Monday, September 04, 2006

Mayor Mallory Halts Another Investigation

Let us look at the anatomy of a defunct investigation:

On June 28th, City Council members Birding and Bortz called for an audit of the Cincinnati Empowerment Corporation.

June 28th: From the Enquirer

"There have been enough allegations now of mismanagement of funds, from a number of different sources, to suggest that a more complete review is required or responsible," said Councilman Chris Bortz, a Charterite who chairs the Economic Development Committee.

Bortz, joined by Democrat Jeff Berding, has proposed that the city freeze funding to the Empowerment Corp. until the audit is completed.


June 28th: From the Business Courier

The city of Cincinnati's director of community development and planning wants to hire an outside auditor to examine the finances of the Cincinnati Empowerment Corp.

This, after two recent controversies over potential conflicts of interest among the agency's board members, employees and consultants.

"I see a lot of smoke and I want to make sure how much fire there is," said Michael Cervay, who advocated the hiring of an independent auditor during a June 28 meeting with city finance and legal officials.

The meeting was held in response to a June 7 memo by city council members Chris Bortz and Jeff Berding. They asked interim City Manager Dave Rager to freeze "all reimbursements and administrative drawdowns" to the federally funded agency until the city can conduct a "full audit" of "potentially inappropriate expenditures."

Cervay said a decision will be made by the end of this week on whether to conduct an audit and whether to freeze the agency's funding. He would like to take proposals from accounting firms that can review the agency's spending in detail.

"Enough questions have been asked that I have not been able to answer that I feel I need the information in order to be assured that no irregularities exist," Cervay said.

June 29th: Greg Korte reported that the CEC’s funds had indeed been frozen.

Part of that article is of interest:

The vice chairman of the Empowerment Corp. board, Robert O'Neal, told City Council on Wednesday that the city's action was premature.

"I'm saying there are people here to answer any questions. Do not take what's being reported in the paper. We've had three financial audits," he said. "We're willing to work for the community and do the work we are supposed to do."

Afterward, O'Neal declined to answer questions from The Enquirer. "I only talk about what the board tells me to talk about," he said.

While at City Hall, Empowerment Corp. officials hand-delivered two audits - for years 2003 and 2004 - that were one and two years late. The 2005 audit is due Friday.


Note that the routine annual audit of the CEC was due the very next day. Auditors take months to do their work. The work on this audit had obviously been completed months earlier.

I put the original quotes up here in context with links so that you can read them and check out the original source documents. Now that is done, let’s talk about what happened.

Reset

Let’s go back to the beginning of the City’s investigation into the Cincinnati Empowerment Zone. At the end of June, Council Members and the City Administration were calling for a freezing of funds pending a “more complete review”. Members of City Council called on interim City Manager Dave Rager to conduct a “full audit of potentially inappropriate expenditures”

Michael Cervay talked about seeing smoke and finding the fire. "Enough questions have been asked that I have not been able to answer that I feel I need the information in order to be assured that no irregularities exist," Cervay said. From his words, Michael Cervay was going to get to the bottom of the investigation, and the city was going to hire an independent auditor to look into the allegations. He was even going to solicit bids from auditors to help investigate.

That was the original goal, but that wasn’t what happened. Something happened along the way that was of major consequence…

August 14th: Milton Dohoney Jr was sworn into office as the new City Manager. He was hand picked by Mayor Mark Mallory without any input from council in the selection process.

August 23rd: Barely a week after taking the job, the City of Cincinnati resumed payments to the Cincinnati Empowerment Corporation.

On August 23rd, the resumption of funding happened “quietly”.

“The city of Cincinnati will resume payments to its inner-city development agency following a two-month freeze to look into allegations of conflicts of interest.

The action came quietly Aug. 23; one week after the Cincinnati Empowerment Corp. delivered its 2005 audit to the city. The audit, routine for all federally funded programs, was conducted by Clark Schaefer, Hackett & Co.”


