INC NEWS - Where are tax dollars are going

[Caleb Southern]

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.