Lavish Spending, Little Reward

When the Department of Housing and Community Development gave him the training center grants in 1998, Prioleau and his wife, Elveta Martin, were coming out of personal bankruptcy, and a court trustee was investigating his transactions with his nonprofit organization. Later, several vendors sued his foundation over unpaid bills, and it was ordered in one case to pay about $237,000 to a computer firm.

In the meantime, Prioleau was failing to file tax returns for his nonprofit organization, records show. The most recent tax return on file is for 1997, according to the IRS. Prioleau said in interviews that his accountant failed to file the returns and other paperwork and said he went bankrupt because he invested his own money in his projects.

Still, millions of dollars in city money were flowing into his bank accounts. But the dollars were flowing out just as fast.

He had initial approval to spend $20,000 on one vehicle but spent $56,000 on two, even before the grant was finalized, to transport "125 students every 90 minutes," he explained later in a report.

He spent $6,000 on a rosewood credenza and matching desk. The elaborate conference table was accompanied by 20 chairs that cost $2,000 each.

Artist Raymond Karpuska, who drove his creations from Florida to Prioleau's door, said Prioleau sat down at the head of the table, admiring the work. "I remember him patting his hand on the table, saying, 'We are going to get the girls in here dancing on this,' " Karpuska said.

With the District's approval, Prioleau found other ways to pay himself and his family with public money.

In 2000, he paid his wife $6,875 for three months of work and years later tried to bill the city $4,500 to retain her law firm, records show. In 2004, he paid his teenage daughter $936 for "outreach." And for two years, Prioleau hired a second company he runs, paying it about $213,000 for consulting work to his nonprofit organization.

The company, FEI Enterprises Inc., had a similar name and shared offices with his nonprofit organization. Prioleau headed both and, at times, his wife and his brother were officers in both firms. He subcontracted the firm for services including such tasks as "test and reproduce charts and posters."

Officials at the Department of Employment Services, which administered the grant, said Prioleau was free to subcontract with companies of his choice, although they knew of no other grantees who had used this arrangement.

But Rick Cohen, executive director of the National Committee for Responsible Philanthropy, said after reviewing the records that "if it looks like self-dealing, it should not be done. Most nonprofits would not even contemplate anything like this."

One of Prioleau's most perplexing expenditures was his move to new offices in 2002.