In an article a day later Korte ">writes:

"The city of Cincinnati freed up federal funds to the agency last week after the Empowerment Corp. submitted three overdue audit reports.”


What does that mean?

I will tell you what it doesn’t mean. It doesn’t mean that the City investigated the Cincinnati Empowerment Zone for conflicts of interest, self dealing, or fraud. If the CEC was audited under the auspices of City Hall administration for fraud the auditors would have made a finding one way or the other. That finding would have been noted in the article. This was a routine audit for year ending 2005.

What just happened?

The Cincinnati Empowerment Corporation had their funding frozen by the City of Cincinnati pending an investigation into allegations of fraud & conflict of interest in June. That investigation never happened.

The Cincinnati Empowerment Corporation gets audited every year. As Korte stated, such audits are routine for all federally funded programs. This appears to be a routine audit, which is much different than an investigative audit concerning fraud or looking into allegations of conflicts of interests.

As in the Nixon administration, some past versions of the truth are “no longer operative” statements. The current version comes from a technical interpretation of the law. The Cincinnati Empowerment Corporation had not delivered its yearly audit for the year ending 2005 to the City, and the City suspended funding for non compliance. The CEC then delivered the audit, and the City Administration resumed funding because they are now in compliance. “In Compliance” only means that they delivered a routine audit, which they have every year.

Did the city pay an independent auditor to conduct a more complete review?

No. The audit that was presented to the city was done months before City Council or Michael Cervay even raised questions. It is a routine audit. The auditors were chosen by the Cincinnati Empowerment Corporation. Remember when I warned you to look closely at the auditor selection process? In the end it turns out that the auditor was both selected and paid for by the Cincinnati Empowerment Corporation.

Did Michael Cervay get to the bottom of this?

No evidence suggests that Michael Cervay conducted any investigation. What he did do was accept a routine audit from people that were selected and paid for by the CEC. In his defense, sources at City Hall tell me that he had no choice in the matter. His orders came from above. The new City Manager, appointed solely by Mayor Mallory made that call. Chris Bortz was one of the council members initially calling for the investigation. A quote from him tells the tale:

Councilman Chris Bortz, a Charterite who is chairman of the Economic Development Committee, had suggested the funding freeze with Democrat Jeff Berding. He said Thursday that releasing the money was "entirely within the purview" of City Manager Milton Dohoney Jr. and his community development director, Michael Cervay.


The City Administration changed the scope of the investigation, and councilman Bortz is powerless to do anything about it.

Bortz called for an investigation and a complete audit, and he wasn’t alone. But shutting down that investigation and releasing the funds to the CEC is “within the purview” of City Manager Milton Dohoney, and he alone.

Mayor Mallory Halts Another Investigation

Mayor Mallory is making a habit of stopping investigations that might be sensitive to the Mallory clan. You can read about his interference in a police investigation here, and view his brother Dale’s investigation timeline here.

An eerie similarity to both situations exists. Dale Mallory closed down the WECC bank account months after being impeached and removed from office. The police were even given copies of the checks. Both his impeachment and his crime were covered extensively in the press. Likewise, the facts of the CEC were covered in the press. Both cases had public outcry. Both cases got citywide attention. And both cases were stopped before anyone ever began an investigation. The CEC is back to full funding of your tax dollars and nobody can do anything about it.

What does it matter?

Let me try to impress upon you the gravity of the situation.

The Cincinnati Empowerment Corporation has been funded tens of millions of dollars. That money has been controlled by a cabal of interconnected predators. Much of this info has just recently come to light. They loan money to insiders and friends and those people never pay it back. 84% of their loans are “non performing”, which in English means that people aren’t paying them and they have gone belly up.

They give money (big money) to projects that are located outside of the physical boundaries of the Empowerment Zone, like the CityLink homeless mall or the Mallory Center. This money is given because of inside connections, and it is illegal to disburse those funds to projects outside the zone.

