The U.S. Department of Labor ordered the District of Columbia yesterday to suspend all further federal funding of Youth Pride Inc., the self-help group under investigation by the U.S. Attorney's office.
The suspension, ordered in a telegram to the D.C. Labor Department, took effect Wednesday.It also forbide any new contracts with Youth Pride and calls for an expansion of a city audit of the organization.
"In order to protect the integrity of the funds and to ensure proper operation of the program . . . we hereby suspend as of Dec. 19, 1979, your authority to obligate any Ceta [Comprehensive Employment and Training Act] funds to Youth Pride Inc., without prior written approval from me." Labor Department Assistant Secretary Ernest Greene wrote to D.C. Labor Department head William Ford.
Green ordered Ford "to enter into no further contracts for subgrants and suspend all [Ceta] financial assistance with Youth Pride Inc., its affiliates or subsidiaries" with one exception:
Youth Pride will be permitted to spend whatever remains of $300,000 already granted for 1979 to provide job training to 390 youths from mixed-income backgrounds.
Robert T. Jones, a U.S. Labor Department administrator, said that Youth Pride would run out of that money about the end of February 1980, "by which time we hope to have resolved the matter."
The order suspended Youth Pride's $41,000 share of a $150,000 job placement program being carried out in conjunction with two other organizations. It also halted a proposed $86,000 computer training program for 1980.
In addition, Green yesterday ordered the District of Columbia Department of Labor, which has been the funnel for federal funds to Youth Pride since 1974, to expand its current audit of that organization "to include the period ending Sept. 30, 1979."
The audit, began about 10 days ago, now covers only a 1977 grant. It has been contracted out to an independent firm, Jack Martin and Co. of the District of Columbia.
Martin said yesterday that two to four of his auditors have been at Youth Pride daily and have thus far encountered no serious problems. The audit is expected to be completed by mid-February, he said.
Elijah Rogers, the city administrator, said last night that he will meet with Ford to consider action in response to Green's telegram.
These actions follow the publication last October of a series of articles in the Washington Post detailing the theft of at least $600,000 from the U.S. Department of Housing and Urban Development and low-income tenants by P. I. Properties, Inc., a real estate spinoff of Youth Pride, Inc.
Both firms are headed by Mary Treadwell. She has denied any wrong-doing.
The U.S. Labor Department has granted $21 million to Youth Pride since it began providing job training for disadvantaged youths in 1967.
The funding has continued unabated on an annual basis even though Labor Department audits questioned hundreds of thousands of dollars of Youth Pride Expenditures and sometimes found so many records missing that audits could not be conducted.
No audit of Youth Pride has been done since September 1976.
Earlier this month The Washington Post reported that Marjorie Fine Knowles, the Labor Department inspector general, had killed a proposed investigation of Youth Pride last June because it might be politically embarrassing to Mayor Marion S. Barry. That charge, from her former chief of audits, Gerald Peterson, was without merit, Knowles said.
Barry, who helped found Youth Pride; has said he severed connections with that organization in January 1975, and does not know Knowles, Barry and Treadwell were once married. No allegations have implicated the mayor in any way.
Following publication of the Post articles on P. I. Properties, the U.S. attorney's office began an investigation which it recently expanded to include Youth Pride.
Green said yesterday that he was motivated to order the suspension of Youth Pride funding because of this expanded investigation.