The Death Spiral of The Prisoners Aid Association
How corruption, waste, and mismanagement killed the 143-year-old nonprofit and left dozens of Baltimoreans homeless.
Published: December 26, 2012
With Randall Martin barricaded in his Baltimore County home, surrounded by a police tactical team, someone might have gotten the idea that Prisoners Aid Association, the century-old institution established to help ex-cons, was in trouble.
It was June 29, 2010. Martin, a respected member of PAA’s board of directors, had, at 3:50 that morning, doused the front porch of a PAA-controlled rowhouse with gasoline and set it ablaze. The home’s occupants—including Martin’s ex-girlfriend and her 5-year-old son—had been placed there by Martin himself.
A married father with a thriving group-home business and political ties in Baltimore and Annapolis, Martin had recently left PAA’s board, according to a fellow board member, possibly because of mounting pressure to donate to the nonprofit.
“He had a lot of money,” says Frank Marchant, who would become executive director during PAA’s final months. “[Executive Director] Mike Brown was asking everyone for money. I got kind of pissed about it myself.”
PAA’s 2009 tax return, covering the fiscal year ending June 30, 2010, lists Martin as one of five unpaid directors.
But whatever Martin’s status in 2010, Prisoners Aid was losing about $100,000 a year, according to its tax forms. And the nonprofit’s finances were already shaky years before that, even as Brown bragged about what one underling says he called his “million dollar house” in the county. In two separate transactions, in January and then November of 2007, Brown had borrowed $765,000 from Lexington National Insurance Corporation—better known as Fred Frank Bail Bonds—to purchase two new apartment properties for the nonprofit. At a time when millions of Americans with poor credit were taking out adjustable rate loans at less than 5 percent interest, PAA’s rate was 12 percent. The interest-only payments totaled $7,420 per month.
“I would have to go back to the board meeting minutes to see if the interest rate was given,” says William Buie, the president of PAA’s board in its final years. “An interest rate of 12 percent, that’s out of your mind. That’s a high interest rate. We learned of the details later in the game, when some of the loans started to default.”
But, says Buie, “PAA has always struggled in terms of its cash flow, in terms of its balance sheet. I guess that’s just the nature of a nonprofit for what is not always a popular cause.” Martin’s attempted murder of a client and destruction of one of the nonprofit’s houses (for which he faces up to 69.5 years in prison when he’s sentenced on Jan. 7) did not concern PAA’s board. “I don’t remember it really being discussed because he had resigned before all this happened,” Buie says, adding that no one knew about Martin’s six-year extracurricular relationship with the client. “If he had [still] been on the board, it would have been different.”
City officials apparently took no action either.
The Prisoners Aid Association was founded in 1869 to promote “the temporal and moral welfare of those who are in prison or other places of confinement, or lately discharged therefrom” and held its earliest meetings at the Friends Meeting House on Monument and Eutaw streets. It has toiled over the decades, using private and government donations to provide housing and other services to ex-offenders. Baltimore City has been a steady benefactor and continued to direct more than $1 million a year through 2010, even when the nonprofit Open Society Institute-Baltimore rescinded a $125,111-per-year grant because of concerns about the group’s performance.
In recent years, according to several former employees, the nonprofit skimped on repairs to its housing, mismanaged staff, and double-billed the city for clients, moving them from one dilapidated address to the next in a kind of shell game that some say had gone on for years. It wasn’t until February 2011, that city officials demanded repayment of up to $270,000 in taxpayer money spent on PAA rentals.
And that demand would involve a conflict of interest of a different PAA board member: Ralph Thomas, now serving a four-year federal prison sentence for the entirely-unrelated-to-PAA crime of stealing $756,000 from a child with cerebral palsy.
Prisoners Aid Association went out of business in the summer of 2012, leaving a mess of abandoned properties, hundreds of thousands in bad debts, and at least 30 clients facing homelessness. An audit released in November by the Inspector General for the federal Department of Housing and Urban Development took special notice of PAA in claiming that Baltimore City’s spending of $9.4 million in “Recovery Act” grants was “100 percent unsupported” and would have to be returned to the U.S. Treasury. As city Human Services officials scramble to explain the spending to the feds, PAA’s implosion illustrates what happens to taxpayer money when no one is checking for conflicts of interest, fair treatment, or even basic management competence.
