Bell aims to block program's funding Council president calls Fair Chance deal ethically questionable

July 17, 1996|By Robert Guy Matthews | Robert Guy Matthews,SUN STAFF

City Council President Lawrence A. Bell III hopes to block a $31,400 city payment to an East Baltimore organization that he says is involved in an ethically questionable real estate deal with two other closely connected groups.

Bell said that today he will ask the Board of Estimates to at least delay payment to a program for socially deprived children called The Chance, run by Fair Chance Inc. An aim of the program is to teach job skills to the youths.

Bell said he is troubled because Fair Chance appears to be paying the money it receives from the city indirectly to a company that Fair Chance owns.

Fair Chance plans to rent space at 301 N. Gay St. from East Baltimore Community Corp., which in turn leases the space from East Baltimore Enterprises Inc. Fair Chance is the sole stockholder of East Baltimore Enterprises. The three organizations have overlapping directorships.

The $31,000 payment, the first of its kind to Fair Chance, would cover moving expenses and the higher rent The Chance program would pay when it moves into Gay Street.

"My concern is about the issue of the city paying the moving expenses and the increase in rent when Fair Chance is the sole stockholder of East Baltimore Enterprises," Bell said.

Bell said his concern is increased by the fact that two 2nd District council members, Paula Johnson Branch and Robert L. Douglass, are members of the board of East Baltimore Community Corp.

Attempts to reach officials of the groups were unsuccessful. Marie Washington, the paid director of East Baltimore Community Corp. and a member of the two other boards, was said to be away for the week on business. The three groups share the same address, 1235 E. Monument St., according to state records. It is not known what rent Fair Chance now pays.

Four of the five directors of East Baltimore Enterprises are also directors of Fair Chance. One of those four directors, William Jackson, is a director of East Baltimore Community Corp. as well.

Branch said no one can benefit financially from the real estate deal because the organizations are nonprofits. East Baltimore Enterprises is not a nonprofit, but any profit the organization derives goes into Fair Chance, which is nonprofit, according to the City Solicitor's Office.

"This is witch-hunting," said Branch, who believes that Bell is unfairly branding the organizations as unscrupulous.

City attorneys launched their own inquiry in February after the $31,400 payment was first presented to the Board of Estimates by the mayor's Office of Employment Development.

In an internal memo last month, department attorneys concluded that "no person appears to be able to derive personal benefits from [the deal], and documentation reveals nothing illegal that would prevent the City from entering into the Agreement."

However, the memo did say that the agreement should be monitored carefully so that "the funds provided are used to pay for the expenses of 'The Chance' program."

On June 26, the five-member board approved the payment, with Bell voting with the majority. Bell said he later changed his mind after learning more details about the agreement. At its last meeting, the board delayed payment at Bell's urging.

Today, Bell said, "We may either hold it for another week or move to reconsider the vote."

Pub Date: 7/17/96

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