Easy money isn’t always a breeze
Who should decide how to spend $58 million in leftover federal cash?
Let’s say someone hands you $58 million. Then the person says, “Well, um, you can’t exactly keep it. You’re supposed to hand out the money. But you can give it to yourself!”
What’s the difference, you might ask, between flat-out pocketing the wad and being able to give it to whomever you want, yourself included? That’s what a group of advocates for the poor want to know regarding beaucoups of cash awarded to Atlanta by the federal government.
The $58 million in question is left over from a $100 million federal grant that Atlanta won in 1995. The grant was meant to improve the lives of people who live in a nine-mile-long, poverty-stricken plot called the Empowerment Zone. (The money was supposed to be disbursed among small businesses and grassroots agencies to create affordable housing, jobs and social services.) Call it EZ money.
In eight years, the now-defunct board that managed the EZ money allegedly squandered some of the $42 million it spent. Groups applying for portions of the dough complained that the process was confusing — and that the criteria by which applicants were approved were shady. It’s even alleged that a small army of former-Mayor Bill Campbell’s pals and contributors got special treatment.
Enter the Renewal Community, whose soon-to-be-named leaders will replace the EZ board. The Renewal Community must be formed by the end of March — or else the feds are taking their millions back.
The Renewal Community will face the challenge of doling out all the remaining EZ money within 18 months. That’s when EZ’s 10-year lifespan will expire. (The money must be spent the way it was originally intended.)
All might be fine and good — after all, what’s so hard about quickly handing out money to under-funded nonprofits who serve the poor?
The problem is finding the right people and, in turn, the right strategy to manage the money. The strategy didn’t work out the first time around.
This time, Mayor Shirley Franklin is placing bets on the Atlanta Neighborhood Development Partnership. The 12-year-old, nonprofit firm has built housing for low- and middle-income families and has convinced private corporations to donate to the cause. In fact, the Partnership’s 29-member board is mostly made up of corporate types, such as Bank of America, Georgia Power and Coca-Cola execs.
The mayor favors the Partnership for obvious reasons; it has provided around $7 million in grants to smaller nonprofits and has a mission that most closely resembles the spirit of the EZ money.
“My personal opinion is that this is probably the last time we’re going to get any federal funding for rebuilding some of the oppressed corridors of the city,” says Partnership CEO Hattie Dorsey.
The problem is that Mayor Franklin has proposed that the EZ money be controlled by a Renewal Community board that is manned in part by the Partnership’s board — and the mayor wants the Renewal Community’s staff to be staffed by the Partnership’s staff. And the mayor might allow the Partnership to vie for the money the Partnership, uh, that is the Renewal Community, will control.
Consider that the Partnership once named Franklin among its board members, and it seems the EZ money’s new management is shooting for a reputation potentially as incestuous as that of its predecessor.
“What we’re dealing with is an organization that is loaded with all the same conflicts, all the same ethics problems, all the same issues we’ve dealt with over and over and over again with the EZ,” says Scott Ball, executive director of the Community Housing Resource Center. The Center is part of a group of nonprofits called Atlanta Housing Association of Neighborhood-Based Developers, which has opposed the way EZ money has been handled.
That association isn’t opposed to the Partnership managing the money, according to a letter sent last week to Mayor Franklin. It just wants to convince the mayor it’s a conflict of interest for the Partnership to compete for the money some of its board members control.
The Council is expected to vote on the Partnership’s role concerning EZ money in the next month. The mayor will then appoint the Renewal Community board.