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Living large on the public dime

Living large on the public dime

From the Story collection: Chaos in Cairo series

CAIRO – Hundreds of people here rely on public housing for shelter, with the average income among Alexander County Housing Authority residents just $8,655 a year, the majority of them raising children and nearly half as single mothers. More than half of the county’s children live in poverty, and nearly a third are considered food insecure – meaning they don’t always know from where their next meal is coming.

But some of those who were charged with overseeing the shelter upon which many of them rely, lived large, records show, traveling extensively to conferences in destination cities, drinking on the authority’s dime, shelling out hundreds of dollars for steak, salmon, shrimp cocktails, sorbet and other multi-course meals, sometimes paying nearly $100 per person at fine-dining establishments.

Meanwhile, the public housing developments that provide shelter in the state’s poorest county have deteriorated into abysmal conditions, besieged by infestation and violent crime. In 2014, the U.S. Department of Housing and Urban Development, or HUD, following a review of its finances, listed the housing authority’s status as “troubled.”

As an example, receipts from the numerous trips include a $100 bill on Dec. 14, 2012, at La Salsa Cantina in Las Vegas, that is almost entirely alcohol purchases. Drinks bought using the authority’s credit cards, include a frozen margarita ($8.95); a frozen strawberry margarita ($9.50); and two cocktails called JamaicaMe Crazy ($19.90), which is a mixed drink that one website describes as tasting like strawberry-banana Starbursts, only better.

Click here to view a sampling of receipts showing extensive travel, fine dining and purchase of holiday gifts for employees and board members.

This and other drink and dinner tabs, as well as lodging and airfare for some trips, appear, based on an extensive review of records, to be paid for using the authority’s line of credit even as participants also received an “expense” voucher cut before their trips.

These vouchers are based on accounting that includes -- as part of the calculation -- reimbursement for mileage to far-off destinations, as if a personal vehicle was taken, even though participants flew in most cases. The vouchers also appear duplicative in nature – as in, it seems as though the authority provided “reimbursements” for at least some expenses also pre-paid or funded on location using the authority’s line of credit, such as for transportation, lodging and some meals.

December 2012 Las Vegas example

Again, as an example, for this particular trip to Las Vegas in December 2012, then-Executive Director James Wilson also received a check for $1,565.61 to cover expenses cut to him a few weeks prior to the trip, on Nov. 28, 2012, based on the apparent travel policy at that time of the Alexander County Housing Authority. Though he flew, Wilson calculated the amount owed to him based on mileage from Cairo to Las Vegas – 3,460 miles round trip – at $1,920.30.

Wilson, who declined comment for this story, put down for six days of lodging at $75 per night, for a total of $450, even though hotels for trips, including this one, appear to have been paid for separately using the authority’s credit card. He additionally claimed eight days of meals at $60 per day for a total of $480, even though at least some meals were paid using the authority’s credit card, according to receipts.

These items add up to $2,850.30. Then, Wilson subtracted a 30 percent deduction of $855.09 for “alternate travel” from that amount, and also subtracted $429.60 in airfare purchased using the authority’s credit card. That’s how he arrived at his expense voucher amount of $1,565.61 – or roughly $780 per day for a two-day trip, with most expenses pre-paid.

In the comment section of his voucher report, Wilson wrote that the check was for travel expenses to attend a conference called, “TSA: Preventative Maintenance Training.” An organization called the Training Services Association, according to its website, offers a course under that name that is designed to help public or private managers of housing stock “substantially reduce their long-term maintenance costs by strengthening their preventative maintenance procedures.”

The documentation shows that the training took place on Dec. 13 and Dec. 14, 2012. The $100 tab of mostly drinks at LaSalsa Cantina located on the Las Vegas Strip is timestamped at 12:58 p.m. on Dec. 14, 2012, the second day of the conference. Receipts from that trip also included $82 paid to a company called Las Vegas Limo on Dec. 12.

Wilson retired three months after that Las Vegas trip, in March 2013.

Presently, an extensive review of the housing authority’s properties is in process, and it’s unclear if the two family developments in the worst condition – the Elmwood and McBride apartments – can be salvaged. That’s the case, at least in part, because there was a failure to maintain basic preventative maintenance at the 70-plus-year-old developments – the very focus of the Las Vegas training that cost the housing authority thousands of dollars to send Wilson and others.

In response to a question to HUD officials about whether these travel reimbursement procedures were appropriate, spokeswoman Gina Rodriguez said the agency is “not prescriptive regarding a PHA’s local travel policies” though they must comply with “federal financial management principles.”

Rodriguez said HUD "does review their (housing authorities’) policies and practices if allegations are brought to our attention and/or during routine reviews of the authority.” Asked if the practices of the Alexander County Housing Authority had been reviewed, Rodriguez responded they had not because “they have just come to our attention.”