“I just don’t think the city managed the funds properly,” says Sharma Williams, a former PAA case manager who says she tried repeatedly to blow the whistle on what she regarded as a corrupt management. “But they need to get the funding too.”
Although PAA was a roiling crisis in City Hall for more than a year, the Mayor’s Office of Human Services declined to discuss the drama. In response to City Paper’s request for an interview with its Homeless Services’ program director, Kate Briddell, the mayor’s office first issued a three-paragraph statement:
“Regarding PAA, the City terminated the contracts that gave grant money to PAA because PAA failed to provide adequate documentation of services as required under the terms of those reimbursement contracts. PAA was paid for all expenses for which it could show documentation.
“Regarding the recent HUD audit, the City’s Homeless Services Program will work closely with the HUD field office staff to demonstrate that grants were administered appropriately. We will work with all sub providers to produce documentation to support our firm belief that no waste, fraud or abuse occurred while administering these funds.
“ARRA [Recovery Act] dollars supported efforts to prevent and end homelessness for nearly 10,000 vulnerable people, and were a welcomed resource as they provided reimbursement for rental arrearage payments, utility arrearage payments, security deposits, on-going rental assistance, case management and legal services, thus ensuring those at-risk persons maintained their housing and those without housing were assisted in rapidly re-gaining housing.”
Pressed for more detail, the mayor’s office followed, just before deadline, with a page-and-a-half statement claiming that the Mayor’s Office of Human Services’ “Director of Fiscal Services worked extensively with the myriad employees that PAA proffered as their fiscal officer and none of the suggestions/corrective actions were heeded timely. The City terminated the contracts that gave grant money to PAA because PAA failed to provide adequate documentation of services as required under the terms of those reimbursement contracts.”
She adds that the city has “created a new position with the sole function of scrutinizing” homeless-service programs “and providing additional monitoring of grant recipients.”
With an annual budget in the range of $2 million, ownership of 44 rental units, separate “emergency” shelters for men and women, 75 or so clients, and a staff of 10 to 15 case managers, PAA was like dozens of Baltimore nonprofits paid by the city to provide food, shelter, job training, drug treatment, and other services to some of the poorest residents. Using federal grants to fund programs like “Shelter Plus Care” and “Rapid Rehousing,” plus private-foundation money from sources like the OSI-Baltimore, every dollar spent was, theoretically, accounted for under an exacting regimen of paper forms.
The condition of those forms—not PAA’s employees, clients, or houses—appears to be what dictated whether money flowed.
There are several competing narratives about PAA’s demise. Frank Marchant says the city began to cut off funding in 2011 only after he fired several corrupt employees, including Brown, who earned $142,000 as executive director: “I came in and found a god-awful mess,” Marchant says by telephone when first contacted by City Paper, in October. “Evidence of double- and triple-billing that had been going through Homeless Services for years. With their approval.”
Marchant says PAA was wiped out financially for doing the right thing, which, in addition to firing employees, he says includes sending an email to City Hall detailing double-billings and other financial mismanagement. At City Hall, he says, “everybody pretended like nothing was wrong. But after I sent that email, we were only getting like half the money we were supposed to get every month.”
William Buie says “the problem, at the end of the day,” was a personality clash between Marchant and Kate Briddell, with the secondary cause being the real-estate crash of 2008. “Once the funding gets pulled back, PAA is the proud owner of numerous pieces of real estate that, on a market basis, would be difficult for it to sustain itself,” Buie says. “The rent paid under these [federal programs] was above-market rent . . . a $700 apartment was actually receiving, say, $1,100 or $1,000.”
The extra money is supposed to pay for other services and case management, says Buie, adding that “the real bottom line on this [is that] these nonprofits really don’t get enough money to provide the services they provide. And they get paid on the back end.”
