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Federal probe accuses Johnson of improper use of St. HOPE funding

Published: Friday, Sep. 26, 2008 - 12:00 am | Page 1A

The federal government Thursday released findings of its investigation into management of the nonprofit St. HOPE volunteer program founded by Sacramento mayoral candidate Kevin Johnson, citing violations that include having youthful participants run personal errands and wash his car.

The findings from the federal probe followed by a day the government's announcement it was barring Johnson, St. HOPE Academy and a former official from access to federal grants and contracts for up to a year.

That, in turn, left city officials scrambling Thursday to figure out what it would mean if Johnson were elected mayor. Questions that the city attorney is looking into include whether Johnson would be able to vote on projects involving federal funds and whether his position at the helm would affect the city's eligibility for federal money.

Meanwhile, worried parents whose children attend Sacramento High and a K-8 school run by St. HOPE called its office Thursday wondering whether the suspension of federal funds would affect their students' education.

St. HOPE, based in Oak Park, runs an array of nonprofit endeavors, including the schools, a development company, an art gallery, and Hood Corps, the urban peace corps program at the center of the investigation. Johnson ran all the St. HOPE programs until he stepped down earlier this year, saying he wanted to focus on his mayoral bid.

The federal funding suspension was triggered by a months-long investigation into Hood Corps' use of AmeriCorps funds. The program received $807,000 between 2004 and 2007. Federal funding for the program was not renewed last year.

In a notice of suspension sent to Johnson on Wednesday, an official from the AmeriCorps agency said evidence indicates that Johnson, as president and chief executive of St. HOPE Academy, improperly diverted grant money.

"The evidence is adequate to suspect that you have committed irregularities which seriously reflect on the propriety of further federal government dealings with you," wrote William Anderson, a debarment and suspension official with the federal Corporation for National & Community Service, which oversees the AmeriCorps volunteer program.

William Portanova, a lawyer representing Johnson, said the former NBA star plans to appeal the suspension. Portanova characterized the violations at St. HOPE as "relatively minor issues that have long since been resolved."

"With government funding, differences of opinion lead to public pronunciations of sin," Portanova said. "It's very discouraging to people whose hearts are truly set on helping others."

According to the suspension notices, however, federal agents found "numerous potential criminal and grant violations."

In its contract with AmeriCorps, the notices said, St. HOPE agreed that volunteers would tutor students, redevelop one building a year in Oak Park and help in marketing and operations at the organization's theater and art gallery.

Instead, Hood Corps members were "assigned to perform personal services for your personal benefit, including driving you to personal appointments, washing your car and running errands," the letter to Johnson said.

Hood Corps members also were used "to engage in banned political activities," including canvassing for school board members, and were used to recruit students for St. HOPE's charter schools, "an impermissible activity," according to the letters.

Some were assigned as janitors or clerks at St. HOPE's charter schools, the letters said.

Other violations cited included supplementing St. HOPE school staff salaries with federal grant funds by enrolling them in AmeriCorps, and taking members assigned to Sacramento to New York City to promote St. HOPE's charter school in Harlem.

Johnson's placement on the list of people and agencies off-limits for federal money could last up to 12 months or until the completion of the federal probe into St. HOPE, according to federal officials.

Agents recently turned over findings from their investigation to the U.S. attorney's office in Sacramento, where prosecutors will decide whether to file charges or seek restitution. Previous penalties for other groups have ranged from fines to jail sentences.


Call The Bee's Terri Hardy, (916) 321-1073.


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