The inspector general of the federal agency that provided grants and awards of more than $800,000 to Mayor Kevin Johnson's nonprofit St. HOPE Academy has lashed out at the terms of his agency's settlement with St. HOPE as "a farce."
The settlement requires repayment of half the amount and it lifted a suspension barring St. HOPE, its former executive director Dana Gonzalez and Johnson from receipt of any federal funds as punishment for misuse of the money.
In a 29-page "Special Report to Congress" earlier this month, Gerald Walpin, inspector general of the Corporation for National and Community Service, said the settlement:
• "Sends the signal that acceptance of a grantee or its principal as 'responsible' can be purchased in a monetary settlement, overriding all evidence of wrongdoing previously found to warrant a suspension, without the presentation of any contradicting evidence."
• "Provides no protection of the corporation's interests. While papering it to appear that Johnson and … St. HOPE … have agreed to give back half of the $847,673, … in fact, that is false. Johnson is paying nothing; while he advanced (money for St. HOPE's initial payment), Johnson has no obligation to pay one cent, … and he can very promptly even obtain reimbursement (of the advance).
"Moreover," Walpin continued, "St. HOPE's financial condition is so precarious that it is unreasonable to count on St. HOPE to be able to make the 10 years of payments provided by the settlement agreement."
Touting the settlement as being in the government's interest "is an attempt to pull the wool over the public's eyes," Walpin charged.
He also says on his office's Web site that the corporation, instead of commenting on his report when it went to the Senate Committee on Health, Education, Labor and Pensions, cited a formal complaint about Walpin lodged by Acting U.S. Attorney Lawrence Brown, and told the committee "it would only provide its comments when the complaint is resolved."
Brown wrote a letter April 29 to a branch of the FBI that polices the integrity of all federal inspectors general asking for a review of Walpin's performance throughout the investigation of St. HOPE.
Brown would not comment Wednesday, nor would Johnson.
The Corporation for National and Community Service and Walpin's office did not return calls seeking comment.
Following an investigation last year, Walpin's office accused Johnson and other St. HOPE officials of improperly using some of the $847,673 in federal money received between 2004 and 2007.
Federal officials said they supplemented salaries for St. HOPE school staff with grant funds and engaged volunteers in political activities, such as canvassing for school board members and running personal errands for Johnson.
The findings were submitted to the U.S. attorney's office for review. Negotiations on a civil settlement concluded last month with an agreement that Johnson and St. HOPE will repay more than $400,000 in grants.
Call The Bee's Denny Walsh, (916) 321-1189.
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