But a half-dozen former employees, a homeless client, and half-a-ream of internal PAA documents obtained by City Paper depict an organization that was mismanaged under both Brown and Marchant, with little effective oversight from its board of directors or its City Hall patrons.
“I got the sense that things were tight for people that worked downstairs, not for Mike Brown,” says Yolanda Moody, a case manager and executive assistant at PAA from April 2007 until she took maternity leave in April 2008. “He often bragged about his own financial situation—like a home he just purchased, like a million dollar home with a movie theater. The lady who worked with him [Karen Ackwood] did the same.”
Moody says the work atmosphere wasn’t very professional. “It was really relaxed at first, then, over time, there were cameras intalled. . . . We were being placed under they eye of suspicion.” She says she remembers a time when “Bank of America would not even cash our paychecks.”
James Winfield, a case manager for the Men’s Emergency Shelter from early 2009 until mid-2010 says he “was not impressed with the management of the organization from the on-site management, all the way up through the board.” Formerly a shelter manager for the Red Cross, Winfield says PAA’s shelter was poorly maintained by an array of handymen who had neither the time nor the incentive to fix things right. “Best way I can describe it is Mike was cheap,” Winfield says. “There is a difference between being frugal and being cheap.”
Another former case manager, who asked her name be withheld because the re-entry field in Baltimore is small and she doesn’t want to face repercussions, says in an email that she “witnessed and reported acts of fraud on numerous occasions. Last year, I went on the Federal Whistleblower website to report my allegations and never received a response. Additionally, myself and two other former PAA employees met with and reported fraud to Baltimore City Office of Inspector General, Agent Scott Borden. To my knowledge again, PAA seemed to experience no criminal repercussions.”
Several former employees say things got worse after PAA’s longtime manager, Clara Cuffie, was fired in mid-2009. Cuffie, who died a year later, was beloved by clients and employees, and she apparently knew how to manage the paperwork that was PAA’s lifeblood. The way she left raised suspicions among other workers.
Ackwood and Cuffie were both let go the same day, according to two former workers. But Ackwood (who did not respond to City Paper’s attempts to reach her) threw a tantrum, yelling about how she knew all the organization’s secrets and that there would be hell to pay.
“She made threats—and this I witnessed,” says Winfield. “She asked me to help her pack her office.”
Either that day or the next, Ackwood’s husband, PAA board member Ralph Thomas, visited PAA. “He and Mike took a walk around the block,” Winfield, who then worked directly for Ackwood and considered her a good boss, says. “The following Monday, Karen was back at work.”
Winfield says Cuffie, meanwhile, “left like a lady.”
The incident left several PAA staffers scratching their heads. “It was supposedly a budget issue. But the budget issue didn’t disappear over the weekend,” Winfield says. “When Cuffie was let go, he brought his buddy in to handle all the finances. . . . If you let Cuffie go because you can’t afford her position, then how do you bring Vince [Fuller] in to do the same thing?”
City Paper was not able to locate Fuller.
“For PAA 2009 was an incomparable year,” Brown wrote in the nonprofit’s Annual Report, celebrating 140 years of continuous service. Omitting the staff changes, he listed 634 “job readiness” workshops attended and 202 job placements from an initiative called the Fisherman’s Project. Brown also touted several new grants, including a three-year, $375,333 promise from OSI for the “Empower Baltimore Zone Re-entry Initiative.”
Brown put his wife, Deborah, in charge of that initiative at the new satellite office at 4601 Park Heights Ave. The nepotism rankled some PAA employees, but the real verdict came in August of 2010, two months after the Martin arson, when OSI rescinded the grant for nonperformance. “They really weren’t actively retaining people in the program,” says OSI-Baltimore Executive Director Dianna Morris. She says PAA was asked to repay $38,000 that had already been disbursed, but managed to return only about $10,000.
More bad news was coming.
