The Internal Revenue Service has demanded and carted off boxes of financial documents and inspected computer records related to the president of a subsidized apartment complex in Southeast Washington, according to a criminal summons and the building’s property manager.
In the summons, the IRS sought records regarding Park Southern Apartments, a sprawling complex along the District’s southern border. The complex became a focus of federal scrutiny after a Washington Post report detailed its dilapidated condition and the owner’s default on a $3 million city-backed loan.
The IRS demanded documents regarding Rowena Joyce Scott, a prominent Democratic organizer and the president of the nonprofit corporation that owns Park Southern. The agency also asked for documents related to several business and political associates of Scott’s, the church she founded and the Ward 8 Democrats, a political committee Scott led until recently.
The IRS declined to comment on the summons, and it remains unclear what the agency is investigating. The IRS summons, titled “In the matter of Rowena Joyce Scott,” includes the names of people and entities and indicates the types of records sought, but provides little other detail. A copy of the summons was provided to The Post by Chuck Moran, vice president of Vesta Corp., which the District hired on an emergency basis to manage the property this spring. Neither Scott nor her attorney returned calls or text messages seeking comment.
Park Southern’s troubles have spilled over into the November mayoral election because of Scott’s longtime involvement with the Democratic Party and because of the spotlight the issue has trained on the city’s struggle to provide quality affordable housing.
Scott’s very public switch of allegiance from Mayor Vincent C. Gray to D.C. Council member Muriel E. Bowser (Ward 4) in the Democratic primary has fueled accusations by one of Bowser’s general-election opponents. Council member David A. Catania (I-At Large) contends that Bowser, the Democratic nominee, has played down mismanagement at Park Southern to protect a political supporter. Catania also has repeatedly cited Park Southern when questioning Bowser’s oversight of affordable housing as a committee chairman.
Asked for comment about Bowser supporters’ being named in the summons, campaign spokesman Joaquin McPeek said Tuesday that “unlike Mr. Catania,” Bowser was not politicizing the developments related to Park Southern.
Catania’s campaign manager, Ben Young, responded: “No comment; no comment necessary.”
Moran, the city-appointed property manager, said IRS agents have visited Park Southern twice, last month and again last week. They inspected and removed many of the paper records that were in the management office when Vesta took control of the property, he said. Agents also inspected computers that were on site when Vesta came in.
Moran said the volume of records taken was “significant.”
Since 2007, Scott has been president of the board with ultimate responsibility for Park Southern. The complex has fallen more than $700,000 behind on a city-backed mortgage and failed to pay about $560,000 in delinquent utility bills — while collecting millions of dollars in rental payments from its low-income residents.
The District seized control of the property in June, and this month officials asked a judge to oversee what would be an unprecedented court-supervised sale of the affordable-housing complex, which has more than 700 residents.
The property is plagued by a leaking roof, crumbling pipes, poor ventilation, mold and rodent infestations. Its troubles have sparked a larger conversation about the city’s affordable housing problem.
The situation has also put Bowser on the defensive over her campaign’s connections to Scott and Scott’s former property manager at Park Southern, Phinis Jones. Jones is among the people the IRS is seeking information about, according to the summons.
Jones, his Capitol Services Management and other companies he controls have contributed a total of $20,000 to Bowser’s campaign, and he helped organize her fundraising and political activities before the primary in the District’s working-class wards east of the Anacostia River.
A call to Jones was returned by his attorney, Donald Temple, who said the summons makes clear that Scott, not Jones, is the focus of the investigation. “This has nothing to do with any impropriety on the part of Phinis Jones,” Temple said. “This investigation does not affect Phinis Jones.”
Temple said that to his knowledge, neither Jones nor any of the companies in which he has a controlling interest have received similar requests for information.
Scott switched sides in the primary campaign as the Gray administration’s housing department was pushing her to clean up Park Southern. Then, she attempted to sell the property to Jones for a fraction of its assessed value, city officials contend.
A month after winning the primary, Bowser attempted to arrange a meeting of Scott and Jones with city housing officials. Gray aides refused Bowser’s request to meet with Scott and Jones, saying it could compromise potential legal actions. Gray’s administration ultimately halted the attempted sale.
Scott has repeatedly said she is the victim of political retribution by Gray for backing Bowser.
In his statement Tuesday, McPeek, the Bowser campaign spokesman, said Bowser supports the city’s forced sale of the property. He also said Bowser had “completely removed mayoral politics from the Park Southern issue” by asking the city’s inspector general to pursue any malfeasance.
In court documents, the District has alleged that as Park Southern deteriorated under Scott’s leadership, she increased spending on staff by 500 percent, racked up tens of thousands of dollars in questionable travel expenses, and let herself, her daughter and close associates live at the complex rent-free.
Tax filings by the Park Southern Neighborhood Corp. back up many of those contentions, showing major swings in spending on staff, office supplies, travel and other costs after Scott took over as president.
Scott is also fighting an attempt by the city and its new property manager to evict her on grounds that she never paid to live at the complex and owes $57,000 in back rent. Her defense rests largely on a claim that Jones remembers seeing a document years ago indicating that as a resident manager, she was not required to pay.
Scott converted the building’s community room into a sanctuary for a church she started: Inspired By GOD Fellowship Ministry. The IRS is seeking documents related to the organization. The church was registered with the city in 2010, and the IRS lists it as a nonprofit group as of 2013. But a record search failed to turn up a Form 990, a document that tax-exempt nonprofit organizations are required to file with the IRS.
The church’s registered address is Scott’s apartment at Park Southern. In June, the church hosted a “summer revival” at Imagine Southeast Public Charter School. The property was redeveloped by Jones and was the site of Bowser’s primary victory party.