D.C. officials vow to investigate AIDS groups' spending

Mayor Adrian Fenty and Attorney General Peter Nickles say the District will investigate AIDS groups that received city grant money.
Mayor Adrian Fenty and Attorney General Peter Nickles say the District will investigate AIDS groups that received city grant money. (2007 Photo By James M. Thresher/the Washington Post)
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By Debbie Cenziper and Nikita Stewart
Washington Post Staff Writers
Tuesday, October 20, 2009

Calling the squandering of city AIDS dollars "inexcusably wrong," D.C. Mayor Adrian M. Fenty and D.C. Attorney General Peter Nickles on Monday announced an investigation into nonprofit groups that might have misspent government money meant to care for the sick.

Fenty (D) said the District had failed to quickly root out waste and abuse among AIDS groups, which receive grants from the D.C. Health Department's HIV/AIDS Administration.

Flanked by D.C. Council member David A. Catania (I-At Large) and the city's top AIDS leaders, Fenty said that although many of the problems predated his administration, the government must be held accountable.

"Blame me as the mayor of the District of Columbia," Fenty said during a news conference at the Health Department. "We probably did not move fast enough to get at some of those inexcusable management deficiencies."

Fenty, however, said that many of the most troubled groups are no longer doing business with the city. He also praised the HIV/AIDS Administration, the steward of the city's AIDS dollars, which he said has taken steps in recent years to provide better oversight of AIDS groups.

The agency's director, Dr. Shannon L. Hader, who took over in October 2007, is training staff and building a data system that will allow the city to make strategic decisions on where to put its money. Only groups with a proven track record will receive funds, the mayor said.

"What you have seen," Fenty said, "is a completely systemic turnaround."

The city's announcement came after a 10-month Washington Post investigation, published this week, that found the city has paid more than $25 million in recent years to small nonprofit agencies marked by questionable spending, a lack of clients, lapses in record-keeping and other problems. One dollar of every three went to groups with identified deficiencies.

The FBI launched an investigation of city AIDS funding in December 2006, and the case is still active, an FBI supervisor said.

Nickles said he will work with the D.C. inspector general and the FBI if needed to probe the spending of AIDS groups. He said he will give priority to organizations that are still receiving city grant dollars, including the nonprofit Miracle Hands, which was awarded about $4.5 million between 2004 and 2008, including more than $400,000 for a job-training center that never opened.

Miracle Hands officials have said they ran out of money to complete the work.

Nickles said he might try to recoup money from some groups and could potentially pursue criminal charges. He would not name the groups he planned to target.

"Awful easy to talk about fraud and abuse. Much more difficult to do something about it," Nickles said. "I'm going to do something about it."

The Post found that in one case the city awarded more than $1 million to an AIDS housing program that allowed its ailing boarders to sometimes live without electricity, gas or food. More than $500,000 was awarded to a housing program whose executive director had convictions for theft, drugs and forgery. Twice, the inspector general could find no evidence that the director was operating an AIDS group.

Some AIDS groups failed to file tax returns or obtain a business license from the city, The Post found. Others submitted employee résumés with false information.

The monitoring of the money fell short, with city inspections that were cursory and often done by phone. Even when problems were noted, troubled groups continued to receive grant money.

It happened in a city with the highest rate of AIDS cases in the nation. More than 15,000 people have HIV or AIDS in the District, 3 percent of the population older than 12.

Catania, who in recent years has held public hearings criticizing the HIV/AIDS Administration for lapses in oversight, also called for an investigation.

"No one feared stealing," he said. "No one feared robbing us blind -- and so they did."

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