Thursday, May 1, 2008

Brooklyn Councilman’s Funds for a Group He Founded Were Blocked

Published: May 1, 2008

The first chance he had to spend the discretionary funds that City Council members control, Mathieu Eugene directed $45,000 last year to a nonprofit Brooklyn group that was close to his heart: a youth sports and mentoring program he had founded and headed until his electi

Ruby Washington/The New York Times

Councilman Mathieu Eugene helped a group he founded.

Robert Stolarik for The New York Times

Signs at the youth group’s former headquarters with the names Youth for Education and Sports and Liberty Multiple Services.

The fact that Mr. Eugene had run the group, Youth for Education and Sports, was no secret. It had been widely reported during his election campaign last year.

But the city’s Department of Youth and Community Development refused to approve the spending last fall and recommended canceling all its contracts with the group.

The city’s auditors expressed concern about the group’s performance on prior contracts and criticized the way it kept its records, including its inability to produce timesheets for one of the employees, Mr. Eugene’s brother.

At least some of the matters of concern appear to have surfaced during the time Mr. Eugene was running the organization, which has provided karate, basketball, mentoring, after-school and weekend programs to young people in central Brooklyn.

Mr. Eugene says that while he was in charge, it was a worthwhile agency without problems, one he felt committed to support as a council member.

Mr. Eugene’s allocation, however, underscores the wide discretion that council members have in financing programs with which they have deep and longstanding ties.

In disclosure forms released this week, more than a dozen council members acknowledged channeling money last year to community organizations where they or a relative had a connection. City and federal investigators are now reviewing those spending decisions to determine the extent to which city money has been squandered on organizations whose primary appeal has been a council member’s ties to the group.

The inquiry has led to charges against two Council aides who were accused of embezzling at least $145,000 in city funds that Councilman Kendall Stewart directed to a nonprofit agency run by his chief of staff.

No council members, including Mr. Stewart, have been implicated in any wrongdoing.

Mr. Eugene founded the youth mentoring group more than a decade ago. He was its executive director through nearly all of its history, during which time it has received nearly $500,000 in city contracts.

Alin Jean, the former chairman of the group’s board, said Mr. Eugene had done a good job while with the group. “If some kids didn’t end up in jail or the cemetery,” Mr. Jean said, “it was because of that program.”

Mr. Eugene’s brother, Maxi, also worked for the group, although Mr. Eugene said his brother left when he did last year.

A sign on the exterior of the group’s former headquarters at 681 Ocean Avenue designates it as the community center for Youth for Education and Sports. Maxi Eugene had an insurance and tax preparation business, and a separate sign reads “Liberty Multiple Services,” and lists his phone number as well as the phone number for the youth organization.

Asked about the sign, the council member said he did not recall it but said that the youth group sometimes donated space to other organizations. Told that the phone number was that of his brother, Mr. Eugene said: “But he was not running it inside the office. I remember that; there was a sign but he was not running it there.”

His brother, a licensed insurance broker, did not return several calls seeking comment. Other members of the youth group’s board said they did not think Mr. Eugene had run his business out of their offices.

On its latest Internal Revenue Service filings, which cover 2005, Youth for Education and Sports reported paying Mathieu Eugene $10,921 in salary and spending $12,790 for salaries and wages for others. It also paid $10,538 for unspecified consultants.

Mr. Eugene listed the youth group as his only source of income in 2006 in a financial disclosure form filed with the city’s Conflicts of Interest Board. Though he was trained as a doctor, Mr. Eugene, who is originally from Haiti, is not licensed to practice medicine in the United States.

Mr. Eugene took his seat after two special elections, during which other candidates questioned whether he lived in the district. Once he won the second election, last April, one of his first responsibilities as a council member was to decide how to apportion his discretionary spending.

He put $45,000 toward Youth for Education and Sports, and $13,500 was allocated by other Brooklyn council members. Mr. Eugene said that, as a precaution, he sought and received verbal clearance from the Conflicts of Interest Board to finance his former organization.

But in September, the city’s youth department said it was canceling the group’s contracts and would not approve the new allocations. The agency said in a memo to the Council that it was concerned with the group’s performance over the prior year despite “numerous technical assistance efforts.”

During an unannounced visit to the group’s offices in August, city officials said they had also found more potential problems with record keeping. For example, the memo said the new executive director, James Belabre, was unable to produce any personnel records because he said he did not have a key to the filing cabinet that day.

The department also noted that the group appeared to be charging a monthly fee of $30 to $60 for services, in violation of its city contract. Mr. Belabre, who had worked as an administrative assistant under Mr. Eugene before replacing him as executive director, said in an interview that the fees were optional for people who wished to contribute to the group.

Councilman Eugene said on Wednesday night that the group had functioned well during his tenure. He said he was still being stopped on the street by people asking about it.

“It provided services to many children and their parents,” he said. “What this organization has provided cannot be counted in the amount of money it received.”

Russ Buettner contributed reporting.

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