In a convoluted tale, the CEO of the Empowerment Corp just bought a property that made him a landlord to Junebug, who is a board member that has served longer than any other on the CEC board. Junebug is Harold Cleveland’s boss, but Harold Cleveland is Junebug’s landlord. Cleveland could raise or lower the rent on Junebug, and Junebug could vote to raise the pay or fire Cleveland. As an added caveat, Cleveland bought the property from a person that received a quarter of a million dollar loan from the CEC. And that loan is currently “non performing”. In English, non performing CEC loans = free money for your cronies at the expense of the community and the taxpayer.

Even the lawyers for the Cincinnati Empowerment Corporation found that Dale Mallory’s relationship with CEC board as “Troubling”.

Dale Mallory appointed three members (Junebug, Garrett, and Howard Beatty) to the Empowerment Zone board of directors when he was President of the West End Community Council (without ever clearing it with the members). One of those people was Howard Beatty. Howard Beatty was a functional illiterate dishwasher at Junebug’s restaurant. His most recent claim to fame was gunning down Kabaka Oba in front of City Hall. The people Dale appointed hired him as a consultant who reported directly to them.

Junebug’s wife even works with the zone. The self dealing from the Genesis days has never stopped, it only gets bigger. The people repeatedly waste critical resources earmarked from legitimate urban development.

Don’t overlook the fact that the previous City Manager released a report stating that 60% of the funds allocated to the Empowerment Zone never make it out of Harold Cleveland’s office. You would think a fraud investigation would start right there.

Given all these facts, people called for an investigation. Guess what? Nothing happened. Another day in paradise.

29 Comments:

Anonymous Anonymous said...

Dear Ms.Throat,
Loved your movie. I thought you died.
And if you are Mr. Felt of the FBI, you died too.
Don't tell me that there is a 3rd DT.
Whatever.....you did a wonderful job in putting the EZ news into perspective.
Keep this up and Male Dallory can retire forever.
As other posters have noted, this Mallory whitewash won't go away. Now Dahoney has dirty hands his 1st week in office.
FBI/HUD now have 2 more unindited co-conspiritors. This is duly noted by the Truth Squad.
Good citizens of Cincinnati deserve better!
Let's print copies of this report and pass them out at all community council meetings.
Let's make sure all in city council has copies.
Good job Ms. Lovelace, you are one talented lady.

5:30 AM  
Anonymous Anonymous said...

excellent recap!
need to tie in the Mallorys/N8/CPD to the Oba death.
Beatty is the drug kingpin and has a free pass to run guns and drugs to da hood.
He's the EZ bagman too an makes sure the Mallory Mafia/CPD is paid off.
That guy from Avondale on the Cunninham show nailed it.
Deep Throat, tie that into your story and you will have a best seller on your hands.

6:35 AM  
Anonymous Mina said...

Boy, I tell you, politricks is a nasty business in this city. This is a very concise layout of this mess. I was wondering why the new city manager was shoved down everyones throat. I guess this clears that up.

7:15 AM  
Anonymous Anonymous said...

Cervay has been limiting access to what should be public information.

8:45 AM  
Anonymous Curtains said...

You people need to capitulate. It's all over but the cryin'.

Actually there is a lot of cryin' on this board.

11:20 AM  
Anonymous Jimmy Carter said...

Bill Seitz has been running his mouth round town. The bi-partisan effort to fleece the taxpayer is impressive. The only thing that Hamilton County Dems and Repubs can agree on is that we don't matter. Fuck Bill Seitz and the horse he rode in on.

11:34 AM  
Anonymous Nate Livingston said...

The real reason you are against the EZ is that you hate the poor. It's just that simple.

12:57 PM  
Anonymous Anonymous said...

Nate,
We love poor retarded stumplegged homeless folks on the down low.
Nate, that's why we love the N8 ball.
We let you on our blog and vent your misinformed poison.
You sure do LOVE this blog.
It gets much more traffic than your wacko POS.

3:42 PM  
Anonymous Anonymous said...

Nate supports the Empowerment graft. Imagine what would have happened if they were fully funded.

3:55 PM  
Anonymous Mustafa said...