By spring 2015, the housing authority was in such financial straits that it was on the verge of being unable to pay its light bill or meet payroll. Contacted for this story, Wilson said: “After that last piece, I’m not speaking to you anymore. Bye, bye.” He then hung up the phone.

The Southern Illinoisan has reviewed hundreds of receipts, credit card statements, and other financial documentation provided by the Alexander County Housing Authority in response to a public records request as part of its ongoing “Chaos in Cairo” investigative series that first published on Aug. 23.

Voucher receipts show Wilson received “travel vouchers” for just shy of $15,000 – based on a similar formula as described above – in the year prior to his retirement, and thousands more was paid out to his traveling companions. That amount appeared to be for eight trips for Wilson to long-distance conferences between February 2012 and March 2013, when he retired as executive director but was retained as a contract consultant.

On any given trip, multiple employees and/or board members appear to be present, according to the review of travel vouchers and receipts.

The following is a list of when and where Wilson traveled that year, and how much he received in a pre-trip “expense” vouchers for at least some expenses that also appear to have been charged to the authority’s credit card:

• Feb. 14-16, 2012, conference in Las Vegas; voucher total: $2,025.10

• May 5-9, 2012, conference in Seattle; voucher total: $2,548

• July 28-30, 2012, conference in San Francisco; voucher total: $2,880.10

• Sept. 7-9, 2012, conference in Washington, D.C.; voucher total: $956.03

• Dec. 13-14, 2012, conference in Las Vegas; voucher total: $1,565.61

• Jan. 13-16, 2013, conference in San Diego; voucher total: $2,178.67

• March 3-7, 2013, conference in Las Vegas; voucher total: $1,759. 41

• March 15-20, 2013, conference in Clearwater Beach, Florida; voucher total: $768.65

In the initial article in the “Chaos in Cairo” series, the newspaper reviewed HUD documents alleging misspending by staff to the tune of hundreds of thousands of dollars and discriminatory practices in housing and employment practices, as well as other agency documentation showing unusual and generous retirement incentives, benefits, bonuses and contracts. Taken in total, the documents and other interviews reveal a pattern of gross mismanagement, negligence, and possible illegal spending of taxpayer dollars intended to provide for the poor on trips and dinners.

When Wilson met with the newspaper in August, he admitted to approving some salaries and benefits that were too generous and couldn’t be sustained as federal cutbacks were ordered. But he defended the travel as necessary training for himself and staff, and denied any illegal activity.

“I tell everybody we’re just like the state of Illinois,” he said then. “We lived it up too good. And we didn’t see this coming and we thought it would last forever and when the (federal) cuts came, we weren’t in a position to handle it. That’s exactly right.”

Fancy meals, big bills

Examples of other large food expenses while traveling include a $305 bill at Bobby Van’s Steakhouse in Washington, D.C., in September 2011, which included purchases for a $44 Cajun ribeye, a $41 filet mignon, and sorbet for desert. Another for $249.49 from Fisherman’s Wharf in San Francisco is not itemized. A $225.86 bill from Lambert International Airport in St. Louis includes two double Tanquerays for $23.38, and three double Jack Daniels for $35.07.

At Ruth’s Chris Steak House in San Diego, the bill was $290, and included a $30 petit filet, a $30 ribeye, and a $44 medallions with shrimp entree. An oft-listed dessert item on the myriad receipts, one person ordered a $6 raspberry sorbet to finish off the evening.

When it came to swiping the authority’s credit card for meals, it seems administrators did so freely, even in town. Hundreds of dollars additionally were spent at Las Brisas Mexican restaurant in Charleston, Missouri, about 20 minutes from Cairo. Some receipts list the purpose as a meeting of administrators; others have no listed purpose. A Cape Girardeau Applebee’s receipt for two from February 2012 in the amount of $28 has “Supplies: Exec. Dir. Office” scribbled at the top.

Other receipts show the housing authority spent handily through the later years, as the finances tanked, on holiday parties, decorations and gifts that included hams for board members, multiple gift cards for employees, and about $600 worth of engraved items from Things Remembered for some employees.

$420,000 reimbursed in 15 years

Through the newspaper requested all relevant receipts related to reimbursements, not all expenses were accounted for in the review of documents, meaning the documentation either doesn’t exist or wasn’t provided to the newspaper. Records show that the Alexander County Housing Authority wrote reimbursement checks (outside of payroll) to six administrators and six board members totaling more than $420,000 over the course of about 15 years.

An accounts payable summary report provided to the newspaper shows that the majority of that, more than a quarter of it, went to Wilson, above his regular salary and benefits, which were, combined, about $150,000 upon his retirement.

Records show he received checks totaling $120,623 between October 1997 and May 2014. Some of the distributions listed on the accounts payable sheet match the amounts and dates written to Wilson for travel vouchers, but other payments to Wilson did not seem to correspond with a matching request for reimbursement or otherwise have an explanation that was immediately clear.

Checks to Wilson over the years range from roughly $4 to more than $10,000, with many ranging between $1,000 and $3,000.

