|Blog readers: Here’s my column from the June issue of Cincy Magazine. From a distance, Cincinnati looks clean and corruption free. Not so. Read on.EZ Money: Your tax dollars at work creating jobs — for Junebug the drug dealer
By Peter Bronson
|Cincinnati is like a big family. It has rowdy celebrations, domestic disputes, checkbook troubles, crazy aunts in the attic and family secrets nobody wants to talk about.This one starts with the Book of Genesis.
Genesis Redevelopment was a 1990s West End scandal that spread like crabgrass at City Hall. It should have been pulled out by the roots, but the city had no stomach for it. Too many important people would have been embarrassed.
Set up to improve housing for the poor, Genesis burned through $800,000 in city grants with nothing to show but missing records, payouts to relatives and a few patched roofs. An audit found more than $80,000 went to board members and their families.
Politicians feigned temporary outrage, but told city officials not to look too close at the Genesis gang: George “Junebug” Beatty, board president; his board-member brother Howard; and director Dale Mallory, whose powerful political family includes father Bill Mallory, a venerated former state House leader; brother William Mallory, a judge; and brother Mark Mallory, mayor of Cincinnati.
So while City Hall was busy looking the other way, the Genesis crowd sprouted in the West End Community Council, then again at the Cincinnati Empowerment Zone. And now it had some legal muscle: Ken “Lawdog” Lawson, the lawyer who was feared for his courtroom theatrics and incendiary accusations of racism until he was busted and admitted his longtime drug addiction.
Junebug Beatty took over the West End Community Council, then passed that off to Dale Mallory — who appointed Beatty to the Empowerment Zone board. Junebug’s brother, Howard, was also on the EZ board; Junebug’s wife collected a generous
“Genesis was just like the Empowerment Zone,” says Keith Blake, a West End resident since 1989. “The city had oversight but did nothing but run and hide.”
Another West-Ender, David Petersen, has lived at Dayton and Linn for 12 years and served on the EZ Board for three years. “It was clear to me that nobody was going to ask the tough questions,” he says. “It’s a bucket of worms.”
As Junebug and Dale Mallory took turns running the West End Community Council, Blake and Petersen battled both. They won a vote in 2006 to impeach Mallory, but they say the price was threats, rigged elections, theft and property damage.
“I was the architect for Dale’s impeachment,” Blake says. “We are not friends.”
“That stuff is old news,” Mallory replies. “Extremely old. That stuff doesn’t matter to anyone but them.”
But Petersen and Blake remember it well. Such as the time Petersen says he was threatened by Junebug, “Sit down and shut up or I’ll kill ya.” It was an open secret that Junebug was a drug dealer. He and Lawson are now in a federal prisons on drug charges. They were busted shortly after Howard Beatty was sent to prison for murdering Junebug’s activist enemy Kabaka Oba in front of City Hall in 2006.
I heard similar stories of property damage, violence and intimidation by the Beattys when I wrote about Junebug’s crime-magnet Parktown Café. The West End bar set records for police calls, but somehow still obtained city subsidies. Petersen and Blake say Junebug ruled the West End and used the Community Council to squelch complaints. The Parktown finally was shut down after Mallory was impeached.
By then, Junebug was at the Empowerment Zone and had a new business on Linn Street, Junebug’s Cafe, in a building purchased by Empowerment Zone Executive Director Harold Cleveland. In return, Beatty and other board members approved Cleveland’s salary. At last report, Cleveland was paid $170,000, plus a car allowance, a 401(k) that matched every employee dollar with $6, and a 12 percent “retention” bonus.
“I appreciate what the board did,” Cleveland says of his $20,000 bonus. “We followed the regulations. This was the most regulated program I’ve ever been involved in.”
He says every dime of EZ spending was approved by HUD, which handed the money and oversight to City Hall. “They can audit till the cows come home, but we have passed more audits than anybody I know of,” Cleveland says. That included a review of his purchase of the Junebug’s Cafe, he says. “There was nothing underhanded.”
But Councilman Charlie Winburn wants an audit to follow $25 million in EZ money. For example, a 2006 city report said that during one 18-month period, the city passed through $2.9 million in HUD grants — and 58 percent (more than $1.7 million) was spent on “administrative costs.” Another audit showed 84 percent of the loans in default.
“I don’t know of anyone who ever totally got to the bottom of it,” says one investigator, because auditors “were frustrated” by tangled and missing records.
