and commissioners have treated the CRA as a part of the city government.

*The CRA has been operating since 1996, but it wasn’t until March that its board of directors – the city commissioners – voted to establish it as a separate “agency” reporting directly to the board in accordance with state law. Until then, the CRA functioned mostly as a subdivision of the city’s Department of Development Services.

* All 59 properties purchased with CRA funds are in the name of the City of Hallandale Beach – not the CRA. The CRA is now seeking to re-title 43 properties to itself, but 16 will remain in the name of the city.

*Hundreds of thousands of dollars in past city grants and charitable contributions to local non-profit community groups did not clearly spell out how much CRA money was used in those taxpayer-provided gifts.

*CRA business loan policies changed frequently under former city managers, allowing for some loans to exceed established limits, some funds to be distributed without repayment agreements, and questionable forgiveness arrangements.

A critical study of city and CRA record keeping this year by an outside auditing firm recommended that a financial manager be hired. The recommendation was also in agency bylaws adopted by city commissioners sitting as the CRA’s board of directors. In June, however, those same board members voted down a CRA staff request to hire a financial manager.

That study was ordered after it had become clear that management problems existed. The commission, however, authorized a limited review rather than a more intensive financial audit. Aside from poor record keeping the recent report by the auditing firm said some $20 million in vendor contracts were never reviewed because city staff failed to provide them.

William Gjebre can be reached at wgjebre@browardbulldog.org

By William Gjebre, BrowardBulldog.org 

Broward Inspector General John Scott Photo: CBS4 Miami

A Hallandale Beach program that funneled hundreds of thousands of dollar in grants and contributions to community groups is a key focus of the Broward Inspector General’s widespread investigation of city management practices.

Documents obtained by Broward Bulldog show the Inspector General obtained city files on eight community-based organizations, several linked to City Commissioner Anthony Sanders or his wife, Jessica. The documents include information about city payments to Jessica Sanders and others associated with the groups.

Those disclosures, and others about the probe, are contained in a 15-page letter sent to Inspector General John Scott on April 23 from City Manager Mark Antonio.  The letter was the city’s formal response to Scott’s request two weeks earlier for dozens of city records.

Among the records turned over to county investigators are thousands of pages of city memos, reports, minutes, email, budgets, policies, programs, audits, grant reviews and program files. The records sought are for the fiscal years 2010-2012. Antonio also referred investigators to additional public documents on the city’s website.

Some requested information was not supplied. For example, investigators asked for all city records that would show attendance by nonprofit grant recipients at quarterly workshops, as required by grant agreements. Antonio said, however, that there were no sign-in sheets to verify attendance

Antonio, who retires next week, said, “The city has diligently fulfilled the request for records to the best of our ability.’

Scott does not comment on pending investigations.

Antonio’s letter says investigators also sought information about the leasing and rental of city property to local groups; plans and loan programs operated by the city’s Community Redevelopment Agency; and expenditure reports involving the CRA, the city’s general fund and the Law Enforcement Trust fund.

County investigators are also reviewing whether non-profit groups receiving city funds followed procedures, assessments, and commitments.

Broward Bulldog reported last week that the City Manager’s Office has not been fully cooperative with investigators by declining to set up interviews between city commissioners and county investigators who want to speak with them. Those commissioners also sit at the CRA’s board of directors.

The refusal was cited in a June 13 letter from the City Attorney’s Office, which also sought the identities of commissioners who might be targets.

INVESTIGATORS VISIT CITY HALL

The Inspector General’s office began its probe on April 10 with a visit to city hall where investigators met city with Antonio and CRA Executive Director Alvin Jackson. Jackson started in January 2011.

Investigators revisited City Hall in recent weeks, meeting with Jackson for several hours. Documents state that IG special agent William Cates and senior auditor Susan Friend also met with other city officials, including Jennifer Frastai, an administrator in the City Manager’s Office, and Marian McCann-Colliee, the city’s Human Resources Director.

The probe appears to be limited to the past three years, but some requests for records have resulted in the city providing documents going back to 2000.

In March, an outside audit was critical of city management and the tracking of CRA loans and property acquisitions. Broward Bulldog also reported then that the audit, which raised questions about the city’s loan practices, did not review more than $20 million in contracts with city vendors because the city failed to provide the information and limitations on the scope of the audit.

In several of the loan deals involving taxpayer property tax dollars, recipients did not have to pay back the amount as much as half of the value of the loan.

COUNTY FOCUSING ON GIVEAWAYS

While records indicate that the Inspector General’s probe is multi-faceted, investigators appear to be strongly focused on city grants and charitable contributions made through its Community Partnership Grants program.

City records show that such giveaways increased 60 percent in the past three years – from $400,000 in fiscal year 2009-2010 to $647,000 this year.

“As economic times worsened the city saw a greater need for services in the community which directly corresponded with the increase in the amount of requests to the city,” Antonio said in his letter. He added that for 2012 “two teams of professional who were non-city employees” reviewed 29 applications.

