"Fact Checking the Lee Email, Part 2: The Grants" by Politics Blog | Jackson Free Press | Jackson, MS

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Fact Checking the Lee Email, Part 2: The Grants

We're trying to find the context of the $294,000/grant accusation in the email the Lee campaign sent out, but wouldn't document. We found the 2008 Clarion-Ledger story that the Lee campaign cited, as well as stories in the JFP. First, the Ledger story.

It was about then-Mayor Melton's abysmal financial management. It mentions the administration's complaints about problems left over from Johnson--which I personally take with a grain of salt until I find out the context. Because if there was anybody who could blame anyone but themselves, it was the Melton administration. Here's the relevant part of the story, "City not responding to suggestions":

"An employee hired by Mayor Frank Melton to assess Jackson's fiscal situation says she is fed up with Melton and his department heads for not responding to her recommendations to fix the city's bookkeeping problems. Assistant Chief Administrative Officer Valerie Nevels, a former Internal Revenue Service criminal investigator, said the mayor has not reinforced her suggestions. ...Nevels outlined to the City Council Budget Committee and various department heads a recent audit of city finances. She said it indicated sloppy accounting has left the city at risk of losing millions in federal funds and blurred its financial condition. The audit examined records from Oct. 1, 2005, to Sept. 30, 2006. To improve financial management in the city, Nevels has tried training personnel in such areas as filing quarterly reviews, balancing accounts monthly and setting firm deadlines for purchases and transfers. But employees have ignored the procedures and guidelines she passed out Oct. 1, she said. Nevels said Melton's response was for her to "make it happen." ...

...Melton and Walker said the city's poor accounting practices are left over from previous administrations. Nevels concurred, saying that during former Mayor Harvey Johnson Jr.'s administration, the city had more people working on financial statements and grants but the same problems existed. Johnson, mayor from 1997-2005, said his administration "took great pains to make sure the financial system was adequate. Johnson said that in his last year as mayor the city's bond rating was increased twice. Despite his efforts, Johnson's administration left behind some mismanaged grants, which the current administration and council had to deal with last fall. The city had to repay more than $294,000 on a grant because the grant was not spent in the required time period. Another $29,412 had to be repaid for the same period. "Clearly (Johnson) didn't walk away from this enterprise with clean hands, nor is the Melton administration going to walk away with clean hands," council President Leslie Burl McLemore said.

I vaguely remembered this controversy because it surprised us that a Melton hire was whistle-blowing on him. So I searched our database and found these stories about the problems that Nevel revealed: No Oversight Costing City Nobody Minding the Store

Adam Lynch also reported on Johnson and grants in this story right after he returned to office.

Although all of those stories bring back painful Melton-era memories about his refusal to take care of business, the "Minding the Store" article is the most relevant to the Lee accusation. It beings:

The Jackson City Council grudgingly approved about $45,000 of payments to the U.S. Treasury Department Tuesday after the city failed to manage two federal law-enforcement grants. The council voted 6-0, with Ward 3 Councilman Kenneth Stokes absent, approving a $40,394 payment to the U.S. Treasury Department because the city misspent money from a 2004 local law-enforcement grant, and another $4,687 repayment of a 2002 local law-enforcement grant. The action increased the city claims docket from $2,304,563 to $2,349,645.

Jackson Assistant Chief Administrative Officer Valerie Nevels told the council during a Monday budget meeting that the city has utterly lost track of its state and federal grants. Nevels' report was a sobering follow-up to her March 31 presentation on the city's inability to manage grant money.

"[N]obody is minding the store," Nevels told the council on Monday, inciting discomfort and trepidation among council members.

Nevels explained that the city has no centralized system for keeping track of grants for which the city has applied. To make matters worse, the steady loss of personnel, coupled with administrators' inability to debrief exiting staff who are working the grants, assures that grant money lies in limbo for months at a time, or risk being overspent. According to Nevels, former employees may even vacate their office without informing superiors which grants are still active and where the files are.