On Feb. 9, 2011 the Mayor’s Office of Human Services told PAA that it would have to repay all the money spent since 2007 renting five different houses owned by Thomas. The rent was about $830 per month per unit, according to the minutes of PAA’s Feb. 16, 2011 board meeting, which says that, although Thomas “had assured our program administrator” that he had divested himself of those houses when he married Karen Ackwood, he had actually sold them on land-installment contracts, retaining an equity interest through a shell company called SSNS, LLC. Citing the conflict of interest, the city wanted up to $270,000 returned to the Shelter Plus Care program. Thomas resigned from the board and Buie swung into action.
“Apparently, the properties were owned prior to Mr. Thomas’s marriage to Karen Ackwood,” the lawyer wrote, adding that pursuant to his divorce, 30 percent of the equity lies with Thomas’ former wife. “As it pertains to Mrs. Karen Ackwood Thomas from PAA, therefore, our contention is that no conflict of interest exists.”
Buie went on to argue that the conflict-of-interest provisions do not extend to board members and that Thomas believed he had no conflict in fact because of the installment contracts. “Mr. Thomas would like all of his properties to stay in the program,” Buie wrote. “This, naturally, depends to some extent on your view of the matter.”
The city didn’t buy it, noting that, because of the fact that Shelter Plus Care pays above-market rents to its landlords, those installment contracts would not be viable but for the city money. “Upon marriage your employee benefits despite not being the record owner,” a March 7, 2011 letter from Briddell to Buie says. She asked for more documents, including “a copy of Prisoners Aid’s fidelity bond,” and thanked him for his cooperation.
At the March 16, 2011 board meeting, PAA’s former employment director, Lechelle Jones, spoke to the board “passionately” in the executive session. Jones “made allegations on behalf of the late Clara Cuffie,” alleging that there were two sets of books, expense accounts were abused, Brown’s wife was on the payroll, and “clients [were] on the books long after leaving.” She said an executive had been taking food from the nonprofit’s food pantry, according to the minutes. The board pledged to look into the allegations and fired Brown, naming Frank Marchant executive director in his place.
On the day he was fired, Brown had been with PAA for nearly 29 years. He had worked himself up from “employment specialist,” according to a resume posted online.
“Whatever happened at Prisoners Aid happened after I left,” Brown says in a short telephone interview. “They didn’t have the management. Ask Baltimore Homeless Services.”
Brown acknowledges he was fired because of the Thomas conflict of interest, which he says he was unaware of. He scoffs at Jones’ allegations: “Lechelle Jones was saying whatever she was talking about about someone who was passed away,” Brown says. “Lechelle was implicated in stealing in the company.”
City Paper spoke to Jones briefly but was not able to conduct a full interview by press time.
“Every contract you have, you have audits on top of audits—period. Every dime that come in, all of my audits come up clean,” Brown says. “It is what it is. Frank Marchant and William Buie, they didn’t know what they were doing. And that’s it.”
The summer of 2011 was chaotic at PAA. On May 13, 2011, officials from the Mayor’s Office of Human Services “monitored” PAA’s spending of its share of the federal stimulus grant. PAA could only show paperwork for four clients. “At the time we attempted to work with the vendor to produce additional files,” Briddell later wrote HUD, “[t]he vendor was undergoing a transition in leadership.” With no paperwork to back up its spending, the city terminated PAA’s grant on July 1.
By June, the situation at PAA’s apartment complex on Marjorie Lane was dire. Brown had bought the properties for $560,000 using one of the 12 percent interest-only loans from Lexington National. City inspectors had cited numerous violations, and repairs were going to cost more than $7,700, according to a punch list obtained by City Paper. It is unclear whether the work was ever done or paid for. A call to the contractor, Peter Pecovic, was not returned.
PAA opposed Brown’s application for $430 in weekly unemployment benefits, claiming he had “defrauded” PAA. The state unemployment insurance division rejected PAA’s challenge, saying “insufficient information has been presented to show that the claimant’s actions constituted misconduct.”
A longtime PAA pension plan was cancelled for lack of funds.
