Profiting from a non-profit Fair Chance: The aim may be noble, but convoluted East Baltimore deal stinks.

July 20, 1996

BECAUSE THE GOAL of a job training program for East Baltimore youths is noble, the public apparently is supposed to ignore the oily smell of greased palms that surrounds it.

People should take notice. They need to see the political entanglements and the organizations that use the curtain of "non-profit" status to obscure who's making money. Specifically, they need to look at the East Baltimore Community Corp.

City Council President Lawrence A. Bell III, who hasn't been winning a lot of friends in East Baltimore of late, did the right thing when he tried to block a $31,400 payment to a program called The Chance, for socially deprived children in that community. Despite Mr. Bell's protests, the Board of Estimates approved the expenditure Wednesday. But this deal stinks.

The Chance is run by Fair Chance Inc., which wants to move to new quarters. That sounds fine until you realize Fair Chance wants to rent space in a building managed by East Baltimore Community Corp., which leases the building from East Baltimore Enterprises Inc., whose sole stockholder is Fair Chance. So, the city is paying Fair Chance $31,400 to help it move into a building that Fair Chance owns.

The plot thickens with the revelation that East Baltimore Community Corp., which gets the rent from Fair Chance, has on its board 2nd District City Council members Paula Johnson Branch and Robert L. Douglass. Ms. Branch contends there's no problem with these entanglements because the organizations involved are non-profits and no one benefits financially from such transactions.

That's not true. These non-profits and others that often come to city government with funding requests have jobs, some of them well-paying, that are used as extensions of the political patronage system. To suggest that there's no profit in working for a government-dependent non-profit is ludicrous.

These groups do good work. But that doesn't mean they should be exempt from the scrutiny that ensures public funds they receive are wisely spent. An opinion from the city solicitor says Fair Chance should only use the $31,400 to pay expenses of The Chance program. But that's still an indirect subsidy of the rent Fair Chance is charging itself through East Baltimore Community Corp. It's a sham. The city's taxpayers are being taken to the cleaner.

Pub Date: 7/20/96

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