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Macon's handling of federal grant in question

The U.S. Department of Justice has warned it could sue the city of Macon for more than $1 million for allegedly misusing $350,000 from a federal grant and making false claims about how the money was spent.

An April 2 letter to Mayor Robert Reichert from U.S. Attorney Max Wood's office doesn't give details about how the money — meant for various youth programs through the federal Safe Schools Initiative — was allegedly misspent or specifically who was responsible. It also doesn't mention any potential criminal actions but mentions a possible civil lawsuit instead.

The letter said the city, during Mayor Jack Ellis' administration, told the federal government that "the city had spent the funds in accordance with the terms of the grant," but an investigation showed "all those certifications were false."

Ellis, who left office in December, said Monday he is confident the grant money was spent properly. He said federal investigators haven't spoken to him about the grant, and he's not worried about potential criminal repercussions. If there were problems with the spending, he said, they were the result of "more of some administrative errors here than any misuse ... of funds."

Reichert said he is scheduled to meet with Wood's office May 13 to discuss the allegations and a lower settlement payment, which the letter says Wood's office is "willing to discuss."

Federal law allows the government to reclaim three times the amount owed, plus penalties, according to the letter. Reichert said he still is trying to gather information on the matter and does not know whether any criminal charges could be forthcoming.

City Attorney Pope Langstaff said federal officials told him over the phone that "they were treating it as a civil matter at this point."

QUESTIONS HAVE LINGERED FOR YEARS The grant in question is a Safe Schools Initiative grant awarded in 2002, which is often referred to as a faith-based grant. The city, through the Macon Police Department, doled out money to already existing crime-prevention programs for youths, such as after-school programs. Of the $1 million grant, the federal government kept $100,000 for oversight, the city kept $170,000 to administer the program locally, and the remaining $730,000 was split among partnerships made up of dozens of churches and civic groups.

The program has been a target of federal investigators for several years. It also was examined during the Bibb County grand jury's investigation of city finances, which District Attorney Howard Simms handed off to the U.S. attorney's office in 2005.

Those inquiries generated numerous subpoenas and reams of documents, though little has been made public. In fact, the letter released by Reichert's office Monday is one of the few pieces of evidence from the past few years that a federal inquiry is ongoing. Wood and Assistant U.S. Attorney Donald Johstono wouldn't comment on the letter Monday or on any aspect of an investigation into city finances.

"At least for right now," Wood said. "Whether we'll get there or not, I just don't know."

Allegations in the U.S. attorney's letter jibe with what the local grand jury investigation found, Bibb County District Attorney Howard Simms said Monday. He also said the letter's threat of a civil suit doesn't necessarily preclude criminal charges. It also doesn't mean those charges will follow, but he said, "it doesn't sound very good, does it?"

COULD BE INNOCENT — OR SINISTER

According to the letter, the Department of Justice's Office of the Inspector General actually handled the investigation into the Safe Schools Initiative. But that office wouldn't comment on the letter, referring all questions to Wood's office.

Outside experts contacted by The Telegraph agreed with Simms' read of the situation: It's hard to say what the allegations could lead to.

Donnie Dixon, a former U.S. attorney in Georgia, said it's serious any time the U.S. attorney's office sends a letter. But University of Georgia law professor Tom Eaton said that since the letter only mentions a civil action, investigators have decided they don't have enough evidence to suspect criminal wrongdoing right now. That doesn't mean a criminal case won't be brought later, he said.

"These things can be as innocent as a misplaced decimal point or can be as sinister as intentionally (misusing funds)," said Eaton, who spoke only in general about federal investigations.

Ellis is the only city official named in the letter. But the program was operated by the police department under then-Police Chief Rodney Monroe, who left Macon to become chief of police in Richmond, Va. Monroe did not return Telegraph calls Monday, and he has not returned Telegraph calls seeking comment about this grant and the subsequent investigations since he moved to Richmond. He is now a finalist to be Charlotte, N.C.'s police chief, according to a report on the Richmond Times-Dispatch's Web site Monday.

Kelly High-Foster, a police department finance officer under Monroe, and Albert Stokes, who was the department's point man for the Safe Schools Initiative, also did not return calls Monday. Both Foster and Stokes went with Monroe to Richmond. Likewise, attempts to reach Norman Carter and Smyther Fallen, both of whom worked on the initiative for the city, were not successful Monday.

In 2006, Fallen told The Telegraph that the program was poorly run by the city, which didn't give grant recipients the assistance they needed to understand program rules. But he also said there was no abuse of government money.

ELLIS DEFENDS, COUNCIL REACTS

Monday, Ellis took up for administrators and area ministers involved in the program.

"I just don't believe that Rodney Monroe would have permitted any such things (as the letter alleges)," Ellis said. "And I definitely don't believe that any of the ministers who actually carried out the work. ... I'm sure that they didn't use this money for anything that it wasn't intended to be used for."

There may be some question whether the spending was properly documented, though, Ellis said. He said a federal audit conducted during his time in office found that "like $30,000 or $40,000" in expenditures needed more documentation than the churches and the department had provided.

"I'm sure (grant administrators and the ministers) did what was right or what they thought to be right at the time," Ellis said. "And I'm sure at the end of the day everything will work itself out. At least I'm hopeful."

The Telegraph attempted to reach several preachers involved in the program Monday, and spoke to two.

The Rev. Marshell Stenson, whose Bibb County Community Coalition received money, said he can't remember when he last spoke to federal investigators, but it was more than a year ago. He said he thought all the questions had been answered, and he is puzzled more have been raised.

"Last time I talked with the mayor — Jack Ellis — he said it was cleared up," Stenson said.

The Rev. Ronald Toney at Lizzie Chapel Baptist Church said Monday he was interviewed by the U.S. attorney's office and the investigator didn't have a problem with the program's accounting.

Other ministers, in past interviews, have said federal investigators contacted them for brief interviews and with requests for documents about the Safe Schools Initiative. And in the fall of 2006, the city was served at least two subpoenas seeking information about police department spending, including a demand for documentation of every purchase card transaction made by the department from June 2002 through July 2004.

City Council members have known for years that there were serious questions about city spending, and particularly its handling of this federal grant. Still, some of them expressed shock at seeing the letter's allegations in print, while others took an I-told-you-so stance.

"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."

"I've been warning about this for three years," Councilman Rick Hutto said, noting past audit reports had suggested accounting concerns with the city's law enforcement grants.

Ellis, who was in North Carolina on Monday campaigning for Democratic presidential candidate Sen. Barack Obama, discussed the situation in a telephone interview. His demeanor was calm, a far cry from the ex-mayor's past habit of calling out investigators and accusing them of targeting his administration unfairly.

Despite Simms' lengthy grand jury investigation and the ongoing federal inquiry, no one has been indicted at City Hall. Former Finance Director Kelly Clarke was pushed out of her job, and she was charged with conspiracy after a review of the city's books. That charge eventually was dropped.

"I am confident that every penny that we spent, every penny ... people did what they were supposed to do," Ellis said.

Telegraph staff photographer Beau Cabell contributed to this report.

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