Tuesday, June 20, 2017

City of Oakland Poised to Give Public Land to Nonprofit that Improperly Received $710,000 in County Funds

by Darwin BondGraham
Tue, Jun 20, 2017 at 2:40 PM

Elaine Brown is the CEO of Oakland and the World Enterprises, and also a staff member in Supervisor Keith Carson's office. - OAKLAND AND THE WORLD ENTERPRISES, INC.
  • Oakland and the World Enterprises, Inc.
  • Elaine Brown is the CEO of Oakland and the World Enterprises, and also a staff member in Supervisor Keith Carson's office.

The Oakland City Council is scheduled to vote tonight on a deal to sell city-owned land near West Oakland's BART station to a nonprofit that improperly obtained hundreds of thousands in county tax dollars, according to the Alameda County Grand Jury. The city would sell the land for a nominal price, even though it's worth $1.4 million, in order to subsidize an affordable housing project on site.

Further complicating the deal is the fact that the nonprofit's leader sued the City of Oakland last year, alleging that councilmember Desley Brooks attacked her at a barbecue restaurant. The lawsuit is ongoing, and Brown is seeking millions in damages from the city.

The nonprofit, Oakland and the World Enterprises, was set up by former Black Panther Elaine Brown to build affordable housing and operate an urban farm in West Oakland. It also plans to build a grocery store, restaurant, fitness center, and technology center at the location.

But according to the Grand Jury, Brown's group was given $710,000 by Alameda County Supervisor Keith Carson at the same time Brown was a paid staff member in Carson's office. "[T]he dual role of the county employee in these transactions constituted both a failure of good governance practices by the county of Alameda and a conflict of interest," concluded the Grand Jury in their investigation, which was published yesterday.

Brown is currently listed as a staff member in charge of job creation and West Oakland constituent services on Carson's supervisor web site.

According to tax records and other documents, Brown incorporated Oakland and the World Enterprises in 2014. The organization's 2015 tax return states that she received no salary or other pay.

In 2015, the organization received $290,000 in government grants. According to the grand jury, this was money allocated to the group by Alameda County's Housing and Community Development program through the proper channels and procedures.

But according to the grand jury, the organization's invoices sent to the county seeking payment of these funds "insufficiently explained" the reasons for certain expenditures.

Then, according to the grand jury, "over the ensuing months, there were multiple communications between HCD (including a contractor retained by HCD) and [Brown] about OAW’s request for funds under the contract," which ultimately resulted in $102,527 paid to Oakland and the World on May 2, 2016.

No other funds under the county's contract with the group were dispersed.

Over the same period of time, Supervisor Carson's office used its own funds that were available under the county's Fiscal Management Reward Program, to pay Oakland and the World a total of $710,000. The largest payments were made in April 2015 (for $290,000) and March 2016 (for $300,000). These payments don't appear in any publicly available tax forms filed by the organizations.

The grand jury found that there are not sufficient oversight rules to limit the ways the supervisors can use their FMRP funds, which add up to millions each year.

There isn't a 2016 tax return available for Oakland and the World Enterprises, according to the grand jury. The Express searched for the group's 2016 tax return through Guidestar.org and the California Attorney General's Office and confirmed that a copy isn't yet available.

Furthermore, the organization's 2015 tax return doesn't explain how it spent the $290,000 grant from the county HCD program. Instead, there is a $181,733 expenditure for "other" types of "fees for services" to non-employees. The attached schedule that is supposed to detail the spending is incomplete.

On March 24, the California Attorney General's office sent Oakland and the World Enterprises a letter warning the group that it's ability to operate as a nonprofit is in jeopardy because it hasn't provided its 2014 and 2015 tax returns along with other disclosure reports.

The Oakland City Council is currently considering whether to sell the West Oakland land, located at the corner of 7th Street and Campbell Street to the nonprofit.

The proposal to sell the land cleared a council subcommittee last week with councilmembers Larry Reid, Noel Gallo, Annie Campbell Washington, and Lynette Gibson McElhaney all voting yes.

According to a city staff report, Oakland and the World Enterprises first approached the city about the land in 2014. Under the proposed deal, the nonprofit would acquire the real estate, which is worth $1.4 million, at virtually no cost. The city would also provide a $2.6 million loan for the affordable housing project.

Brown sued the City of Oakland last year claiming that she was assaulted by Councilmember Desley Brooks in the Everett and Jones restaurant in October 2015. The district attorney never pressed charges, but Brown is seeking $7 million in damages from the city and Brooks.


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