Most grants secured by the city must be spent for specific projects, such as hiring more police officers or purchasing equipment. The city must prove to grant suppliers that it is both spending the money and doing so on the designated project. However, the city has been leaving oversight to an uncommitted number of people—usually the same person who applied for the grant.

Nevels gave a PowerPoint presentation to the council revealing how the city is not following existing policies and procedures, that it is not training employees charged to deal with grants, and that it is failing to keep up with grant compliance and expense tracking.

The issue has been brewing for months. Nevels told the council that external auditors had criticized the city as far back as 2002 for not having a city-wide grant management system and for its failure to "file for grant reimbursements on a timely basis." In fiscal-year 2004, auditors noted the city's penchant for over-reporting federal grant expenditures, and cited the city for "failure to follow established procedures as required by the Davis Bacon Act."

The city established the External Funds Monitoring Unit in 2005 to monitor federal and state money coming in, but was still falling short of providing adequate grant oversight under the Melton administration in 2006, Nevels said.

Former Mayor Harvey Johnson Jr., said he had established an Office of Grants Management during his first year of office, and did not recall any citation regarding the city's procedural failures regarding the Davis Bacon Act.

None of this accurately explains what the Lee campaign was talking about, but at least it gives some context to why these articles were written in 2008. Will add more information if/as I get it.

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May 2, 2013 | 3 comments

Lee and Johnson At It Again

By Tyler Cleveland

You knew we weren't going to make it through two days in a row without more sniping between Jackson's incumbent mayor Harvey Johnson, Jr. and challenger Jonathan Lee.

On Wednesday, the Lee campaign circulated an e-mail declaring Jonathan the "hands-down winner" of Tuesday's night's debate, then made these charges against the Mayor:

  • During his first two terms The City of Jackson was investigated for mismanaging $519,000 worth of federally funded grants.

  • In 2008 The City of Jackson was forced to "repay more than $294,000 on a grant because the grant was not spent in the required time period. Another $29,412 had to be repaid for the same period." (Clarion Ledger, January 28, 2008) Again, an investigation that came as a result of the mismanagement of federally funded grants during Mayor Johnson's first two terms.

  • It's taken 10 years to even begin repairs on Fortification Street (the City received $6.3 million to make improvements to Fortification Street in 2002). The Fortification Street project began in July 2012--approximately 10 months before Election Day, May 7, 2013.

The second accusation against Johnson over the $294,000 left on the table is accurate, according to a story the Clarion Ledger's archive. The story is about the money mismanagement of the Frank Melton administration, but mentions that many of the problems that mayor had were systemic from the Johnson years. It was an error that happened under Johnson that cost the city the grant money.

The e-mail went on to say that Johnson received $13,750 in campaign contributions from a prominent law firm, which was in turn "awarded" $170,000 worth of work as a part of the Siemens deal with the city to repair water infrastructure and another, who gave $16,500 in 2009, was given $100,000 for work in the Siemens deal.

The JFP is in the process of trying to procure a copy of Johnson's campaign finance reports from 2009.

Johnson's campaign issued this response around 4 p.m. Thursday afternoon:

"It’s come to our attention that once again… Jonathan Lee is using deception and lies in an attempt to mislead the public. He recently released information about our record that is false and taken out of context.

"Instead of telling half truths about our campaign, Mr. Lee needs to focus on his own finances. The fact of the matter is Mr. Lee has had four default judgments entered against his business. And, he deliberately misled the public when he touted that he was a business owner. In fact, he mentioned it during his commercials, on his website, and through social media. The fact is, while he was in charge of his family business, Jonathan Lee ran it into the ground. Eventually, vendors had to file lawsuits, obtaining default judgments of more than $150,000, in order to recover the money that Mr. Lee’s company owed them. When the media found out about Mr. Lee’s mismanagement of his second generation company, Mr. Lee suddenly announced that he never ...

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