Questions raised about Jackson nonprofit's spending

The state auditor's office is investigating Downtown Jackson Partners on allegations of "improper governmental action," according to a letter from the attorney general's office.

After obtaining copies of documents on the nonprofit that promotes and markets the city's 66-block core, The Clarion-Ledger questioned Partners officials last week about some of the organization's accounting practices, including a lack of receipts on some purchases.

Chairman of the board David Watkins told the newspaper later that they had discovered four boxes of records from 2010 and 2012 were missing from the office and that they planned to file a report with Jackson police. "We can't have people stealing records," he said.

The records obtained by The Clarion-Ledger — all of them copies — are from 2007 to the present.

On Friday, Watkins told the newspaper that executive assistant Linda Brune had been fired as a result of the missing files, saying, "she is the one who took the documents, and they are still missing."

He said she was going to be fired last fall but "that did not happen for numerous reasons."

On March 20, Brune met with the state auditor's office to report allegations regarding the Partners and registered as a whistle-blower, according to a letter Friday from the attorney general's office.

"Ms. Brune is a hero for coming forward to law enforcement with allegations of illegal activity," said her attorney, John Reeves of Jackson. "She has taken nothing from that office. They're looking to find a scapegoat, and it won't work."

Copies of documents obtained by The Clarion-Ledger show lavish dinners, thousands spent on office furnishings, thousands of dollars in business going to board members or their relatives, Partners president Ben Allen transferring the nonprofit's 1988 Silverado to himself, and repeated reimbursed purchases on his personal credit card with no receipts to back them up.

Allen, who earns $150,000 in his post, said lavish spending is necessary at times because the nonprofit works in the "big leagues," trying to lure investors to the capital city. "We work our ass off," he said.

Watkins called it "bad judgment" to not have better records. He trusts Allen "to not be stealing money," and "new controls" are ensuring proper documentation, he said. "The fact that tax dollars support us means we operate under a much higher standard to make sure every penny is spent right."

On Jan. 8, 2007, the Partners purchased a used Chevy Silverado half-ton pickup for $3,500 for landscaping and maintenance. In the years that followed, it paid for repairs and upkeep of the truck.

On Jan. 19, 2011, when the Partners' office tried to renew the truck's license tag, Hinds County Tax Collector Eddie Fair's office wrote a note back: "Our record shows you no longer own this 1988 Chevy pickup."

Hinds County records obtained by The Clarion-Ledger show the Silverado became Allen's on March 27, 2010 — 11 days after the Partners paid $1,498 to replace the transmission.

The nonprofit, records show, has continued to pay for his tag, taxes, tires, repairs, insurance and gas.

Allen dismissed the Silverado as worth almost nothing, initially saying, "I bought it," and then that the Partners "may have just given it to me."

Allen said the board's executive committee, which kept no minutes at the time, authorized giving the truck to him because insurance was costing the nonprofit $2,000 annually. That insurance now costs about $400, he said.

The nonprofit obtains its funding each year through taxes paid by downtown Jackson businesses over a 66-block area, including The Clarion-Ledger.

The nonprofit was just a shell when he took over in 2007, Allen said. "We didn't even have any stationery."

Today, the Partners takes in more than $1 million in taxes, spending nearly half of that money on public safety, landscaping and maintenance.

The news media sometimes call the nonprofit a "cheerleader" for the capital city.

Allen sees its job as being a facilitator for investment in downtown Jackson, which he said has experienced $700 million in development since 2005.

Downtown Jackson now has 309 apartments, Allen said. "All of them have a waiting list."

He also sees Downtown Partners as ambassadors. The Partners offer "Ambassador Assistance" for people downtown who run into problems, day or night.

If the ambassadors fail to pick up, Allen said, the call rings through to him.

The city of Jackson and nonprofits regularly use the Partners' marketing center for meetings and gatherings, free of charge.

Allen said the Partners spent about $300,000 overall for furnishings, explaining that such spending is necessary to put the best foot forward in hopes of getting investors to put their money into the capital city.

Among those purchases, in 2009, was more than $18,000 for office furnishings from Mosaic Interiors, including $4,428 for six barstools, $1,106 for two "artificial greenery columns" and $1,655 for Swede beer pints, martini glasses, aqua cocktail tumblers, similar items and a glass ice bucket.

When members join the nonprofit's board, they sign a conflict-of-interest statement regarding their family.

Mosaic is owned by Courtney Rae Peters, the daughter-in-law of board member Mike Peters.

He said he recused himself from voting on the matter. "There were several interior designers, and they decided to use her," he said.

After joining the Partners' board, Hilda Stauss Owen, owner of CommunicationArts Co., signed a June 16, 2009, document that promised: "Neither I nor any member of my immediate family has any official affiliation with any organization which may potentially contract with (Downtown Jackson Partners)."

Between 2012 and 2013, CommunicationArts charged the Partners $15,000 for marketing consultations regarding online surveys, reviews of the Partners' website and talking points for target audiences.

Owen said the nonprofit was looking to go outside for marketing research, but "we didn't really have the budget. I volunteered to do some work. We were delivering a great deal of work for a reduced rate."

Peters said Owen was wary of any conflict and didn't take part in any vote. "All that was done properly and correctly," he said.

Over the past two decades, Owen and CommunicationArts "have been among the biggest champions of downtown Jackson," he said. "Why not use somebody like that? That's not a conflict. That's good business."

Partners' board member, Jackson attorney Sam Begley, said the document that board members sign is meant for disclosure, rather than restricting business with board members.

Owen praised the Partners as "very fiscally responsible," spending "the vast majority of its resources in keeping downtown clean and safe."

She, Peters and Watkins also gave high marks to Allen's leadership during downtown's transition.