Cleveland says, “Overall, administrative costs were much lower. In a snapshot, they may look higher.”
Anyone can build their own conclusions from a lumber yard of public records: city documents, news reports and a diary of the West End mutiny at impeachmallory.blogspot.com.
City Manager Milton Dohoney took a quick look and rejected Winburn’s demand for audits. He says spending was approved by HUD and “documentation shows that their expenditures were in compliance with regulations.” He passed the buck to the feds.
“I don’t think the city will do anything,” Blake says. “They’re compromised. They are responsible. They knew this crap was going on. They had a member on the board.”
And too many people might have to answer uncomfortable questions. Maybe Cleveland and Dohoney are right, and the EZ followed all the rules. But with Junebug’s gang in charge, color me day-glo-orange skeptical. And even if the city and HUD approved it all, sometimes it’s the stuff that’s legal that oughta be a crime.
According to HUD Secretary Andrew Cuomo, who created Empowerment Zones for the Clinton administration: “The concept was to lure businesses into areas that were at a competitive disadvantage • for the purpose of bringing jobs back to the distressed communities.”
But the jobs goal was soon stretched to include the kind of “midnight basketball” social programs that were scorched in Congress by public protests. Until President Bush ordered a refocus on jobs, the local Empowerment Zone contract goals were: job training, family wellbeing, neighborhood environment and civic infrastructure.
That four-lane highway was wide enough for bumper-to-bumper truckloads of soft social spending. It’s a textbook example of how government stimulus wastes millions, strays off course and winds up miles from its intended destination. Such as:
Why was the city taking EZ money? The city Health Department, Grass Roots Leadership Academy, Recreation Commission and Human Relations Commission together took more than $1 million. No wonder the city would not turn off the spigot when its own cup was overflowing.
What about organizations such as Volunteers of America ($125,000), the Urban League ($1 million), Media Bridges ($131,000) and programs to teach boxing and Bushido? What jobs and businesses were created?
Every group, business and individual on the list of more than 100 EZ cash recipients should be audited. Such as the Mallory Center in Avondale — not the West End — which got $182,000. It was one of only two projects approved outside the Empowerment Zone, Cleveland says.
Winburn says records are missing. Just as they vanished at Genesis and the West End Community Council. And once again, City Hall doesn’t want to look too hard.
Dale Mallory is now a state representative. “I’m doing other things now, bigger and better things,” he says. “A lot of people have moved on and grown, but some haven’t.”
Yes, it’s old news, but it keeps coming back. And it will happen again if nobody is held accountable.
But an investigation could embarrass Mayor Mark Mallory and blemish the distinguished Mallory name. And plenty of others should be worried.
The Empowerment Zone’s unlikely advocate is West Side conservative Republican state Sen. Bill Seitz, whose big fees came in for criticism at council meetings.
Former and current council members, such as former mayor Roxanne Qualls, promised the Empowerment Zone would transform the West End, reduce poverty and create jobs. It created jobs for the Genesis gang. Beyond that, it’s sketchy.
Cleveland claims more than 4,500 jobs were created or retained, but retained jobs are easy to exaggerate. The West End poor are still poor. Jobs are still harder to find than shell casings. And $25 million later, the money and many who spent it are gone.
Along the way, the collateral damage included City Link, a plan by local churches to create a one-stop campus for social services in the West End. When City Link allied with Dale Mallory, unwittingly associating with Junebug as well, “That poisoned it for well-meaning people in the West End,” Blake says. At best, the church groups were naïve, Petersen says. City Link won its court case, but still has not won over West End support.
Junebug’s is empty. The billboard mural of the Lawdog is gone. And the Empowerment Zone is back in the news.
“It was another one of those •This is a black thing, let’s not touch it,’” says Blake, who is African-American. At meetings of the West End Council run by Dale Mallory and Junebug, “Any non-black person who showed up would be scrutinized, shouted down, threatened or have their property damaged,” he says. “The race card was being dropped. I think that was paramount in the whole behavior.”
Nobody did anything about Genesis in the 90s, or the West End Community Council after that. And there’s no appetite for an investigation now.
Race-poisoned politics is Cincinnati’s crazy aunt in the attic. It’s our vodka bottle in the bushes. It’s the family secret nobody wants to talk about. So chances are, it will embarrass the city again soon.
EZ Money: Your tax dollars at work creating jobs — for Junebug the drug dealer
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