Can’t ‘just get rid of everyone who does anything wrong’: de Blasio on shelter mess

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Mayor Bill de Blasio was pressured as soon as once more to defend his embattled homeless shelter system Monday after a weekend of newspaper exposés revealed the CEO of a high supplier cashed in as he put friends on the payroll and funneled thousands and thousands to for-profit corporations he controls.

Asked for remark, an aggravated de Blasio prefaced his response by asking the press to not “dumb this down.”

“There are only so many organizations that provide the services,” Hizzoner insisted as he was repeatedly pressed on why town was persevering with to contract with Jack Brown.

His remarks got here simply hours after The Post documented how Brown, who heads Brooklyn-based nonprofit shelter operator CORE Services Group, established an online of for-profit corporations that he funneled thousands and thousands in taxpayer funds to lately.

“It’s not as simple as just get rid of everyone who does anything wrong anytime they do it — because there would be very few [providers] left,” de Blasio stated.

“If an organization is unacceptable, we get rid of them. If they can be fixed, if we can work with them to make reforms and they provide a good enough product to serve people who are homeless, we’re going to keep trying to fix that if we can.”

The New York Times published the same report on Brown Sunday.

New York City is obligated to ensure each homeless particular person shelter underneath the phrases of a authorized settlement signed within the Eighties in the course of the Koch administration.

Officials have repeatedly claimed they battle to draw certified distributors to supply the providers.

Well-known nonprofits normally steer away from the work as a result of they are saying the contracts don’t pay sufficient — a shortcoming exacerbated by City Hall’s well-publicized troubles paying its payments on time, homeless advocates and consultants say.

Bergen St Shelter in a Google Map image. 1173 Bergen St, Brooklyn. ORE Services Group
New York City is obligated to ensure each homeless particular person shelter underneath the phrases of a authorized settlement signed within the Eighties.
Google

That, in flip, opened the doorways for individuals like Brown, who has been a central determine in at the very least two previous contracting scandals.

This time, his nonprofit CORE netted metropolis contracts price $800 million since 2014 to function shelters and supply providers to the homeless — earlier than touchdown again within the obtrusive highlight of the press and metropolis investigations.

“The city had been chronically late in paying contracts and so the longtime nonprofits weren’t able to expand their shelters as the homeless population soared,” stated a nonprofit government, who requested to not be named due to their group’s relationship with City Hall.

“The city was desperate for more shelters and was handing out contracts to whoever raised their hand regardless of the red flags that were going up.”

The Post’s examination — backed by an examination of greater than 2,000 pages of tax returns, court docket papers and contracting paperwork — discovered that Brown:

  • Created a string of for-profit corporations which have obtained thousands and thousands of {dollars} to supply key providers at CORE’s shelters;
  • CORE paid a agency, wherein Brown holds a considerable stake, that obtained greater than $3 million in hire over two years;
  • At least three relations of Brown or members of CORE’s varied boards are employed by the nonprofit or associated entities;

The for-profit corporations supplied key providers to the shelters Brown’s nonprofit operated, like safety, meals service and constructing upkeep and administration.

Documents seen by The Post confirmed that Brown established the safety firm, ProfessionalCore, the identical month CORE was get together to a authorized settlement that required it to rent a safety agency for a brand new and controversial shelter in Crown Heights.

And they confirmed that metropolis bureaucrats flagged the obvious conflicts of curiosity with the distributors in 2017 as a part of their evaluate of the contract to function the Crown Height shelter, however dropped their objections.

CORE Services Group CEO Jack Brown
CORE Services Group CEO Jack Brown established an online of for-profit corporations that he funneled thousands and thousands in taxpayer funds to lately.
Facebook

At the time, CORE claimed to town that the contractors had been wholly-owned by the non-profit and the proceeds had been reinvested again into the shelter operations.

However, these claims had been undercut by a 2018 submitting with the IRS wherein a CORE Services subsidiary reported the for-profit corporations had been held in an organization owned by an government there — apparently Brown.

He was one in all solely two executives listed on the subsidiary’s tax return — and he was additionally named because the CEO of the for-profit corporations on filings with the New York Secretary of State.

Meanwhile, The Times obtained information that confirmed Brown’s for-profit corporations had been paying him greater than $500,000 yearly — on high of the greater than $500,000 he was already making at Core Services and its non-profit associates, that means he was banking an estimated $1 million a 12 months.

Brown denied wrongdoing in statements supplied to each newspapers.

“I don’t think nonprofit folks, in general, should be making that kind of money,” stated de Blasio, when requested about Brown’s seven-figure compensation as underwritten by taxpayers.

“How did this individual achieve what he did? I’d like that answer too, and don’t find it acceptable,” he added, saying that City Hall would try to claw again funds pending the outcomes of an already-underway audit. “If someone’s doing the wrong thing, they should not be rewarded.”

Officials have already ordered Brown to retire his for-profit corporations.

During Monday’s press convention, de Blasio and Homeless Services Commissioner Steve Banks additionally repeatedly claimed that the scandal at CORE was an remoted incident.

“We work with more than 60 shelter providers and I don’t want the actions of particular executives in this instance to denigrate the work the other great providers do,” Banks stated at one level.

Neither man talked about the three different present and former main shelter operators ensnared by scandal during the last two years, lots of which echo the issues recognized at CORE.

In February, The Times revealed that the chief of Bronx Parent Housing Network — a significant shelter operator — had repeatedly sexually harassed and assaulted homeless New Yorkers, all whereas giving jobs to relations, organising for-profit distributors and even leasing a Mercedes on the non-profit’s dime. The government, Victor Rivera, was indicted in March in a bribery and kickback scheme.

In October 2020, The Post revealed that state Attorney General Letitia James obtained a search warrant for the CEO of Agulia Inc., a politically linked Bronx nonprofit that had scored $250 million in contracts from DHS over time. The nonprofit’s board sacked the honcho, Jenny Rivera.

Months earlier, in February 2020, federal prosecutors and the Department of Investigation raided Queens-based Childrens Community Services — which netted some $600 million in metropolis contracts — as they examined allegations executives bilked taxpayers with thousands and thousands in fraudulent billings. The nonprofit was later put in a receivership by a state choose.