If the EZ was producing tangible results I bet they would have been fully funded. But when most of the cash goes to staff and the rest goes to cronies what is the use of fully funding the enterprize? 84% of the loans are bad, which means giving them any more money is throwing good money after bad.

7:40 PM  
Anonymous Anonymous said...

Today we got hits from Wash Dc,CA,NYC,Japan and London.
The whole world wants to see Dale go down in flames.
Hale yes!

PS. The CA hit is 3M's aunt in LA, she's a blog regular (reads it to Fannie)

anon 4:42 N8, JB and 3M are on the down low

8:04 PM  
Anonymous Carstairs said...

Deep Throat, this is a stupendous summary of how this all fell, & ending with Mallory's hand picked dough boy from Lexington.

Steve Goodin, one of the EZ's attorneys called their self-dealings & book cooking "troubling". The Enquirer reported that they had corrected their deficiencies & were brought into compliance.

I want to know just exactly what these non-compliance issues were & going forward, is there going to be stricter oversight of these thieves?

Memo to Curtains 12:20: you haven't seen anything yet. Stick around. A few of us came up with yet another fabulous idea. It will certainly keep that pot stirred up.

Yes indeedy. As Blanchard alluded to once before, those covers on the bed are getting mighty lumpy, now that Cervay & Dohoney have hopped in with the rest of this criminal bunch.

Jimmy Carter, I agree with you on Bill Seitz & that worn out glue factory nag he's been riding.

Nate, you pathetic drama dwarf, go back over on your own spot. You're only supporting the down & out because your pockets get lined with ready spending cash so you can gas up that big white Jeep Cherokee of yours that you wheel thru the drug areas. You got blocks on the pedals so your stump legs can reach 'em? You go, boy!

Dyanamite report & I vote that copies get passed around the 32nd District like the weekly grocery store ads!

8:15 PM  
Anonymous Mina said...

Hi everybody, when you get a chance check this out.

http://www.whoisthehnic.proboards31.com/index.cgi?board=whatshouldbe&action=display&thread=1152231558&page=3

I just wanted to see what some other people thought.

9:30 PM  
Anonymous Anonymous said...

Is there any way to get access to the 2003, 2004 & 2005 self audits? They should be public records. I say if they won't hire an independent auditor we need to do the job ourselves.

1:25 AM  
Anonymous Anonymous said...

Blog chatter.
The Dean's blog had this comment:
"Let’s just say this - the ever-present story has it Kabaka really had some goods on what’s been taking place in the West End. Joy Rolland didn’t get that man killed. Kabaka knew way too much & was going to bring it all down. Talk with folks in the West End. They’ll tell you. "
This is the buzz that won't die.
Beattys/Mallorys killed Oba cause he knew too much.
JB brags about killing folks that get in his way.
JB is Dale's enforcer.
JB/D4S wanted Oba to shut his mouth about their drug business.

6:45 AM  
Blogger Michael Earl Patton said...

Mina: I've just read the article. I'll say it, and I'll sign my name to it. That transaction was outrageous. If it stands, then the city has given a green light to the looting of taxpayer dollars. Congratulations to Stephanie Smith for doing the right thing by resigning from the board.

7:53 AM  
Anonymous The Kaiser Soze said...

Mr. Patton,

Steph Smith took a stand against the corruption, but shortly after reversed her decision. She works at Fifth Third. The EZ shifted their accounts over to Fifth Third at the same time she reconsidered and stayed on with the EZ.

Maybe she was just mad that she wasn't getting her piece, cause one she got it she sure shut the hell up about the corruption.

9:43 AM  
Anonymous Anonymous said...

Steph Smith is the Ez answer to Joy Roland.
That psycho b***h rants to hear herself talk.
The girl loves the limelight and is sucking up to Cleveland to get her pork.

11:31 AM  
Blogger Michael Earl Patton said...

