Ellis confident 'people did what they were supposed to do' with grant money

Former Macon Mayor Jack Ellis' administration has been accused of misusing federal funds and making false statements to government officials, according to a letter to the city from U.S. Attorney Max Wood's office.

The government wants much of the grant money back, and civil penalties also could reach in excess of $1 million, the letter states. The letter doesn't mention any potential criminal actions but says the Ellis administration told the federal government that "the city had spent the funds in accordance with the terms of the grant."

"All those certifications were false," the letter states.

Ellis, who left office in December, is the only city official named in the letter, which was sent to Mayor Robert Reichert on April 2. The letter states that the U.S. attorney's office is willing to negotiate on the civil penalties, likely lowering the amount the city would have to pay.

Ellis said Monday that he was confident the city spent the money the way it was supposed to, much of it through Macon churches, and he's not worried about potential criminal repercussions.

"I am confident that every penny that we spent, every penny, ... people did what they were supposed to do," Ellis said. "I'm sure (grant administrators and the ministers) did what was right or what they thought to be right at the time. ... And I'm sure at the end of the day everything will work itself out. At least I'm hopeful."

Reichert said he will meet with U.S. Attorney Max Wood on May 13 to discuss the allegations and a possible resolution. The mayor said he still is trying to gather information on the matter and does not know at this point whether any criminal charges could be forthcoming.

"They have not intimated that to me and I have no knowledge as to what recourse they are pursuing," said Reichert, adding that he has had no communications with federal officials other than the April letters. "Based solely on the letter, it sounds like they haven't been able to find any evidence, or appropriate evidence, to support criminal charges."

The grant in question is a Safe Schools Initiative grant from 2002, which the city used to help fund various church youth programs. Of the $900,000 the city received, about $350,000 was lost to "false claims being submitted to an agency of the United States," the letter states.

Council members were handed copies of the letter from Wood's office Monday morning, at a ground-breaking ceremony for the convention center hotel. Many of them said they had been aware of the federal investigation or potential problems with the grant, but were first made aware of the government's allegation this morning.

"This letter contains some disturbing information," said Councilwoman Elaine Lucas, a member of the city's Appropriations Committee. "Right now the city cannot afford this kind of financial responsibility. ... We are just shocked now to find out that all of the money can't be accounted for."

Councilman Rick Hutto said he was not surprised, though, adding that he has had concerns since he saw flags raised in a 2004 audit that he said suggested problems with the grant's accounting.

"I've been warning about this for three years," Hutto said. The councilman, a former attorney, said his interpretation of Wood's letter is that the Justice Department has the ability to seek the full amount under the law but is willing to negotiate "in an effort to get a quick resolution of the issue."

"Nobody wants to see the U.S. attorney in protracted litigation with the city," Hutto said.

Ellis, who's in North Carolina campaigning for Sen. Barack Obama in his presidential bid, said he didn't know the U.S. attorney's office in Macon sent the city a letter last month broaching the possibility of a $1 million-plus civil suit to recover grant funds. That letter also refers to allegations that the city misspent the money, then made false statements about the spending.

The former mayor said no federal investigator has spoken to him about the Safe Schools Initiative grant at issue or any other federal grant. Asked if he was worried about the possibility of criminal charges as an outgrowth of the issue or from others being examined by federal investigators, Ellis responded, "Of course not. I have no concern whatsoever."

Ellis said that former Police Chief Rodney Monroe, who headed the department while it administered the grant by doling out money to various church groups, would not have permitted misuse. As for the ministers who spent the money on youth programs, "I'm sure that they didn't use this money for anything that it wasn't intended to be used for."

Ellis said a federal audit of the program several years ago did turn up about $30,000 or $40,000 in expenses that needed more supporting documentation, but Ellis said that was addressed while he was mayor.

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