council spends 
millions with little oversight
By Jon Seidel
Post-Tribune staff writer
Published Nov. 10, 2008

GARY — Gary City Council members use broad spending power and minimal public oversight to quietly cut checks worth thousands of dollars to recipients of their own choosing every year.

Between 2004 and 2007, as the city hurtled closer toward a time of annual budget shortfalls worth millions of dollars, council members spent $2.1 million from a “promotional account” designed to shore up beneficial community programs, city records show.

A nine-month Post-Tribune review also found thousands of dollars landed in bank accounts of groups tied to, or falling directly under, federal scrutiny. 

When the council voted on a 2009 budget filled with job cuts last week, it earmarked another $217,515 for this promotional fund, officially labeled “grants and subsidies.”

Monitoring the money as it is spent can be difficult, though. Gary’s Board of Public Works and Safety votes only on individual council expenses if they involve contracts worth more than $5,000. Otherwise, the board votes on spending in bulk.

Most council members consider the signature of the council president, who signs every claim, to be the final authority. That title, which rotates annually among the members, is held this year by Ronier Scott, D-6th District. 

“The only person who really knows about those funds is the president,” said Roy Pratt, D-at large, the council’s longest-serving member.

Community aid

Gary trimmed its 2009 general fund budget by $8 million. New property tax laws could force it to cut as much as $36 million, though, creating the possibility of significant public service cuts next year.

The city intends to ask for help from Indiana’s Distressed Unit Appeals Board. Gov. Mitch Daniels, who appointed most of that board’s members, said cities seeking relief must first try to dig themselves out of their own financial crises.

The money in the City Council’s promotional account is divided among the council members each year at the discretion of the president. It is meant for organizations in Gary doing something that benefits its citizens directly, Pratt said.

“You can’t go to an organization in Merrillville or Hobart or something,” he said. “You can’t use the promotional account for that.”

Previous council presidents said they would rarely veto the spending.

“Each district member knows their district better than a president knows their district,” said Carolyn Rogers, D-4th District and 2004 council president.

Records provided by the city controller’s office reveal a heavy emphasis by the council on schools and religious groups in Gary between 2004 and 2007.

At least $300,000 went to Gary schools or other educational programs. That includes $20,250 for The Charter School of the Dunes and $163,350 for West Side High School.

“The Gary Common Council has been very helpful,” said Sarita Stevens, spokeswoman for the Gary Community School Corp.

Another $20,000 went to churches or other religious organizations.

Ties to federal probes

Among those to benefit the most was the Glen Park Coalition of Concern, a not-for-profit housing assistance group based in Merrillville.

City records indicate Scott gave $104,000 to the agency between 2004 and 2007. That doesn’t appear to include a $75,000 grant from Scott to the Coalition of Concern at the end of 2007.

The Coalition of Concern’s agent, according to public records, is Schererville attorney William Crabtree II, who pleaded not guilty last month to federal embezzlement charges.

“This is news to me, what you’re telling me now,” Scott said when asked about Crabtree.

NPC LLC, a video production company owned by Otho Lyles III, received $40,000 from Rogers in that same time period. Rogers paid NPC to make educational videos about demolition in her district.

Lyles pleaded guilty in 2004 to lying to federal investigators as they researched corruption at Gary City Hall. He later pleaded guilty to a tax evasion charge, and records show he agreed to a U.S. magistrate judge’s order to garnishee his wages earlier this year.

“He made a mistake, and I don’t think that should be held against him,” Rogers said.

Former council member Robert White, who represented Gary’s 2nd District, directed at least $20,000 to the Gary Urban Enterprise Association in 2004.

Jojuana Meeks, GUEA’s director at the time, later pleaded guilty to several criminal charges of misspent money at the agency. She reported to a federal prison to begin a six-year sentence earlier this year.

White was convicted on federal fraud and money laundering charges and began serving his five-year sentence in 2006.

Significant help

Other groups that benefitted from the money in the past are noticing the funds are beginning to dry up, though, as the city cuts spending. They hope the council manages to hold on to the programs as cost-cutting continues next year.

Dharathula “Dolly” Millender, chief executive of the Gary Historical and Cultural Society, said she has used money from the council for building repairs and minimum-wage paychecks for staff.

City records show Millender’s organization received more than $30,000 from the council between 2004 and 2007.

“They should keep that fund,” Millender said. “I know that they’re having trouble with money. Someone should praise them for spreading the money around.”

Brothers’ Keeper, a homeless shelter, received more than $61,000 from the council between 2004 and 2007, records show. Asked about the significance of the money, director Mary Edwards said it can be crucial in tough economic times.

“We would have to find it someplace else,” Edwards said. “If we couldn’t find it any place else we would have to close our doors. We have to have some funds.”

Checks totaling $15,000 went to the Gary Christian Center between 2004 and 2007, the records show. The Rev. Charles Jones said it supplemented his programs, but it was never considered a sole source of revenue.

“It’s a help. It’s an aid,” Jones said. “It doesn’t take care of the total responsibility and cost, of course. We appreciate any assistance we can get for anyone.”

Future reconsidered

When asked about the money, many long-time members of the council spoke to the importance of helping the community in times of financial hardship.

“If we eliminate all of that, you know, then of course it’s a trickle-down effect,” Marilyn Krusas, D-1st District, said.

Kimberly Robinson, D-5th and the newest member of the council, said she wouldn’t have a hard time eliminating the item from the budget.

“If it’s not essential to our being or to our job as it relates to a councilperson,” Robinson said, “then, you know, it could all be cut.”

Ragen Hatcher, D-at large, used her money to create $500 scholarships for Gary students this year. Recipients included Sankara McCain, a Calumet High School graduate now studying dance at Howard University.

“It was really a great help,” McCain said.

Hatcher plans to continue funding scholarships for local students. The program caught the attention of at least one of her colleagues.

“I really like councilwoman Hatcher’s position that she’s taken,” Rogers said.

Several members, including Rogers, expressed an interest in being more careful to make sure the money goes directly to Gary residents as the city tightens its fiscal belt in 2009.

“I haven’t really spoken with anyone about that,” Rogers said, “although I was going to speak with the president, whoever that might be, for next year.”

NEXT: Councilwoman spends $40,000 for “best in the business” video

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