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Community Group's Finances Investigated

Hartford Nonprofit Closed For Review

April 13, 2005
By JEFFREY B. COHEN, Courant Staff Writer

A sign on the locked door of ONE/CHANE this week tells visitors that the office is closed - an effort, its leaders say, to get its business affairs in order and to streamline its administrative costs.

Attorney General Richard Blumenthal said Tuesday he is also taking a close look at ONE/CHANE's finances.

"We are investigating evidence of financial and governance irregularities at ONE/CHANE," Blumenthal said.

He declined to say what improprieties are being investigated except to say his office is looking into a variety of problems.

"These indications of impropriety are very troubling," he said. "We hope to resolve them as promptly as possible. The new management is cooperative and we trust that it will continue to be."

Without getting into specifics about ONE/CHANE, Blumenthal explained that "any charitable or nonprofit group is compelled by law to use its money as contributors or donors intend."

ONE/CHANE is a community improvement organization in north Hartford that made its name as an advocate for community interests but has most recently been involved in housing development. Last March, the organization's board fired its executive director, Larry Charles Sr., after it decided his tenure was too controversial to allow him to continue.

In January, it hired a new executive director, Frederick E. Smith.

"I don't have anything to hide from the attorney general's office," Smith said Tuesday. "I will be extremely supportive of the office in identifying anything that happened prior to my arrival so that we can remedy it, so that ONE/CHANE can move forward."

At the same time that the organization is under state scrutiny, it is also completing its own internal audit - one that will give it a better sense of how it has recently spent the money it has raised, Smith said. To help in that effort, Smith has effectively closed the group's Main Street office to the public.

"We're trying to reorganize and restructure, so that needs to happen in isolation," Smith said, adding that the temporary office closing is also a dollar saver. "There are some savings of operating dollars when staff that would be managing the phones and greeting the customers aren't there."

Smith has placed one employee on leave as part of the organization's fiscal "belt tightening," he said.

As he is working to bring order to the organization's books, Smith said he is also moving forward on programming initiatives. For instance, he said he has applied to the city for funding that would allow him to restart a neighborhood block watch program.

"This is a community organization that many individuals in the community have a vested interest in," Smith said. "I want to restore the confidence the community once had in this organization."

ONE/CHANE's executive board President Terry Waller said he welcomes Blumenthal's investigation. If the investigation turns up nothing, then the organization gets a clean bill of health it can report to its funders, he said. If the investigation finds wrongdoing, then the organization will know just what to do to correct the problem, he said.

"Everyone wants an investigation done," said Waller, who added that he had once tried to get Blumenthal's office involved last year but lacked the proof to back up his suspicions. "I think it's a great thing. I'm elated."

ONE/CHANE is in the process of a complete restructuring, Waller said. He and his board are awaiting results of the financial audit to move forward, he said.

"We've been able to get some funding, but we're not getting enough, and that's the truth," he said, adding that the organization is making what he called drastic changes. "But I believe we're on track."

Sanctions could result should Blumenthal's investigation find wrongdoing, the attorney general said.

"There are penalties involved in the misuse or misappropriation of charitable funds," he said, noting that the investigation began within the past month. "Sometimes action is taken against the organization, or it is taken against the individuals who have management positions of trust."

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
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