Kaiser Soze:

I'm going to withhold judgment on Ms. Smith as to why she's still on the board, as you say. She complained about the transaction, which has several conflicts of interest apparent. It's possible the paper would never have run the story if she hadn't spoken out. A non-profit corporation handling tens of millions of taxpayer dollars should not be generating all this smoke and daring us to find out if there's actually a fire.

I stopped by the city manager's office and asked for a copy of the 2005 audit for the CEC. They said that they had just received it and have to review it before it can be released. They said they'll mail me a copy when that's done.

12:12 PM  
Anonymous The Kaiser Soze said...

I stopped by the city manager's office and asked for a copy of the 2005 audit for the CEC. They said that they had just received it and have to review it before it can be released. They said they'll mail me a copy when that's done.

The City of Cincinnati resumed funding the corporation on August 23rd. That was two weeks ago, and one week after they had the audit. They have had the audit for three weeks. If you are telling the truth, they haven't even reviewed it yet, despite turning the public spigot of funds back on. That is disgusting.

12:32 PM  
Anonymous Anonymous said...

Michael,
Since they *just* got the 2003, 2004 & 2005 self audit in. Ask to get those too. It's harder to hide bad behavior over a multi year period.

Also ask for when they expect to finish reviewing it. I'll bet you are getting the run around, or at the very least they are waiting until after the November elections.

12:33 PM  
Blogger Michael Earl Patton said...

Kaiser Soze:

I'm just repeating what they told me. It would be good if someone else asked for a copy, too.

I have a copy of a letter from Milton Dohoney to the mayor and members of council, dated Sept. 1, '06. To quote from it:
"There is an active investigation of the Corporation by the Federal Bureau of Investigation and the Cincinnati Police Department. The City is proceeding to identify an accounting firm that will conduct a thorough review of the Corporation's contractual performance. This operations audit is anticipated to include an intense analysis of the operations of the Corporation to include the following: whether the Corporation followed federal regulations and contract provisions in the procurement of services, (including consultant services), goods and property (inclusing real property); and whether there are any conflict of interest issues relative to the Corporation's operation."

12:50 PM  
Anonymous The Kaiser Soze said...

I believe you. That is interesting. Is that letter on the internet? If not, do you have a scanner? Send it to the blog heads and they can post it up there.

It sounds like council asked the new manager what happened after the read in the paper that funding was turned back on August 23rd.

Council called for an investigation in June. Here we are in September and the City hasn't even found an accounting firm to do the work. It takes a long time to do an audit. What the city has basically done is make sure that no finding can be made before the next election in November. Dale Mallory walks again.

1:28 PM  
Anonymous Anonymous said...

Dear Mr. Patton,
Please bring a copy of the letter to the next WECC meeting.
We will get it to the blog manager.

4:13 PM  
Anonymous Carstairs said...

Mina, I've been following what the folks are saying over at WhoIsTheHNIC. It's so nice to hear what everyone else is saying. They bring a lot of good info to the blogwaves!

Stephanie Smith - some of you will recall several weeks ago when Cleveland & Smith were called on the carpet at a City Hall Committee meeting & didn't have everything Laketa Cole & others asked for. You'll also remember Cleveland had his tongue in knots & his panties wedged so tight that Smith took over as his mouthpiece & got rather nasty & inappropriate about the whole business.

Keep your eye on this Big Gal. Something isn't exactly right here, either.

MEP, great work! This is certainly nice to know. However, we'll keep the pressure on & keep getting the word out there on Dale. There's one little piece of business that might take flight in the next few that will keep that hot spotlight on Dale. Someone might have something to say about it at the next WECC meeting.

We're going to keep pushing, Truth Squad! It ain't over yet!

4:23 PM  
Anonymous Anonymous said...

Carstairs,
The Hale Yes parade went through the West End, OTR and Mt. Adams.
We know you were there, why no report?
The crowd was so receptive. Dale's a crook and they know it!
Love the handouts. They are fresh........not the recycled crapola D4S is dumping in the West End. His family gives him $30,000 for a campaign and the boy spends it on hookers and drugs.