Available city documents show that in 2010 and 2011, city grants and donations did not specify where the money came from: the general fund, CRA or the Law Enforcement Trust fund. But this year, after a CRA management makeover, they were shown as follows: general fund, $256,130; CRA, $274,600; and Law Enforcement Trust Fund, $116,654.

The Inspector General asked for the files on these program recipients:

• Eagles Wings Development Center Inc., job training and social services program, $50,000 in the past two years.
• Greater Mt. Everett Resources and Learning Center, a work force training program for construction trades, $61,000 this year.
• Lampkin’s Creative Arts for All LLC, including Dizzy Fingers School of Excellence, Inc., training youth in how to advance in the arts, $50,000 this year.
• Palms Center for the Arts, Inc., a youth arts and job preparation program, $107,000 past three years.
• Palm Community Action Coalition, community based program assistance, $26,000 over two years.
• Palms of Hallandale Beach Weed and Seed, a crime prevention and community development program associated with the Department of Justice, $143,000 past three years.
• Phileo Outreach Ministries Inc., a program for rehabilitation of youth, $45,000 past two years.
• Zamar School of Performing Arts, Inc., $25,000 two years ago.

COMMISSIONER SANDERS AND WIFE

State corporate records for Eagles Wing listed Hallandale Beach Commissioner Anthony Sanders as president and his wife, Jessica, director, in 2009. In 2010 and 2011, Jessica was listed as director, but Anthony Sanders was not listed. He was appointed to the city commission on Sept. 8, 2008 to fill a vacancy.

Commissioner Anthony Sanders

Jessica Sanders also has ties to two other non-profits on the Inspector General’s list, according to public records.

She is a contact for the Palms Community Action Coalition, which until April 2011 was known as the Palms Community Development Corporation. Jessica Sanders, as “interim site coordinator” for Palms of Hallandale Beach Weed and Seed, appeared at a July 14, 2011 Hallandale Beach commission meeting before a vote to award a $45,000 grant to her group.  “Vice Mayor Sanders excused himself from the dais during the presentation and recused himself from voting,” city minutes say.

In an interview this week, Commissioner Sanders indicated that he is perplexed about the county’s inquiry.

“I can’t answer why they are asking for the records,” he said. “They are looking at nonprofits. I don’t mind that they are looking at Eagles Wings. It is a service to the community and always has been…food programs, job training and other services.”

Sanders indicated he may meet with IG investigators soon.

Jessica Sanders said, “I’m not concerned about the probe.” She said there has been no wrongdoing and noted that she has provided some records to IG investigators. She said that she and her husband “stayed here to make a difference. We do good work.”

Her income from the Weed and Seed program was not from city funds, she said, but came from the Department of Justice, which backed the program. She said that on several occasions she was asked by the Weed and Seed governing board to operate the program when the group’s administrators failed to perform.

OTHERS SCRUTINIZED

The county investigators also sought information payments made by the city to Nellie Bacon, Clara Brown, Deborah Brown, Selinda Washington-Jackson and Jacquelyn Rosenau.

According to state corporation records Rosenau is director at Eagles Wing. Clara Brown is corporate secretary for Palms Community Action Coalition. Deborah Brown was president of Palm Center for the Arts in 2011, and a principal and director of Zamar School in 2011. Washington-Jackson works for Weed and Seed. Rosenau used to work for the agency.

The city supplied copies of its lease and rental agreements with non-profits to investigators.

Those agreements are with: Hallandale Beach Area Chamber of Commerce, Zamar School of Performing Arts, and the Palm Center for the Arts.

The chamber, which received $25,000 from the city in 2010, has an office in City Hall, next to the commission chambers. The rental fee for approximately 400 square feet of space is $1 a month.

The Palm Center for the Arts, 501 NW 1^st Ave., sits on land the city purchased with CRA funds in 2009 from Anthony Sanders’ nonprofit Higher Vision Ministries; a commissioner at the time, Sanders did not vote on the sale.

Sanders bought the property in 2001 for $45,000 and sold it to the city for $235,000 after receiving a $46,000 property improvement loan. The city initially agreed to forgive $7,500 of the loan. When the city bought Sanders’ property, however, it forgave an additional $7,500 when at the time the sale was finalized. City officials have said it was an error by the city.

In August 2009, the city leased Sanders’ former property to the Palm Center for the Arts for a one- time fee of $10, on the condition it provide community art and music training programs. While the lease states the center is not allowed to sublet or rent the facility, the city modified the agreement to permit the Zamar School for Performing Arts to operate a summer camp at the center in the summer in 2009.

A provision in the Palm Center lease allowed for a summer camp music program. The city helped Zamar with $25,000 to operate the camp.

The IG’s office has also requested information about additional money given to various groups that was more than initially authorized.

William Gjebre can be reached at wgjebre@browardbulldog.org