04/01/04 — Accountabilty: Millions are lost on ‘good causes’

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Accountabilty: Millions are lost on ‘good causes’

The road to the poor house is paved with contributions and “investments” in behalf of good causes.

This is not to suggest that as individuals, organizations and governments we should turn our backs on the needs around us. But we should be careful that our contributions and investments are used effectively and responsibly.

In recent years and even in recent months we have seen millions of dollars misused, frittered away or spent with no tangible evidence that the intended good causes were properly served.

Project Homestead — not to be confused with Habitat for Humanity — is a recent example here at home.

The city of Goldsboro donated land for Project Homestead to construct 57 affordable homes, largely for flood victims. The city also secured a $630,000 grant from the state for street and utility improvements on the property. A condition was that at least half of the homes would benefit flood victims.

Of the 37 homes that were built, only seven were bought by flood victims. Fifteen of those who did buy homes there subsequently filed complaints of shoddy construction.

The city reportedly had an “agreement” with the Rev. Michael King, founder and chief operations officer of Project Homestead, that any land not developed would return to the city. Unfortunately this was not recorded with the deeds.

Meanwhile, King borrowed $60,000 from the Bank of America, using the vacant lots as collateral.

Subsequently, Project Homestead went belly up. The Rev. Mr. King committed suicide amid reports of an investigation in Greensboro into his use of money intended for the developments.

Goldsboro’s dilemma today is that it faces the possibility of having to repay the $630,000 state grant and it is second in line behind the bank in claiming the undeveloped land it donated to King.

Goldsboro has plenty of company in its misery.

The out-of-town developer undertook similar projects across the state. The city of Greensboro “invested” $5.8 million in Project Homestead there.

When King’s enterprises collapsed like falling dominos, the city of Goldsboro found itself caught in the aftermath.

Citizens must be pained to ask who was tending the store while thousands of dollars of theirhard-earned and painfully paid tax money went down the drain in the noble-sounding but ill-fated project.

A recent Associated Press story from Greensboro might well provide part of the answer — at least at the corporate level of Project Homestead.

An audit showed that the board charged with overseeing the “non-profit” Project Homestead’s operations either looked the other way or condoned without question as the founder and chief executive officer went his merry, high-spending way.

He charged off as “business expenses” upwards of a million dollars on such things as luxury cruises, jewelry and liquor. At one point his board of directors gave him a $30,000 bonus to supplement his $150,000 annual salary.

In a recent letter to the editor of the News-Argus, Dr. Terry Frazier was on target when he focused on the city of Goldsboro’s unfortunate involvement with Project Homestead: “How many city council members who voted to condone this project would have done so if their own hard-earned money were at stake? Would not they have investigated further?”

Of course, city officials might respond that they, too, are taxpayers and consequently shared in the loss. But perhaps they would have been moved to be far more careful had they been faced with full, personal financial accountability.

And morally, perhaps they should be.

Published in Editorials on April 1, 2004 10:42 AM