David Johnson announces retirement from Chattanooga Neighborhood Enterprise

David Johnson announces retirement from Chattanooga Neighborhood Enterprise

October 27th, 2012 by Ellis Smith in Business Around the Region

David Johnson is retiring as president of the Chattanooga Neighborhood Enterprise and Chattanooga Community Development Financial Institution.

Photo by Staff File Photo/Times Free Press.

David Johnson retired Friday from Chattanooga Neighborhood Enterprise after four years as head of the taxpayer-supported nonprofit.

The announcement came less than two months after the Chattanooga Times Free Press first reported that a number of former employees had filed sexual and racial discrimination complaints against Johnson.

Johnson was hired in December 2008 as president and CEO of the agency, which seeks to help residents find affordable housing at below-market rates.

"It has been an honor to serve as the president and CEO of CNE for the past four years," Johnson said in a news release Friday.

Ric Ebersole, former CNE board chairman, will serve as interim president and CEO during a nationwide search for a new chief executive, the release stated.

During Johnson's tenure, the organization has refurbished homes and revitalized neighborhoods throughout the city, helped homeowners weatherize doors and windows and disbursed millions of dollars in federal aid.

CNE offered foreclosure prevention assistance to hundreds of families and helped prospective homebuyers secure low-interest loans.

"I am grateful that I was able to help move CNE forward in homeownership promotion and preservation, and in the revitalization of urban neighborhoods," Johnson said.

But former employees alleged and a city audit confirmed that there were "very serious" financial discrepancies under Johnson.

A group of ex-employees said in September that the organization paid kickbacks to contractors with taxpayer dollars and retaliated against whistleblowers.

An audit by the city's Department of Neighborhood Services and Community Development showed that CNE failed in many cases to secure permits or get inspections for its work, didn't provide evidence that it had properly procured contractors and didn't provide evidence that work actually had been completed.

Johnson also came under fire this year from a group of former workers who alleged that he engaged in sexual and racial discrimination, primarily against female and black employees. Johnson himself is black.

The ex-workers complained in lawsuits and federal discrimination complaints that Johnson and other officials retaliated against workers who complained about the sexual advances, or reported on financial improprieties.

Complaints dismissed

Johnson declined to comment, but spokesman Albert Waterhouse called the complaints into question.

"There is absolutely no basis in fact regarding these allegations and we are completely confident that with further review a court of law will also find these false and misleading charges are without merit," Waterhouse said.

Previous complaints have been dismissed, Waterhouse said, receiving "no cause" determinations from the Equal Employment Opportunity Commission.

Stephen Johnson, chairman of the board for CNE, said that though both city and CNE board officials reviewed allegations of financial wrongdoing, they could find no evidence to support claims of contractor kickbacks and other misuse of funds.

"Neither the city nor CNE could find any evidence of financial impropriety, mismanagement, fraud or abuse," Johnson said. "Despite our requests, none of the individuals who have made these allegations has come forward with any specific instances to support their claim."

Officials underscored that Johnson's departure Friday was a retirement, not a forced resignation.

Chattanooga Mayor Ron Littlefield praised Johnson's disbursement of $2.6 million in federal stimulus dollars.

"CNE worked quickly to execute the program, helping more than 650 struggling homeowners in Chattanooga and Hamilton County combat rising utility costs through a variety of weatherproofing techniques," Littlefield said.

Johnson positioned CNE as "a leader" in home preservation in Chattanooga, said Stephen Johnson.

"We are appreciative of his devotion to homeownership and urban housing renewal in our area, and we wish him the best in his retirement," Stephen Johnson said.