9:35 PM  
Blogger Michael Earl Patton said...

Kaiser Soze and Anonymous:

Sorry, no scanner. I also have a copy of the list of "project spending" made by the CEC "through the end of fiscal year September 2005," which was given to the Vibrant Neighborhoods Committee by Mr. Cleveland on August 7.

I'll try to get these scanned in somehow before the next WECC meeting.

10:12 PM  
Anonymous Wolverine JR & Family said...

Dear TSers:

Not normally what you hear from me on this, however this takes down some of the gangs that should really be watched, the political gangs. Seeing Vincent, Goldman and Burke asking for closed door meetings to further distance the matters from voters and neighborhoods is the foxes trying to take full control of the henhouse.

Insider at cityhall noted that Cranley and Crowley would not sit still for this whatsoever. Cole sits on the fence until daff Dwight or Dick Weiland tell her how to move. Berding and Bortz under similar influences as Dickie reps for Bengals, too. Monzel, Tarbell, Ghiz very mum to see where their best trade offs are while Thomas still wants to be part of the political gravy trains in Western Hills and through his influential Indian Hill mob of contributors.

And the one with testicular fortitude is the Mayor? Hmmm? Didn't see that coming, but it's refreshing to note. Still does not solve the D$S matter and the Beatty gang. Mr. Mayor, could you write a note to the Beattys and tell them to get lost, too? THAT would be the real news!

Perhaps living in the hollow tree in Mt. Airy you've forgotten the gun shots, intimidation and drug pandering of the west end. Perhaps you think we don't know that provocateurs of pills, weed and drugs of choice made your life as miserable as many of us have to fight daily. Saving your parents is admirable. Saving your old neighborhood is priceless. Don't see your ship go down to co-dependent traits and being intimidated by the beattybugs. Be as bold with the harmful bastards outhere as your words have been to the hapless party heads.

This will fall on deaf ears of pride and family loyalty that comes before pure public service. Our expectations for our neighborhood is much higher than yours is for it. Don't fault us as we continue our fight. We will fight for our homes, you stick with the safety of the tree house.
Thanks for the one day "Wow" letter. Definitely.....because we do not have you worth in work or words here......double HALE YES!!!


Enquirer and Beacon
September 5, 2006

George Vincent, Chair, Hamilton County Republican Party
Michael Goldman, President, Charter Committee of Greater Cincinnati
Tim Burke, Chair, Hamilton County Democratic Party

Dear Chairman Vincent, President Goldman, and Chairman Burke:

I write to you today in response to your letter concerning the proposal to place an amendment to the City Charter before the voters in the November election. The proposal would amend the Cincinnati City Charter to conform with the Ohio Open Meetings Act, allowing City Council to adjourn to executive session.

Adopted 1926, the City Charter is a landmark in city government reform and has made Cincinnati a national leader in good government. Amending the Charter is a very serious endeavor and must be undertaken with the utmost caution and only after extensive deliberation.

I have several concerns with the timing of the current proposal. I believe that before any amendment is placed on the ballot there should be extensive public input and debate on the issue. Public input is especially important since this proposal asks the voters to voluntarily exclude themselves from certain proceedings of city government. I first heard about this proposed amendment on Friday and just received your letter today, so I am sure that most citizens are unfamiliar with the proposed amendment.

The City of Cincinnati faces many serious and difficult challenges that must be addressed in the coming months. Our main focus should be addressing the priorities that are important to the citizens of Cincinnati and that will improve the quality of life in our region.

I do not believe that it is in the best interests of the city to put this amendment on the ballot without first conducting hearings in public. Therefore, I will not be scheduling this amendment for a vote at the September 7th meeting of Council. If you have any questions about this matter or if you wish to discuss it further, please fell free to contact me directly.

Sincerely,


Mark Mallory

Mayor of Cincinnati

Cc: Members of Cincinnati City Council Members

1:43 AM  
Anonymous Anonymous said...

MEP,
Bring them to the WECC and we will arrange to get them scanned in.

6:56 AM  

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