Nine of the 62 groups that run shelters are on an internal city watch list for issues like conflict of interest and financial issues. All of them continue to receive funding from the city.
In February, after a Times investigation uncovered abuse by another operator of homeless shelters in the Bronx, Mr de Blasio ordered a thorough audit of every nonprofit group in the shelter system. the city to examine conflicts of interest, spending and nepotism. Officials said they aim to complete the review by the end of the year.
Mr Brown, 53, was one of many nonprofit leaders the Times examined who found a way to personally benefit from the city’s extraordinary spending injection. In addition to being the CEO of the nonprofit organization he founded, CORE Services Group, Mr. Brown started a security company that monitored his shelters, a maintenance company that made repairs and a catering business that fed residents, records show. Mr. Brown was paid a salary as the head of each company.
Homeless people living in one of CORE’s largest shelters in Queens have complained about threadbare services and poor conditions. A dozen residents interviewed by The Times said Mr Brown’s catering company frequently served them moldy bacon, undercooked meatloaf and powdered eggs, making them sick. They said security guards at Mr. Brown’s business failed to break up the fights and often slept on the job.
Nonprofit groups that receive money from the city are required to solicit at least three independent bids for most contracts to avoid price hikes. But CORE broke those rules and simply attributed millions of dollars in business to companies overseen by Mr Brown, according to an independent auditor’s report.
Mr. Brown and his business practices had already come under scrutiny.
When Mr. Brown was an executive at a private prison company in 2003, the company was embroiled in one of the biggest lobbying scandals in New York history and was fined $ 300,000 for violating lobbying laws. (CORE said Mr. Brown was not involved in any misconduct.)
He went on to work at a rival private prison company, Geo Group, and while the company was vying for a multi-million dollar federal contract to run halfway houses, Mr. Brown quietly formed his own non-profit organization. lucrative, applied for the same contract and successfully under-bid his former employer. Geo Group sued Mr Brown and his non-profit organization for fraud, claiming he stole confidential documents, court documents show. Mr. Brown denied the allegations and settled the lawsuit, without admitting to wrongdoing.