Money from neighborhood councils tempts some members


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Los Angeles Police are investigating a community activist and criminal convicted of misusing tens of thousands of taxpayer dollars while serving as chairman of his neighborhood council.

The James Harris case is just one of six cases involving treasurers or ward council chairs who allegedly mis-spent up to $ 250,000 in city money.

The inquiries raised questions about the city’s financial oversight of community volunteer groups – for example, none of the treasurers were subjected to credit or background checks. And the polls have drawn attention to what some activists see as a system that poses challenges for even the most well-meaning participants.

Although the neighborhood council system was established in 1999 to give residents a greater voice in community affairs, some members say they have been distracted by difficulties resolving internal disputes, confusion over the laws governing their communities. meetings and heavy financial formalities. Four councils are currently unable to hold meetings due to internal disputes, city officials say.

To pay for projects in their communities, each of the city’s 89 groups has historically been allocated $ 50,000, which can be spent through municipal checks or a credit card issued to each treasurer. Although every expense is supposed to be approved by the entire neighborhood council, investigators found that some were not.

So far, the Los Angeles County District Attorney has filed felony charges against four treasurers. In addition to Harris’, at least one other case is still under investigation. Advice on misconduct has been pouring into the city’s Neighborhood Empowerment Department since officials began posting neighborhood council transactions on the Internet in 2007 to improve transparency.

Two treasurers have pleaded guilty to crimes involving embezzlement of public funds this summer, one faces his next court hearing later this month and a case has been dropped because the defendant died before trial.

“I can’t believe the city is handing out credit cards like this – it’s amazing,” said David Demerjian, head of the public integrity division of the district attorney. He added “there was not much defense in any of these cases.”

Michele Siqueiros, president of the Council of District Commissioners, declared that “the majority of [neighborhood council] money was spent on “great things” such as cleaning up graffiti, community events and beautification projects.

“There are powerful things that neighborhoods are doing with these funds, and we want them to continue,” she said.

BongHwan Kim, who assumed the role of director general of the Neighborhood Empowerment Department in late 2007, said problems were confined to a small group of treasurers who acted alone and the department is proactively tackling issues. problems. But he said that when it was created, the $ 4.5 million neighborhood council fundraising program “was never well enough thought out to prevent this kind of criminal activity.”

Although an online ethics training session is required for each member of the ward council board every two years, only a third of the more than 1,600 members have complied, according to records. . And there has been little consequence for treasurers who do not submit budgets or documentation for their expenses. Recently, city authorities have started to freeze their funds.

In the case of Harris, who served as president and temporary treasurer of the Empowerment Congress Southwest Area Neighborhood Development Council, city officials have asked the Los Angeles Police Department to investigate the repeated cash withdrawals that have occurred in the area. ‘unaware of his advice.

In a note to police, Kim said Harris submitted what appeared to be fraudulent invoices and event sign-up sheets with fictitious names. Officials were also concerned about the “possibility of dealing with another community organization and gift cards purchased for questionable purposes.” The Neighborhood Council donated $ 6,784 to Harris’ Employer, a South Los Angeles economic development and drug abuse group known as the Community Coalition. The group was founded by Assembly President Karen Bass (D-Los Angeles), and its board of directors includes Rev. Leonard Jackson, senior advisor to Mayor Antonio Villaraigosa.

City officials also asked police to investigate what they described as overpayments for two administrative assistants which totaled more than $ 53,000 between June 2006 and January of this year.

Harris’s work with ex-offenders, gangs and addiction organizations has been praised by Deputy Mayor Larry Frank, who oversees community affairs, and Community Coalition executive director Marqueece Harris-Dawson.

“We have immense respect for James; we really hope this matter can be resolved where james can continue his work in the community, ”said Harris-Dawson. “Losing someone like James in a community like ours can be devastating.”

Harris declined to comment for this report.

Authorities declined to comment on Harris’ background, but court records show he was convicted in 1990 of disorderly conduct involving prostitution and illegal possession of a firearm in 1996.

In the summer of 2007, members of the Alameda Central Ward Council noticed curious accusations from their treasurer, Genia Jackson, who failed to submit her financial reports.

Records show she withdrew $ 5,000 in cash in just two months and made more than 30 purchases at clothing, thrift and shoe stores and a school uniform store after taking up her post in September 2006. There were also purchases from Hertz Rent-A-Car, Premier Inn, New Wave Beauty Supply, New Fashion Wigs and LA Nails.

At Jackson’s preliminary hearing this year on charges of embezzlement by a public official, fellow ward council member Jimena Toscano said council members never asked Jackson how the money was being spent “because we always assumed it was for our neighborhood projects.” . “After being alerted to the suspicious charges, it was three months before city officials removed the city of Jackson’s credit card. After pleading guilty in August, Jackson is now considering paying the city back more than $ 18,000.

Her attorney, Louisa Pensanti, said there was no excuse for Jackson’s actions, but she noted her client had cancer. Pensanti added that she was shocked at the city’s lack of oversight: “It was unlimited credit. It was as if someone handed you a credit card and said, “Go ahead”. “

Likewise, Chris Elwell, former president of the Olympic Park Neighborhood Council, said “it took an incredible amount of time” for city officials to suspend Treasurer Verna Jones, who allegedly withdrew $ 15,000 in cash, according to the report. a memo from the city, and used the council’s credit card for car rentals, gas, shipping, and trips to city restaurants.

Elwell said issues with Jones had ignited already strained relations among neighborhood council members who could not agree on how to handle the matter. “When the board met, it was ‘The Ricki Lake Show’,” Elwell said.

The advice from the Neighborhood Empowerment Department kept changing, Elwell said: “They kept trying to ask us to review spending somehow – we weren’t able to have a meeting. . “

After discovering unauthorized charges online, members of the Empowerment Congress Central Area Neighborhood Development Council also struggled to get responses from President Frank Prater, who was later accused of illegally spending $ 30,797.

When Los Angeles County Supervisor Mark Ridley-Thomas served on City Council and later the California Assembly, Prater was part of his team. City Councilor Bernard C. Parks subsequently appointed Prater to the Neighborhood Council Review Commission.

Prosecutors alleged that Prater, who died before his case went to trial, made cash withdrawals at the Normandie Casino and spent $ 8,315 on the Jimmy Jam t-shirt business, $ 4,500 on food purchases , nearly $ 2,000 in vehicle expenses and nearly $ 250 in a piece of jewelry. store.

Former North Hollywood Northeast Neighborhood Council Treasurer Jeffrey Brooks admitted to using his group’s credit card for household expenses, including his cable bill, after losing his job, court documents show. He was ordered to pay the city $ 28,637 in restitution.

The Neighborhood Empowerment Department is considering stricter limits on cash withdrawals, a formalized system for boards to approve every transaction and the requirement for treasurers to submit their fingerprints.

Siqueiros said “there must be a balance between providing adequate support and training for neighborhood councils” while preserving their autonomy.

But with significant budget cuts over the past two years, Kim said his staff struggled to keep up to date with even the quarterly audits they performed of each neighborhood council.

The 43-post department currently has only one auditor, assisted by two accountants, who performs this work.

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