INC NEWS - Where are tax dollars are going

[kjj1 at duke.edu]

Caleb:

Yeah, this story was pretty bad. Especially when we have Self Help Credit 
Union right downtown. They would have seemed good candidates--with a proven 
track record and a history of investment in downtown--for recognition and 
for the kinds of funding mentioned in the article.

Kelly Jarrett


--On Thursday, September 28, 2006 8:34 AM -0400 Caleb Southern 
<southernc at mindspring.com> wrote:

> This is where our tax dollars are going (see below).
>
> Rather than to priorities, such as:
> - fixing potholes and sidewalks, paving streets
> - cleaning up litter and illegal dumping
> - mowing
> - law enforcement and courts
> - free yard waste pickup
>
> How many giveaways to inept or crooked groups do we have to suffer, while
> our basic city services languish?
>
> Caleb Southern
>
> ***
>
> Durham's link to firm at issue
> Money woes dog credit counselor
>
> Michael Biesecker, Staff Writer: News & Observer
>
> DURHAM - The city of Durham is urging residents facing bankruptcy to seek
> advice from a private credit counseling firm that has struggled to manage
> its own finances.
>
> Now operating under the name Durham Regional Financial Center, the company
> filed for Chapter 7 bankruptcy protection in 2003 and lost its downtown
> headquarters building, bought and renovated with a $600,000
> city-supervised grant, when creditors foreclosed. The national agency
> that reviews credit counselors revoked the firm's accreditation in 2002.
>
> Earlier this year, the Durham nonprofit garnered further scrutiny when
> newly hired administrators at the city's troubled housing authority
> discovered a sweetheart deal under which the firm was paid $88,720 for
> doing little or no documented work.
>
> Reports in The News & Observer that the housing authority's former leader,
> Frank Meachem, had also served on the private firm's board of directors
> helped spur federal authorities to ban him from working for organizations
> that receive government money for three years.
>
> But none of that stopped the city of Durham from inviting a representative
> of Durham Regional to accept a public proclamation marking Dollar Wi$e
> Week, a nationwide financial literacy effort. At a Sept. 18 meeting of
> the City Council, Durham Regional employee Vivian Timlic decried the
> frequency of bankruptcies in the United States and recounted how many
> families fail because of money problems.
>
> "It keeps us awake at night. It causes us to look at our caller ID before
> we answer the phone, am I right?" asked Timlic, who shook the hand of
> Durham Mayor Bill Bell and received the bound proclamation. "We take
> financial literacy very serious at Durham Regional Financial Center. And
> our CEO, Ms. Glyndola Massenburg-Beasley, has very high standards. ... We
> want to truly thank you for recognizing us."
>
> Space at City Hall
>
> A media release issued by the city's public affairs office Friday urged
> those needing help to call the credit firm, which holds bimonthly
> homeownership workshops in a basement conference room at City Hall. Though
> other firms were mentioned, Durham Regional was promoted most prominently
> in the release.
>
> "Bell and Durham Regional Financial Center ... are committed to providing
> a variety of personnel finance seminars and events throughout the year --
> many held at Durham's City Hall -- to help residents avoid financial
> scams, learn to manage and save money, reduce credit card dependency and
> invest in ways to provide assets for their families and their community,"
> said the media release, which provided contact information for those
> seeking help to call Durham Regional.
>
> The mayor said Wednesday he relied on the city staff to recommend someone
> to accept the proclamation and to promote in the media release. Though he
> reviewed the release before it was distributed, he said he did not
> remember the past, well-publicized financial problems with the firm and
> its chief officer, Massenburg-Beasley.
>
> "It was a goof," Bell said. "I thought the name sounded familiar, but I
> didn't think any more about it. What I should have done and didn't do was
> ask the staff how we selected the group to receive the proclamation."
>
> Massenburg-Beasley did not respond to calls Wednesday. Over the past 15
> years, she has operated credit counseling and economic development firms
> under several different business names that public records and tax returns
> show have won well in excess of $1 million in taxpayer-funded grants and
> contracts.
>
> In 1999, records show U.S. Rep. David Price shepherded a bill through
> Congress that earmarked $600,000 for "economic development" purposes by
> Durham Regional. Reached by The N&O last spring, the congressman's office
> said it had no records regarding the money or why it was granted. The
> congressman had no recollection of Massenburg-Beasley, a spokesman said.
>
> The federal money was distributed to the city's Office of Economic
> Development, which was responsible for monitoring its use. With city
> approval, Massenburg-Beasley spent $414,415 of that money to buy a
> building at 413 E. Chapel Hill St. Much of the rest of the grant was
> reportedly spent on renovations to the three-story, 18,183-square-foot
> building.
>
> According to a 2003 petition filed in federal bankruptcy court,
> Massenburg-Beasley's firm soon ran up nearly $1.5 million in debts --
> including $740,000 in mortgages secured on the building that was bought
> free and clear with taxpayer money just three years earlier. In addition
> to a bevy of banks and creditors seeking repayment, some of
> Massenburg-Beasley's employees also filed claims, saying they were owed
> thousands in back pay.
>
> The city still awarded the firm $75,000 in grant money in 2004 and another
> $5,000 in 2005 -- both disbursements approved by the City Council. A
> request from Durham Regional for additional funds earlier this year was
> rejected, but the firm holds classes on city property free of charge.
>
> Deputy City Manager Wanda Page said Wednesday that she had seen media
> reports in the past about financial problems with Durham Regional, but
> that did not raise red flags when it came time for the city to recommend
> a debt counselor to its residents.
>
> "The media release was what it was," Page said.
>
> Staff writer Michael Biesecker can be reached at 956-2421 or
> mbieseck at newsobserver.com.
>
>
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