Prometheus 6

Feds collect files from nonprofit
by Andrew Vanacore, The Times-Picayune
Monday August 11, 2008, 10:02 PM

Federal investigators collected documents Monday from the shuttered New Orleans Affordable Homeownership Corp., the city-chartered and city-financed nonprofit that ran a home-remediation program in 2006 and 2007....

The city nonprofit has been under intense scrutiny for the past several weeks, as news reports raised questions about whether its contractors billed taxpayers for work they didn't perform on blighted New Orleans homes. The remediation program, aimed at the poor and elderly, was touted as a salve to sagging neighborhoods by Mayor Ray Nagin in his 2007 budget address.

But some of the homes listed on NOAH work sheets were in fact gutted by volunteer groups, records show. Meanwhile, more than 100 of the 870 properties that the agency's contractors claim to have remediated have since been torn down. Neighbors have said that some of the demolished homes were not cleaned up at all before they were razed, though taxpayers were billed for the service.

A federal grand jury subpoena issued last week allows investigators to collect documents related to NOAH's finances, its client files and records of payments to subcontractors, according to NOAH board member Bob Brown. Brown said he was served the official demand for records late Friday.

Monday's document sweep came just three days after a similar operation was conducted quietly by New Orleans Inspector General Bob Cerasoli, in which Cerasoli's staff collected papers from agency files, according to Brown.

Brown said that in addition to the subpoena for records, he was served with a subpoena asking him to appear before a federal grand jury on Aug. 21 to give testimony and documents.

At least three City Council members on Friday also received federal subpoenas related to the house-gutting and yard-cleanup program, according to the council's attorney. The subpoenas ask council members to turn over NOAH-related documents to the grand jury by Aug. 21.

Russ Herman, a lawyer representing the council, said that he expects all seven council members will eventually be served. Herman did not return a phone call Monday.