City: Conflict of Interest Process Not Followed on Grant-Funded Home Project

Without the federal government being notified of a conflict of interest, the son of the chief executive officer of Memorial Baptist Church has been living in a federally-funded home built by the non-profit organization, according to public records obtained by Eyewitness News. However, Rev. Adrian Brooks, the CEO of Memorial CDC, said the non-profit followed all protocols, instead alleging that it was city officials who dropped the ball.

According to financial records obtained by Eyewitness News, the home located in the 800-block of Washington Avenue was built using $182,000 in federal HOME Investment Partnership funds, a grant program intended to help low income individuals obtain or retain affordable housing. Another federal grant totaling $36,440 helped connect the three-bedroom home to the city's sewer system, bringing a total investment of more than $222,000. The federal grant money was provided to the non-profit Memorial CDC with the city's Department of Metropolitan Development serving as a pass-through.

Construction of the home was completed in January. On February 1st, Austin Brooks, the son of Rev. Adrian Brooks, signed an agreement with Memorial CDC to lease the newly-constructed home, according to the lease agreement.

Because the home was built as part of an affordable housing grant, future tenants have to be income-qualified. Such a qualification requires the prospective tenant to undergo an income verification process, which includes a review of financial documents like pay stubs.

According to Kelley Coures, the executive director of the Department of Metropolitan Development, Austin Brooks was determined to be income-qualified to live at the home. However, Memorial CDC failed to follow the correct process in obtaining an exception to laws regarding conflicts of interest.

"To date, Memorial CDC has done a good job of filling their homes with income-qualified people. This is just one of those exceptions that we've never had before. We're trying to work through it as fast as possible," Coures said. "The city can't approve an exception to policy. That exception has to be approved by [the U.S. Department of Housing and Urban Development]."

The federal government requires conflict of interest disclosure forms to be filled out any time a conflict of interest is real or apparent. In the case of the home on Washington Avenue, the conflict of interest involves the son of the developer (Memorial CDC) living at a federally-funded home that the developer built.

According to federal guidelines, there's a process that must be followed in order to be granted an exception to a conflict of interest. The conflict of interest disclosure statement must be filled out and submitted to a governmental entity. In this case, the governmental entity would be the City of Evansville. Once the form is submitted, the city must present the document to a public body like the City Council or Board of Public Works. That public body will then read the conflict of interest into the public record and submit all applicable documentation to the federal government for approval. Only the federal government -- or HUD in this case -- can approve the exception.

It's only after this process is completed and the federal approval is granted can the prospective tenant move into or take possession of the federally funded property.

"This process was not followed but I think it was probably an oversight [by Memorial CDC]," Coures said. "But we're trying as best we can to get this thing resolved as best we can and as quickly as we can."

According to the lease agreement, Brooks' son began renting the home on February 1st. The records also show Rev. Brooks signed the conflict of interest disclosure form on the same date. Rev. Brooks signed the form under a paragraph which affirmed that the form was, 'submitted to the governmental entity and accepted by the governmental entity in a public meeting, to the governtal entity prior to final action on the contract or purchase."

According to the conflict of interest statement, the rental of the property would provide no profit for the dependent or the non-profit. Austin Brooks and his family were to lease the home for $800 per month on contract, giving the family the option of later purchasing the home for $142,000.

Coures said the city never received the conflict of interest disclosure form until months after Austin Brooks and his family moved into the home. Additionally, Coures said, the conflict of interest wasn't discovered until city officials conducted a federally-required annual review of Memorial CDC's records.

"My guess is [Rev. Brooks] probably meant to do it and just didn't get it done," Coures said.

Coures later added that he doesn't necessarily have a problem with Austin Brooks living at the home so long as the process was followed correctly and the city stays in compliance with the federal government.

"Personally, it's fine with me as long as someone is income-qualified to occupy the unit. We're just trying to hurry the process up to get this behind us," Coures said. "If he's the person that was most qualified for the house, I have no issue with it at all."

In a text message, Rev. Brooks told Eyewitness News that Memorial CDC has always communicated with DMD what the organization's intentions were. Additionally, Brooks said the non-profit did everything above board.

"It's our responsibility to gather, quantify, certify and then retain all information. Beyond that, it falls on DMD," Rev. Brooks said. "I believe we followed the appropriate protocol."

Rev. Brooks also said on Monday that the non-profit filled out all of the forms that were required by HUD, including the conflict of interest form. Rev. Brooks also went on to allege that the increased scrutiny was the result of retribution from city officials after he brought to light the issue surrounding the future of Lincoln Estates. The controversy also led to a heated discussion at a traveling city hall meeting about possible gentrification in the Center City. Coures adamantly denied Rev. Brooks' allegation, saying the conflict of interest issue pre-dates the Lincoln Estates controversy.

"There was a partnership with the city that made sure we/they remained in compliance," Rev. Brooks said via text message. "If you look at recent moves, it makes one question motive."

Rev. Brooks pointed to the fact that the issue was initially put on the agenda for Monday's City Council meeting. Historically in at least five previous conflicts of interest involving city employees, the Board of Public Works took up the issue, Brooks said. However, Coures contends that he initially requested to have on the City Council's agenda because it was the next available public meeting.

"All we're trying to do is hurry this up because we're behind the fact and we want to get it done as quickly as possible because we want the person in the home to enjoy being the homeowner. We want to get this done as fast as possible," Coures said.

Because the city still needs the conflict of interest form to be put in the public record before sending it to HUD, the form still needs to go before a public body. Instead of appearing before City Council Monday night, the issue will go before the Board of Public Works on Thursday at 1:30pm in Room 301.

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