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Violations detailed in St. HOPE probe

Editor’s note: This story was originally published on Sept. 26, 2008.

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.

Rick Maya, who in January replaced Johnson as head of St. HOPE schools, maintained that the suspension would not affect Sacramento Charter High School and P.S. 7, the K-8 school, because they are separate from St. HOPE Academy, which oversees Hood Corps.

Still, Maya said he hadn’t gotten any notice from the federal government confirming that the suspension does not affect the broader array of St. HOPE organizations, including the schools. Sacramento High and P.S. 7 received $1.3 million in fiscal 2006-2007, according to St. HOPE financial statements.

A spokesman for the Corporation for National & Community Service declined Thursday to provide additional clarification to The Bee.

“That creates a tremendous amount of instability and concern, which is bleeding into our public schools,” Maya said.

Federal officials also declined comment on the ramifications for the city of Sacramento if Johnson is elected mayor while on the banned list. But William O. Hillburg, spokesman for the federal inspector general’s office, said individuals suspended from receiving federal funding cannot vote on federally funded programs that come before them as employees or board members.

A larger question, according to City Attorney Eileen Teichert, is whether having Johnson as mayor could jeopardize the city’s eligibility for millions of dollars annually from the federal government for such big-ticket items as road and levee repairs.

“I don’t have an opinion yet because obviously we’ve never had to deal with such a situation in the past,” Teichert said. “However, we are in the process of contacting the appropriate persons at the (Office of the Inspector General) to get their opinion as to what the scope of this ruling means, and we will be doing our best to assure that the city and its ability to receive federal funds is protected.”

Portanova, Johnson’s lawyer, said the suspension would have no effect on Johnson’s ability to perform his mayoral duties. “Our conclusion is that it is very clear that Kevin Johnson can act and interact with the United States government ... as mayor of Sacramento,” he said.

Johnson, in New York City for a fundraiser, was not available for comment Thursday.

His campaign manager, Steve Maviglio, suggested in an email to The Bee that the federal government had political motives.

In one message, Maviglio referred to Gerald Walpin, inspector general of the Corporation for National & Community Service, as a “controversial right-wing Republican.”

Political analysts said the timing of the suspension could prove a blow to Johnson’s campaign, given that absentee voting begins in less than two weeks. Still, they said, it’s debatable whether voters will weigh the findings above other factors as they consider which candidate to back.

“When you’re in a leadership position, you are prone to take some hard knocks as well as some accolades,” said Ray McNally, a Republican political consultant who is not involved in the race. “Will it decide this race? No. Is it an issue the voters will look at? Yes.”

ST. HOPE VIOLATIONS FOUND

Federal investigators said they found a number of violations, including:

* Misusing AmeriCorps members, financed by federal grant funds, to personally benefit Kevin Johnson, including driving him to personal appointments, washing his car and running personal errands.

* Unlawfully supplementing St. HOPE school staff salaries with federal grant funds by enrolling two employees in the AmeriCorps program and giving them federally funded corporation living allowances and education awards.

* Improperly using members to engage in banned political activities, namely canvassing for school board candidates.

* Improperly taking members assigned to serve in Sacramento to New York City to promote St. HOPE’s establishment of a Harlem charter school.

* Misusing AmeriCorps members, who, under the grant, were supposed to be tutoring elementary and high school students, to instead serve in clerical and janitorial positions at St. HOPE’s charter schools.

* Misusing AmeriCorps members to recruit students for St. HOPE’s charter schools.

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