"Ben has done a fabulous job," Peters said. "He's the best cheerleader the downtown could have, not only day to day, but he understands the politics and ins and outs of the city."

Watkins said the board is proud to have Allen "because he's been a treasure to the city."

For the past several years, the nonprofit has paid Allen's personal credit card bill, which he turned in each month.

As the head of the nonprofit, he has paid hundreds and even thousands on a meal.

On May 1, 2012, Allen charged a $1,232.22 meal at Parlor Market that he, Watkins and others had with owners in the United Football League and former NFL coach Jerry Glanville, who were talking about bringing a football team to Jackson.

"There were probably a dozen people there," Watkins said. "It was pricey but a worthy effort you want ... especially when the governor was going to be there."

In the end, the governor didn't make the meal that included tuna tartare, wild game, fried oyster, medium rare strip steaks, rabbit meatballs, dessert, nine glasses of pinot noir, 10 glasses of chardonnay, four glasses of Bottega and a glass of Glenlivet 12-year-old whiskey on the rocks.

Five months later, the UFL was no more.

Allen said the cost of such a meal was justified.

"You've got to put your best foot forward," he said. "We thought we had a shot at the UFL."

Records show Allen is a generous tipper. On June 21, 2011, when he charged $140 at Parlor Market, he also left a $120 tip.

He said he was grateful to recently receive a credit card to use for the nonprofit's business.

Before that, he was using his personal credit card only for Partners' business and turned in the receipts for all the expenses.

Records obtained by The Clarion-Ledger show:

• Repeated purchases from Amazon, Sam's Club, Office Depot and iTunes attributed to "office," "office supplies" and "computer expenses" without receipts.

• Repeated purchases from Shell, Citgo and similar places attributed to "gas" without receipts.

• Repeated purchases from restaurants and liquor stores without receipts.

• Repeated purchases for website set up, computer programs, computer expenses, PayPal and Wi-Fi services without receipts.

Auditors have had no problems with the way Partners kept records, Allen said. Partners staffers shared receipts that showed the iTunes was for a computer program and Amazon for office supplies.

Watkins said he has long pushed for the nonprofit to have its own credit card. He said he's also insisting that receipts be provided.

The costliest move the Partners have made in recent years was sinking $70,000 or more into the nonprofit Venture Incubator, which started in 2010 and had crashed by 2012.

Allen said Venture could never find enough outside funding.

"Everybody saw the need but couldn't work it into the budget," explained Rob Burnham, the current executive director who helped revive Venture. "They were some great people working with it and great support but not enough to get it off the ground."

Burnham explained the "Downtown Jackson Partners was focused on that area of Jackson, trying to bring people into that area. But if you're physically limited, you've limited your market."

Burnham, who lives in Kosciusko, switched the focus of Venture Incubator from downtown Jackson to rural areas across Mississippi, teaching classes and becoming a virtual adviser for upstarts.

"I'll direct people to who they need to make contact with," he said. "A lot of times they just need to know where to start. It's a lot easier to get into business than it is to get out of it."

Clarion-Ledger Publisher Leslie Hurst, who serves on the Partners board, said she questioned Allen last October about the amount of taxes the newspaper paid. She said she was weighing other options, including selling the building and renting a smaller location elsewhere downtown.

In the past, she said she has not been able to attend most meetings because the times conflicted with the Greater Jackson Partnership board meetings. She said she believes it's important for the newspaper to have a presence on the board.

"I am very much a proponent of a strong, vibrant downtown Jackson," she said. "It's a great city and deserves a great downtown."

Downtown Jackson Partners is classified as a "social welfare" nonprofit by the IRS. By definition, social welfare nonprofits typically promote civic work or public policy. They can take part in politics as long as that is not the primary focus.

The Partners collected $76,500 from sponsors for Jackson Mayor Tony Yarber's inauguration gala.

Those contributing included the Butler Snow law firm, which contributed $5,000, and Trustmark National Bank, which contributed $7,500.

Watkins said he thought the Chamber of Commerce's nonprofit arm should have handled the collection, rather than the Partners.

In 2012, the Partners gave $500 to House Speaker Philip Gunn. Allen said the contribution came at a fundraising luncheon at River Hills.

Watkins said he thought the political contribution to Gunn "was stupid. I think our CPA was surprised."

Something needs to be done about it, he said. "We're going to have to come up with $500 and pay back."

On Aug. 31, 2011, Allen charged $100 to the National Multiple Sclerosis Society for a "donation for Ridgeland city event."

In the past, Allen had made donations to different causes but doesn't do that anymore, Watkins said.

"I'm convinced nothing has been stolen, and I'm convinced things can be accounted for," he said. "I'm convinced we're going to be doing a better job."

Contact Jerry Mitchell at (601) 961-7064 or jmitchell@jackson.gannett.com Follow @jmitchellnews on Twitter.

What the documents show

• Eleven days after the Partners paid $1,498 to replace the transmission on a used Chevy Silverado half-ton pickup it purchased for $3,500, DJP President Ben Allen transferred the title to him. The Partners continue to pay for the Silverado's tags, taxes, tires, repairs, insurance and gas.

• In 2009, the Partners spent more than $18,000 for office furnishings from Mosaic Interiors — owned by a board member's daughter-in-law — including $4,428 for six barstools, $1,106 for two "artificial greenery columns" and $1,655 for Swede beer pints, martini glasses, aqua cocktail tumblers, similar items and a glass ice bucket.

• The Partners paid for a $1,232.22 meal at Parlor Market on May 1, 2012, that Ben Allen and David Watkins had with seven others that included owners in the now-defunct United Football League and former NFL coach Jerry Glanville, who were talking about bringing a football team to Jackson.

• The Partners sunk $70,000 into the nonprofit Venture Incubator, which started in 2010 and had crashed by 2012.