D.C. police and the FBI are investigating allegations that thousands of dollars of federal funds given to the D.C. Coalition for the Homeless may have been misspent or improperly diverted to coalition officials and others, according to city and law enforcement officials.
Investigators are probing real estate transactions connected with the coalition's efforts to purchase shelter facilities throughout the city, as well as a $1,000 payment from a person doing business with the coalition to Dennis Bethea, a former coalition board member and former chief of the D.C. Office of Emergency Shelter and Support Services.
Bethea characterized the payment as a loan and said that the money came from an individual, whom he refused to identify, who was doing business with the coalition. He said that when coalition board members raised objections to the payment, he repaid the money.
Bethea said that he quit his posts with the coalition and the city for reasons of health, not because of any pressure to resign.
Investigators also are examining the coalition's payment of $21,000 to District police officer Vernell R. Tanner. The money was an advance payment for rent on a Northwest building that Tanner intended to purchase, but did not own.
Tanner, while declining to discuss specifics, said that he had done nothing illegal and will repay the coalition when agreement is reached on the money that he said is owed to him for expenses.
A D.C. police official said that police internal affairs investigators have uncovered evidence of inadequate controls and recordkeeping in the organization's handling of some of its grant monies from the federal government, which amounted to $3.7 million. The official said that the actions of federal officials also are being scrutinized.
The federal funds were given to the coalition, a private advocacy group for the homeless, last September to establish an emergency shelter for the homeless in Anacostia and set up smaller, more permanent shelter facilities around the District. Federal officials were seeking an alterntive to the downtown homeless shelter run by the Community for Creative Non-Violence, which they were seeking to close.
More criticism of the coalition's management of the Anacostia shelter surfaced last week after an employe of the coalition was arrested for allegedly assaulting a resident with a baseball bat. Police said they were investigating a series of reported assaults on shelter residents by staff members.
The employe arrested in the incident, who claimed that he acted in self-defense, had a lengthy criminal record. Police said they found that shelter officials did not screen prospective employes before hiring them.
Federal authorities, who late last week stepped up their investigation of the handling of the federal funds, have issued a subpoena for the coalition's records that one coalition member described as "extensive corporate economic data, from wage payments to all transactions."
Elisabeth Huguenin, president of the coalition, said that to the best of her knowledge, "The organization has not committed any crime of any kind . . . . If there has been any impropriety, it would have been by individuals acting individually and without my authorization or the authorization of the board."
Huguenin said that the FBI and the police discussed the investigation with her Thursday.
C. McClain Haddow, the former U.S. Department of Health and Human Services chief of staff who played a leading role in the government's efforts to establish the coalition as an alternative shelter organization, said that he had been concerned about the advocacy group's hiring practices and real estate deals.
"I had not heard any specific allegations with the land deals, but I heard they were dealing with their friends. Harvey Vieth [a former federal administrator for the homeless] came to me and said he thought there was enough here for us to cancel the grant," said Haddow, who left the government this year. "I warned them. I said, 'Don't let me hear back that you have sweetheart arrangements with friends or family members.' "
The Rev. Imagene Stewart, one of the coalition's seven board members, said that she was interviewed in mid-March by police internal affairs investigators, who she said questioned her about the coalition's real estate transaction with Tanner.
"They [the investigators] said that certain board members -- their friends -- were getting finders' fees for finding houses and they were taking that grant money that was supposed to be used for operating and buying [shelters]," she said.
Bethea said he knew Tanner before becoming the city's emergency shelter director in early 1985 and had "either abstained or voted against" all transactions proposed between the coalition and Tanner.
Bethea, who resigned his city job Jan. 29, said he needed the $1,000 loan because his brother was ill in New Jersey and Bethea was going through a "difficult time." He declined to say from whom he received the money, but said that it was not Tanner.
"There was no intent to do anything improper, although in hindsight it shouldn't have happened," Bethea said.
A source close to the coalition said that Bethea was asked to return the money because board members did not accept Bethea's description of it as a loan.
Lawrence Guyot, the coalition's treasurer and a $24,316-a-year volunteeer services coordinator with the D.C. Department of Human Services, said that the lease agreement with Tanner for a property at 1333 Emerson St. NW was "contingent upon Tanner's purchase" of the building.
Tanner had a contract to buy the property and there was no indication that he would not close the deal, Guyot said, adding that he had taken the lead in negotiating the lease with Tanner. Guyot said he proposed paying Tanner an additional $10,000 to assist him in closing the deal, and coalition records show a check was prepared, but the board rejected the proposal.
"There was no possible . . . fiscal irresponsibility" in the coalition's handling of the Tanner transaction or any other, Guyot said.
In addition to $21,000 paid to Tanner in October, the coalition spent $8,000 to repair the building, according to an internal memorandum. The coalition's attorney, James Edward Mercer, wrote a letter to Tanner dated March 4, demanding repayment of the $21,000.
Last Tuesday the coalition bought the Emerson Street building for $149,500, according to a coalition source. The building's previous owner said that he sold the property to the coalition after Tanner failed to obtain financing.
The coalition, which is scheduled to close the men's shelter in Anacostia on April 30, has bought four other sites to be used as permanent shelter facilities, according to federal sources. Of those properties, only one -- a women's shelter at 455-457 Florida Avenue, NW -- has been opened for operation.
Meanwhile, the CCNV shelter remained open through the winter, and last month the federal government agreed to give the group$5 million to renovate it, following a hunger strike by group spokesman Mitch Snyder.
The police investigation of funds given to the coalition was launched in response to a request from officials in the city's human services department, according to City Administrator Thomas Downs. Downs said the inquiry is continuing.