On Aug.16, 2011, Ralph Thomas was indicted on charges that he had stolen more than $830,000 from various clients of his financial management business, both at Wells Fargo and as vice president of Harbor Financial Services. The main theft—more than $756,000—was from a trust account of a child with cerebral palsy that Thomas managed, skimming several thousand dollars per month. Thomas hired Buie, who represented him as he pleaded guilty on Sept. 8. Thomas’s plea agreement was dated July 13, though—more than a month before the indictment was filed. Citing attorney-client privilege, Buie says he cannot divulge when he first became aware of the pending criminal charges against Thomas. But, as with Martin’s crimes, he says, they were unrelated to PAA.
Thomas forfeited the house he and Karen shared on Wilson Green Court in Reisterstown, plus several vehicles.
Meanwhile, Buie says he made a deal with the city for PAA to repay the $270,000 it demanded on an installment plan. “To be honest with you, the Thomas event was a problem,” Buie says, speaking of the conflict of interest and the resulting quarter-million-dollar city bill. “But it was resolved. The real problem was PAA became a real-estate company, and as such, became subject to all of the same woes and problems of any other real-estate company in this recession.”
While PAA’s buildings crumbled and Buie tended to his criminal clients, Marchant—who was not being paid his $90,000 salary—tried to expand PAA’s job-training programs by instituting, among other things, an “eBay class,” which, according to the draft minutes for the Aug. 17 board meeting report, received positive feedback from the office cleaner, Dominic. “However, the city was not interested in growing this promising program,” the minutes say, adding details about the course materials: “The case of books from author Danni [sic] Johnson arrived and will be distributed to clients.” Dani Johnson is a multilevel marketing guru specializing in home-based business opportunities.
With Ackwood gone for good, Bishop Barry Chapman was hired as assistant director at $51,500, to “oversee operations in the field,” he says. Chapman operates Jesus Christ Bail Bonds, whose Marchant-produced YouTube videos became a viral marketing joke in 2009.
He also ran a quixotic primary campaign for 10th District state delegate, receiving less than 7 percent of the vote. Initially he filed to run not under his name but as “Bail Out People,” a moniker that state elections officials rejected.
“Whatever chaos went on under Mike Brown and them, I didn’t have a lot of knowledge,” Chapman says. “I was there to try to make the organization float. If they needed to move clients from one place to another because where they were living needed to be upgraded, I did that.”
Chapman would also try to leverage his personal brand to try to win new markets for PAA, records indicate. The forward for a proposal for an “Ex-offenders Initiative for Rockland County, Spring Valley, New York” concludes: “Our motto is people only need a chance and not a hand out, but a hand up. Everything is changing and changing everything. However, we all Bold Innovative Servants Helping to Organize People, that can make it happen ‘Bishop Barry Chapman.’”
PAA did not get that contract, or others it tried for in Prince George’s County and Washington, D.C. in late September. But Buie says the expansion was a natural fit for PAA: “There has always been the idea that there should almost be a national ex-offender organization . . . to provide the housing, job placement, and support.”
Asked why PAA was trying to expand to other jurisdictions even as its board members were facing felony charges, its buildings were crumbling, and Baltimore was cutting the nonprofit’s funding, Buie says the funding cutoff was still more than a month away when he and Marchant were traveling to other states touting PAA’s history of service and Chapman’s rhymes.
“The city had a letter dated, I believe it was Oct. 5, saying they were going to defund Prisoners Aid. . . . but the true attempts to expand PAA were closer to August,” Buie says. “I really didn’t see that the funding—that that was gonna happen—until it happened.”
On Aug. 24, former employee Sharma Williams sent a four-page email detailing yet more allegations of fraud and other improprieties—this time focusing on the close ties between Buie and Marchant; their tendency to take long, expensive, boozy lunches on PAA’s dime; nepotism; and the shifting of clients between houses without regard for program funding. Williams’ email said she and office manager Calvin Boon had been fired after returning from vacation, without warning. She says she sent a letter to Baltimore Homeless Services detailing her concerns.
The email went first to Natasha Pratt-Harris, a Morgan State University professor who had joined the board in 2007. She forwarded the email to the rest of the board, suggesting that the allegations be investigated, and perhaps an outside auditor brought it.
