Tennessee Multicultural Chamber says money checks out

Tennessee Multicultural Chamber says money checks out

September 27th, 2011 by Cliff Hightower in News

Walter Hitchcock, chairman of the board of directors for the Tennessee Multicultural Chamber of Commerce, answers questions at a news conference Monday.

Photo by Tim Barber /Times Free Press.

The Tennessee Multicultural Chamber of Commerce accepted the resignation of former Executive Director Sherrie Gilchrist and answered all questions from federal authorities about its finances, the board's chairman said Monday.

"We hope the investigation will wrap up soon and our name is cleared," said Walter Hitchcock, board chairman for the chamber, whose primary goal is helping to grow minority businesses.

Hitchcock told reporters during a news conference that chamber board members sat down with an FBI investigator and a U.S. Housing of Urban Development investigator for three hours and explained how all the money was spent from a federal loan and grant. He didn't say when they had spoken with the investigators.

In this file photo, Tennessee Multicultural Chamber of Commerce Executive Director Sherrie Gilchrist is seen during a business panel at the Chattanooga Times Free Press.

In this file photo, Tennessee Multicultural Chamber of...

Photo by John Rawlston /Times Free Press.

Board members also accepted the resignation of Gilchrist, who was the executive director of the organization since it opened in July 1999. A severance package has been promised to Gilchrist, he said. However, he would not elaborate on details of the package, saying it was a personnel matter.

Gilchrist was not forced out of her position, he said, but at the same time, there was some agreement between the board and Gilchrist that she should leave.

"Sometimes it's best to part ways and move on," Hitchcock said.

A second chamber employee also resigned. The organization is running daily operations with three volunteers instead of two full-time employees, he said. The chamber is searching for a volunteer interim executive director, Hitchcock said.

The organization also cut costs by moving from its $47,000-a-year office on Chestnut Street to an old school on South Highland Park Avenue that it is using for free.

"We've got to trim down to our fighting weight, get down to our lowest cost of operations and we're going to survive," board member Jerry Hanner Sr. said.

Hitchcock and Hanner led a nearly hourlong news conference in the chamber's new offices in the Hemlock School.

The chamber has been under scrutiny since early summer when a Chattanooga Times Free Press investigation showed inconsistencies between Chattanooga and Hamilton County budget documents. A city audit also questioned the chamber's management of city, state and federal funds. The FBI and HUD later stepped in to investigate the spending of a $545,000 HUD grant and $579,000 loan from the Chattanooga Community Development Financial Institution.

Multiple vacant lots are photographed Wednesday in the 400 block of MLK Blvd., leading up to the former Renewal Barber Shop at 423 MLK Blvd., seen in the background.

Multiple vacant lots are photographed Wednesday in the...

Photo by John Rawlston /Times Free Press.

The chamber bought two properties on M.L. King Boulevard with money from the Chattanooga Community Development Financial Institution. After not receiving regular payments on the loan, the institution foreclosed on the properties and is set to auction them off next week.

Hitchcock did not give details of how HUD and CCDFI money was spent, citing the ongoing investigations. He said the information was provided to investigators.

"I'm not saying there is a mismanagement of funds," Hitchcock said. "All monies have been accounted for."

Because of the financial discrepancies, the Chattanooga City Council and the Hamilton County Commission withdrew their $75,000-a-year contributions to the multicultural chamber.

The chamber is trying to assess its membership and its budget, Hitchcock said, but would not provide any details at this time.

He reiterated that the organization does not plan on folding. The Chattanooga-Hamilton County Chamber of Commerce could take on some of the responsibility of dealing with smaller minority businesses within the community.

He also said he thinks at some point city and county relations could unfreeze and funding could be restored.

Chattanooga City Council Chairwoman Pam Ladd could not be reached for comment Monday.

Hamilton County Commission Chairman Larry Henry said he is open for any discussions, but said he did not think the county would "ever get back to the point" of funding the multicultural chamber."

"It's really put a bad taste in our mouths," Henry said. "I'm not totally convinced we need two chambers."

Staff writer Judy Walton contributed to this report.

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