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Charity run by ex-Bell mayor didn't disclose government contracts, attorney general says

Steelworkers Oldtimers Foundation told the state it got no government funding from June 2006 to June 2009. But records from Bell, Norwalk, Fontana and Huntington Park show $2.6 million in payments.

August 21, 2010|By Patrick McGreevy, Los Angeles Times

Reporting from Sacramento — As the city of Bell and surrounding municipalities poured millions of dollars into contracts with a charity run by the former mayor, the organization filed sworn reports with the state that it was receiving no such money, according to records reviewed by The Times.

Officers of the organization including George Cole, the former mayor, signed statements under penalty of perjury that the Steelworkers Oldtimers Foundation did not receive any government funding during the three-year period ending June 30, 2009.

But records from Bell, Norwalk, Fontana, Huntington Park and other localities show contracts with the foundation during that period to provide services to senior citizens. Contracts and other records produced by the cities show that they paid the foundation at least $2.6 million combined during the time in question.

The state attorney general's office, which is investigating Bell's finances, has ordered the foundation to immediately disclose which government agencies have directed money its way.

The group "incorrectly answered" the question on the disclosure forms about whether the foundation received government funds, according to an Aug. 10 letter to the foundation from Tony Salazar, an analyst for the attorney general's Registry of Charitable Trusts.

A spokesman for the attorney general, Jim Finefrock, said that "to the extent there are government contracts, we're going to pay attention to that."

The foundation's filings with the state for at least six years say that it had not received government funding, but Finefrock said the attorney general's office is going back only three years because that is "standard practice."

The foundation's chief financial officer, Kim Kreft, said she had not seen the attorney general's letter, but any omission of information on disclosure reports would have been unintentional, "a mistake."

She noted that the organization did disclose receipt of $19.6 million in "government contributions" during the last three years in federal documents, which were provided to the state. The group did not, however, identify the cities and other government agencies that bankrolled it, another state requirement.

That information is important for regulators and the community at large in evaluating the foundation's operations, including determining whether conflicts of interest are present, said Ken Berger, president of Charity Navigator, an online service that reviews nonprofits.

"This information is something the public should know," Berger said.

The attorney general's office sent its letter to the foundation two weeks after a leader of a Bell citizens watchdog group confronted Atty. Gen. Jerry Brown at a public event and told him he should look into the steelworker charity as part of its Bell investigation.

The Oldtimers group is well-connected politically. In addition to Cole, the foundation's 2009 tax filing lists among its officers former state Assemblyman Tom Calderon, as unpaid president. Calderon declined to comment, but his wife, Marcella, confirmed that he is on the foundation board. She said she did not believe he had been officially elected president.

The tax filing also lists as board members Fontana City Councilwoman Acquanetta Warren, Norwalk City Councilman Mike Mendez and former San Bernardino County Supervisor Cal McElwain. McElwain said he had not been active on the board for three years.

The foundation's purpose, according to its federal tax filings, is "to promote the welfare of needy elderly and handicapped families." It had revenues of $7.5 million last year, and salaries and compensation totaling $3.4 million. The latter includes Cole's $95,000 salary as chief executive.

The foundation reports in the filings that about $6.5 million is spent each year providing meals and transportation to seniors and the disabled.

Cole served on the Bell City Council for 24 years, including rotations as mayor, and abruptly announced his retirement from the council in October 2008. He told The Times recently that he had not participated in the council vote to give his foundation a contract to provide transportation to senior citizens. But the fact that Cole's charity was largely financed by the city while he was on the council gives the appearance of a conflict, Berger said.

"It may be technically within the law, but it does not reflect best practices," Berger said.

patrick.mcgreevy@latimes.com

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