published Saturday, July 16th, 2011

HUD asks for tally of grant money

by Cliff Hightower
Sherrie Gilchrist is the executive director of the Tennessee Multicultural Chamber of Commerce.
Sherrie Gilchrist is the executive director of the Tennessee Multicultural Chamber of Commerce.
Photo by Tim Barber /Chattanooga Times Free Press.
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• $4.4 million: Total amount expected to support the construction of a Business Solutions Center

• $3.6 million: Amount of cash the Tennessee Multicultural Chamber of Commerce said it would raise in addition to federal grant funds

• $545,000: Amount of grant to Multicultural Chamber from the U.S. Department of Housing and Urban Development

• $306,400: Amount of money used to purchase land for Business Solutions Center and for planning and project development

• $238,600: Total amount of HUD money unaccounted for in construction of Business Solutions Center

Source: Chattanooga

The U.S. Department of Housing and Urban Development wants to know what happened to $545,000 it gave to the Tennessee Multicultural Chamber of Commerce for a new business center that never materialized.

The department is sending a letter of inquiry into the matter to the Chamber and it expects documentation on how and where the money has been spent, a HUD official said Friday.

“HUD will issue a written inquiry directly to the grantee asking for a response to the audit and any other issues as may be identified by HUD,” HUD spokesman Joe Phillips wrote in an email. “That request will require the grantee to submit source documents [bills, invoices, etc.] to support the expenditure of grant funds as well as additional information.”

Phillips said the Chamber would have 15 days to submit the information. He gave no indication whether the letter had been sent.

“Any subsequent actions would depend upon HUD’s review of the grantee’s response,” he said.

Richard Beeland, spokesman for Mayor Ron Littlefield, said Friday the administration expected the HUD response.

“And I’m sure there will be additional questions,” he said.

Council Chairwoman Pam Ladd said she also was concerned after hearing the latest developments.

“Maybe the wound is deeper than we realized,” she said.

Chamber Executive Director Sherrie Gilchrist and board member John Taylor did not respond to calls Friday.

The Chamber has been under fire this week after City Auditor Stan Sewell released a review of the organization that questioned the group’s business practices, financial management, high salaries, large travel expense budgets and expenditures. Among those were the purchase of five pieces of property along M.L. King Boulevard to build a Business Solutions Center that has yet to happen.

HUD money paid $200,000 for three of those properties, according to the review, while $106,400 in HUD money went for planning and project development. The remaining $238,600 in HUD money is unaccounted for, the review states.

According to the Chamber’s annual financial statements from 2006 and 2008, the completion date for the business center originally was set for June 2008, but each year it was pushed back by 12 months until 2009, when the Chamber didn’t mention it at all in its statement.

Sewell’s review also posed 18 questions about the expenditures of the Chamber. City Council members have said they want those questions answered, along with an internal audit by the Chamber. The deadline for the answers to the questions is Monday, city officials said.

City Councilman Russell Gilbert said Friday the inquiry does not change his opinion of what is needed from the Chamber.

“I want them to come to us and answer the questions,” he said.

Some other points made by Phillips about the HUD grant are:

• The Chamber was required to file semiannual and annual reports and HUD is reviewing the reports on file.

• If the initial inquiry shows any instance of waste, fraud or abuse, HUD would refer the case to its Office of the Inspector General and the HUD Enforcement Center. Based upon their investigations, the case could then be referred to the U.S. Department of Justice.

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328Kwebsite said...

The City Council still owes us an explanation for the $328,000 website political handout to a design firm with ties to former Chattanooga Mayor Kinsey.

Who gets internal audits done between Thursday and Monday?

Does the City?

They still have not answered how it is they plan to use $60,000 in Federal stimulus grants for broadband development on a sole-source, no bid contract inside the United States for the purchase of a website.

If you want to see some federal laws violated, just read that description of the City Council's activities again. Maybe we should call the GAO's Inspector General for an audit of their practices.

Unlike the Multicultural Chamber of Commerce's small business bookkeeping questions, we have generous observation of the City Council's blatant wrongdoing.

If City Auditor Stan Sewell wants to understand just how much we understand the level and intensity of BS in his claims, have him look up the Hamilton County Property Assessor's Office website. Look at the differences between assessed and auctioned values of commercial properties at comparable parcels to these, questioned above.

Look at the $2000 sale price some of them receive.

Look at the $1500 assessment some of them receive, followed by auction closings of $65,000 or more.

Let us look at the $10 Million dollar exception warning in the City of Chattanooga budget which specifically tells everyone who reads it that the concept of "liability" was arbitrarily redefined by Mayor Littlefield.

In all of my years working as a Federal Officer, including those times with warrants for contracting and their associated audits, I never have seen a budget or spending plan with a warning about how the definition of money had been changed to meet the needs of an executive.

It doesn't happen to the tune of $10 Million dollars in "redefining" money, especially in proportion to a budget like the City of Chattanooga's.

The City's budget carries just such a warning. Let City Auditor Stan Sewell explain to us the value of $10 Million in fictions.

Want an audit? Send them your documents, Chattanooga. I'm sure accountants everywhere will find those entertaining.

We all know Mayor Littlefield and his cronies make money off of land deals. We are aware that the Chamber of Commerce is a Karl Rove instrument, which is locally threatened by a small group of minorities who are operating a pro-business nonprofit. We can see that some Republicans want to crush them.

If the City Auditor's office was interested in supporting business, they could have long since provided bookkeeping help. Instead, they let these problems fester until publicly blaming someone was politically convenient.

There's a CPA around here somewhere, not on Littlefield's payroll, who can help us sort this out the right way.