The largest check on the list cut to Wilson is for $10,566.23 on Oct. 7, 1997. A check was written the same day for $7,157.22 to David Hodges, who worked at one time as a maintenance supervisor and later as an administrator in the office charged with overseeing accounts payable. The newspaper, as of deadline, was not able to receive any clarifying information on the purpose of these checks.

In total, between 1997 and 2013, Hodges received checks totaling $58,799.26 from the accounts payable fund, above his regular wages and benefits.

Others received the following amounts in travel vouchers or payments for other expenses either not easily identified in the records request, or not made available to the paper.

• Employee Warden Sanderson, between 1999 and 2005, received $9,268.44

• Employee Joe Williams, between 1998 and 2013, received $26,357.70

• Former finance director Martha Franklin received checks totaling $56,831 between 2002 and June 2015.

• Doug Franklin, also listed as a former employee, received checks between 1998 and 2005 totaling $9,057.17. Martha Franklin’s late husband, according to an obituary, was William Douglas Franklin.

• Former board member Mike Brey, a former Cairo fire chief, received $23,012 between 2010 and 2014.

• Board member Judson Childs, former mayor of Cairo, received $22,861, between 2001 and 2014.

• Board member Andy Clarke, who served previously, exited the board, and is back on as its chairman, received $8,036.71 between 2005 and 2009.

• Former Board member James Huffman received $3,677.43 between 2004 and 2014.

• Former Board member John Price, between 2007 and 2014, received $12,163.98. Price also represented employees as the lead negotiator for the Laborers’ Local 773.

• Longtime board chairwoman Irene McBride, who remains on the board as a member and is the tenant representative for the board, received $63,749. Much of McBride’s payments are in $200 increments, which was described as a payment that the housing authority was making to McBride for her service on the board, and as president of the tenant council. These positions are not typically paid, and they were stopped in April 2015 at HUD’s insistence.

Attempts were made to reach the majority of the employees or board members listed above, though phone numbers could not be located for several. McBride, reached by phone and asked about the $200 regular payments, said she did not “care to talk about that.” Childs said that a review would show they were all legitimate reimbursements for travel for training purposes.

Asked how the voucher amounts were determined, Childs accused the newspaper of “nitpicking” and said he did not wish to continue the conversation.

“Why are you questioning me like that?” he asked when the newspaper pressed for details on whether he was required to submit receipts for reimbursement, and other information about how the travel voucher policy worked. He added, “You’re about to piss me off” and exited the call.

Clarke, the present board chairman, blamed the bulk of the problems on Wilson. When he was in charge, “Everyone on the board took James Wilson at his word.” When a travel voucher for expenses was issued, Clarke said he and others had no reason to think it wasn’t in accord with all policies, as they were told. “In retrospect, we’re finding out that it wasn’t,” he said. In hindsight, Clarke said, he and others would have asked more questions and handled it much differently had they known Wilson’s accounting methods for travel reimbursement were not standard government practice.

“No board member would have taken a penny if they thought it was illegal,” he said. “I just always thought that type of bookkeeping was allowed.”

Attempts to reach Franklin were also unsuccessful, who went on to serve about a 1-1/2 years as executive director beginning in March 2013, even though she apparently lacked the college degree required, as advertised, for the job, and had previously pleaded guilty in federal court to financial crimes. 

Wilson said previously that Franklin had earned a GED, and had finance training from working at the Laborers’ International Union Local 773, making her qualified to oversee the agency’s books, and then step into the top leadership role.

Franklin was in charge of the agency when HUD officials underwent an extensive review, and issued a host of citations regarding mismanagement and misallocation of funds, even though she pleaded guilty in federal court seven years prior to financial crimes.

In 2006, according to a news release from the U.S. State’s Attorney’s Office for the Southern District, William and Martha Franklin pleaded guilty to a one-count information charging both with criminal contempt of court by filing a false bankruptcy petition with the intent to conceal assets, and thereafter testifying falsely under oath in a bankruptcy proceeding.

An obituary shows William Franklin died in July 2012.

Three months after his death, Oct. 31, 2012, the housing authority issued a $16,000 check to Ally Financial and paid off the loan on her late-husband’s 2011 truck, which may have violated procurement procedures. This amount is not included in the accounts payable documentation under Franklin’s name, and the housing authority, which took possession of the truck, was unable to say whether documentation showed if she reported the loan payoff as income to the IRS.

Wilson decided in late 2014 she no longer wanted to be executive director, and returned to her previous role as finance director. For ending her contract early, she was given $5,000. Shortly thereafter, Wilson stepped back in as executive director, this time writing a contract the board agreed to that would pay him $15,000 up front for three months of services, and allow him to keep all the money should the contract be terminated by either party.

After a few weeks, Wilson left the job and said he had no intention of returning any of the money for time he did not work because a contract signed is a contract that should be honored.


On Twitter: @MollyParkerSI ​


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