“That led to a strange chain of events,” Pratt-Harris says. “They said I helped her write [the email]. I went to the board meeting and they started accusing me of trying to make problems public.”
Marchant’s response to Williams—sent in an email to the board through Buie—bordered on apoplectic: “This is a pure fabrication from two angry, terminated ex-employee [sic] with a rather vivid imaginations and evil intent. I will answer their nonsense and slanderous ramblings point by point.” Marchant goes on to disparage Williams, Boone, and other former PAA workers, one of whom he says worked under her daughter’s name and refused to provide documentation. “This . . . ‘Sandy’ person proceeded to embarrass this organization in front of the city auditor, by marching into my office demanding payment for services without presenting an invoice stating again ‘she never had to do that before.’ The Auditor Mark Graves leaned to me and said ‘I’d make her wait 30 days.’”
Marchant made sure to mention that Williams had been convicted of reckless endangerment and a narcotics conspiracy (the latter as a part of Antoine Rich’s drug organization). He said Boone and Williams had demanded raises of $15,000 and $5,000 each, and that Williams had nearly come to blows with a client’s niece during a meeting in Marchant’s office. “In conclusion I found this email offensive and slanderous most likely a cause for a future lawsuit against any and all who were party to writing this egregious and slanderous evil garbage.”
Pratt-Harris says she was taken aback by Marchant’s response. She resigned from the board on Oct. 19, in her resignation letter calling again for outside oversight. But it was too late.
By then, the city had already sent notice that it was cutting off PAA completely. “The city is invoking its right to terminate for convenience per the contract,” Briddell wrote in a letter to Buie, dated Oct. 5. “As we transfer this grant to another provider, we will need the full cooperation of your agency to supply either original Shelter Plus Care files or copies of the files of active clients.”
Marchant would later say that some key files were stolen.
Over the ensuing months PAA occasionally made the news, as its buildings were foreclosed and sometimes condemned. In April of 2012, The Sun reported that the lights were turned off at PAA’s 25th Street offices and the East Lanvale Street Emergency Shelter, quoting shelter resident Kevin Matthews: “We don’t have [anywhere] else to go. This is it for us.”
By October, the city had condemned the Marjorie Lane complex, evicting the residents.
In October, City Paper heard from a PAA client who was still living in the Men’s Emergency Shelter. There were six people (and two cats) inside with no electricity. City Paper made several visits to the house but was not able to meet with the occupants. The former PAA client recently moved to Baltimore Rescue Mission, he says, after police told everyone in the house they had to leave. The others stayed, the man, who asked that his name be withheld, reports.
Lechelle Jones told City Paper of another PAA client, a woman with three children, who she says is still homeless more than a year after the city said it moved PAA clients to Catholic Charities. “They could not find what grant she was on,” Jones says. City Paper was not able to reach this woman.
“Documented clients of PAA’s Shelter Plus Care program were transferred to other programs to receive housing and support services, including those run by Catholic Charities and Marian House,” Briddell writes in the second email response to City Paper. “This transfer process took about two months, as the agencies met with individuals to determine appropriate new placements. Although the City sent outreach teams to PAA’s emergency shelter for men, those participants refused assistance. The City also sent outreach teams to the house that PAA listed as its transitional housing program for women but found that no women were living there. To date, none of the participants documented by PAA to be in its Shelter Plus Care program are awaiting re-housing.”
Mary Anne O’Donnell, the director of the community services division of Catholic Charities of Baltimore says in a statement that the transfer “took about three months,” adding that “Catholic Charities received those PAA files that were necessary to run the program.”
Buie allows that the transfer may not have been as smooth as officials now depict. “There was some issue—they were supposed to be transferred to Catholic Charities, and some didn’t,” he says. “They may have had the same problem that PAA had—that you’re gonna get paid but on the back end.”
More than a year later, Buie says he was shocked by the city’s final cutoff. PAA had been negotiating with the city and thought it had agreements to restart funding. Still, Buie says he doesn’t think Sharma Williams’ allegations made any difference. “In the past, there had been emails that said this and that, that had theoretically been sent downtown,” Buie says. “And the train kept on moving.”
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