West Oakland Councilmember Involved in House-Flipping Scheme 

Public records show that city Councilmember Lynette Gibson McElhaney, who represents a district impacted by gentrification, used her social justice nonprofit to finance for-profit house-flipping deals in Oakland.

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Reynolds said that since 2012, Gibson McElhaney has only worked part time as executive director, and "her salary has been reduced commensurate with this reduced status."

Beginning in June 2014, we sought records from Richmond Neighborhood Housing Services, including the organization's articles of incorporation, conflict-of-interest policies, and most recent IRS Form 990 tax returns. Three months later, in September, Richmond Neighborhood Housing Services representatives finally provided us with a copy of their organization's 2012 tax return. They did not provide us with their articles of incorporation or conflict of interest policies.

In response to our questions about a potential conflict of interest concerning Andrea Gibson Nobles' co-investment in deals with Richmond Neighborhood Housing Services, the organization's board president said that the board had recently considered the matter, and found no violations. "Your inquiry alerted Lynette [Gibson McElhaney] about the potential conflict of interest with the loan made to Nakatoma Investment by her sister Andrea [Gibson] Nobles," wrote Richmond Neighborhood Housing Services president Maxine Reynolds. "After learning this information, Lynette immediately informed the Board Chair and Treasurer of this conflict and the matter was discussed before the full Board within a week of the revelation. We engaged in a lengthy discussion with Lynette and Mr. [Richard] Reese. We were assured, and believe her statement, that Lynette also did not know that her sister had made such an investment. Mr. Reese apologized for any misunderstanding, stating that it is his policy to maintain investor confidentiality within his funds. He further stated that Andrea is no longer an investor with Nakatoma and that he was not aware of any other potential conflicts. He further added that Ms. [Gibson] Nobles only participated in one transaction."

In her letter to us, Gibson McElhaney claimed that she had no knowledge of her sister's co-investment alongside Richmond Neighborhood Housing Services. "I learned that Andrea [Gibson] Nobles had invested in one of the projects on or about November 30 after Mr. Reese confirmed information provided by Darwin [BondGraham] in his email inquiry. Prior to getting the press inquiry, I had neither knowledge of nor any cause to believe that Andrea [Gibson] Nobles was engaged in any financial transactions with Nakatoma."

Yet despite her assertion that she didn't know about her sister's investment in Nakatoma, Gibson McElhaney admitted to us that it was Gibson Nobles who introduced her to Reese in 2013. "I believe she met Mr. Reese through a realtor that was helping her shop to purchase her own home," Gibson McElhaney said about her sister.

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