July 16, 2011 at 12:42 a.m.
328Kwebsite said...

If you want to get an understanding of just how illegal the City Council's own financial actions were with that website deal, consider this:

Even inside Iraq, Afghanistan or any other war zone worldwide, if you are spending Federal dollars on a contract, you need to take bids. No exceptions.

I was on one contracting negotiation, and a guy threatened to cut my head off. I still had to take bids! I threw him in jail, but I still had to take bids. These were Federal tax dollars at stake.

In order to prove that only one bidder is lawful, you have to prove, in writing, during an audit, that only one vendor was available to complete the job.

That's the standard for war zones.

Let us laugh at the idea of sole-source, no-bid federal contracts for common business and consumer items inside the United States.

Sole source contracts are rarely awarded on a no-bid basis in markets with reasonable competitiveness.

The City of Chattanooga takes bids on sewer sucker trucks, but not on $328,000 websites.

Let me ask you: do you think that there is anyone else in this area who can design a website for the City of Chattanooga besides the people who got the $328,000 worth of approvals?

$60,000 of the money will be tied to federal funds, and the laws which regulate their distribution.

You can't just give thousands of tax dollars to political friends and not expect to get audited by someone.

The City Council, the City of Chattanooga's government, who did all that are the people who are telling you that a small business, with probably fewer than 20 employees, is mis-managing your money. I wonder how many similar size businesses in this area could withstand similar pressure for immediate accounting disclosures?

Could your auto mechanic? Your fruit stand vendor? Your hairdresser, even if she was from Soddy-Daisy? Your real estate agent, even if he was the mayor?

Do these outrageous directives from the City sound even remotely fair? Is there anyone of us who could be prepared for an audit before Monday? Let's hear City Auditor Sewell himself dare to have what's within his scope of responsibility prepared for audit by Monday. Lead the way, City Auditor! Let's see how it's done.

Chattanooga can start leading the way on fair and open financial matters any time. One big leap forward would be with elections, budgets with reasonable tax collection plans, new appointee pay controls, and maybe trying to be at least remotely fair in dealing with others.

July 16, 2011 at 1:18 a.m.
librul said...

Good one 328K !!!

July 16, 2011 at 1:40 a.m.
harrystatel said...

"Council Chairwoman Pam Ladd said she also was concerned after hearing the latest developments.

“Maybe the wound is deeper than we realized,” she said."

Brilliant deduction, Pam Ladd. Great oversight in protecting taxpayer's money.

It's easy to see why you're Chattanooga City Council Chairwoman leading the rest of the Know-Nothings on Lindsay Street.

Either you're blind, ignorant, or complicit along with the rest of the council pirates.

Are you in the real estate business with Littlefield and Gilchrist?

July 16, 2011 at 7:16 a.m.
fairmon said...

I have for a long time suggested citizens demand an independent financial audit of city financial dealings. in addition there should be an independent wage and benefits survey with government employee compensation adjusted to that of the private sector for like work. If the growth the mayor and council say is occurring then a tax increase should not have been necessary. Organic growth should increase revenue sufficient to provide services the city charter specifies.

What does the cost benefit analysis show for the web site investment? The philosophical and speculative justification is not sufficient to justify spending tax dollars.

July 16, 2011 at 9:14 a.m.
cinderella said...

The mayor hired the auditor, created an auditing department full of staff. Why? Oh to keep checks and balances in place for our City, because there was corruption going on. There were shocking findings,one adminstrator(political opponent of Littlefield)was charged with count after count of theft and has yet to be tried. A few others theft of $1,000.00, $500.00 here, there, etc(not that that's ok)but if the focus is on petty stuff, then we don't see the REAL theft of tax dollars - ex: Farmers Market hundreds of thousands of dollars. In 2008 Leamon Pierce discovered that per city charter the auditor position was to be hired by and supervised by City Council. They mayor wanted to share the auditor and found it insulting that his office could hold some influence on said position. He & some city council even tried to change the charter at election time.A compromise was struck and an auditing committee was to be created overseen by city council- Where is that committee now? ( I tried to find similar article on TFP but nothing - different editor back then.) The city audit on TMCC happened ONLY after TFP article was published. Go on TFP dig deeper, look at all the previous city audits and see if there is a back story. Bet you will find one everytime. The city auditor works for the mayor.

July 16, 2011 at 9:51 a.m.

I will continute to maintain that littleman is hiding some evil deeds that are about to surface and he's making an attempt to take the HEAT off his back-end. He is afterall an expert at that, even though a poor excuse as a politician. Am not supporting Gilchrist but the timing for the audit seems very questionable and rather speedy. Anyone who reads or knows even half the stuff about Chattanooga politics, should become aware that most anything can happen anytime. These good old boys do slip up often and when they do, they really scramble to cover up their do-do.

July 16, 2011 at 11:02 a.m.
thedeltajew said...

sherries house is starting to fall!sherrie you cannot stay silent forever cause big hud is call'in!!!

July 16, 2011 at 2:03 p.m.
01centare said...

Hopefully, Ms. Gilchrist and the others can explain themselves. If any part of these suspicions are true this is a slap in the face to all citizens of Chattanooga, but especially to fellow African-Americans who have worked so hard over the years to shake the shackles of a troubled past and worked hard and did things the right and honorable way. These people do not represent the African-American community. They'd exploit their own for self gratification. It's situations like this others will try to use a broad paintbrush to paint the entire African-American community. If true, all involved should be ashame, and held accountable for their misdeeds.

July 16, 2011 at 6:48 p.m.
chet123 said...



July 18, 2011 at 11:38 a.m.
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