Friday, April 25, 2014

Investigating Grand Jury Aims at Dolan NonProfit

Illick's Mill
Northampton County District Attorney John Morganelli empanelled his fourth Investigating Grand Jury on April 25. Although their work is done in secrecy, their selection, or voir dire, is done publicly. This gives you an idea about what matters might be under review. Morganelli asked 110 prospective jurors whether any of them were familiar with any of a number of unsolved homicides or the Easton School District, subjects he had already discussed before. But then he quizzed them about their knowledge of the Gertrude B. Fox Environmental Center, known to most of us as Illick's Mill. He even canvassed them on their knowledge of Bethlehem City Council and its Parks Department. It's clear that this new Grand Jury, which began taking testimony as soon as they were sworn in by Supervising Judge Michael Koury, will be looking into possible mismanagement and conflicts of interest involving Bethlehem City Council member Karen Dolan and her connections to a nonprofit at the Mill.

Morganelli has used the Grand Jury before as a tool to expose mismanagement at area nonprofits. In January, a previous investigating Grand Jury issued a scathing report about the National Museum of Industrial History, calling it a "resting place for soon to be unemployed officials" at Bethlehem Steel. Executive Director Steve Donches resigned.

Why would an investigating Grand Jury want to review Fox Environmental Center? That nonprofit, like the National Museum of Industrial Steel, has been plagued by allegations of mismanagement. To make matters worse, its Executive Director, Karen Dolan, may have violated the conflict of interest provisions of the Ethics Act.
  • She voted to approve two City Budgets that included payments to her nonprofit, where she was a compensated Executive Director.
  • Late last year, she pushed for raises to Parks Department employees, who were providing her free services.
  • As Parks Chair, she proposed easing alcohol regulations in City parks, where her nonprofit was hosting as many as 20 weddings a year.
  • She used the authority of her office to block a new lease requiring her nonprofit to pay rent.
These conflict of interest transgressions are no minor matter. They formed the basis for the Bonusgate prosecutions under then Attorney General Corbett.

It all starts with Illick's Mill, one of the City's treasures. An old 1856 grist mill, it is the centerpiece of a park along the Monocacy Creek. This park was established by the FDR administration during the Great Depression. Today, that historic mill is known as the Fox Environmental Center. It's a nonprofit that, until recently, was under the direction of Karen Dolan. A member of City Council since 2006, she managed to snag an appointment as the Parks Committee Chair.

Between 2001 and 2009, Dolan worked to restore the old mill. She used a steady supply of labor in the form of Liberty High School students. After all, she was teaching there. Her husband was a teacher at Bethlehem Vo-Tech, and that school soon began helping with the project, too. The City of Bethlehem also provided a lending hand.

According to the nonprofit webpage, over $1.3 million was raised to restore the mill. How much of that is public money is anybody's guess. The most recent 990 (that's a nonprofit tax return) is from 2007. It lists at least $121,000 in public funding in that year alone. But what about subsequent years? Guidestar, an online repository for nonprofit financial records, has nothing beyond 2007. Where are those records?

Perhaps even more troubling than the missing 990s is that Dolan's nonprofit owed $128,000 to Bethlehem. It was reported that way in several city audits. Then suddenly, in 2012, it was just written off in a City audit with no explanation.

"We're not the National Museum of Industrial History," Dolan stated during a February interview at the Mill. "We've done everything by the book always."

When asked to provide the nonprofit tax returns, Dolan handed over financial statements, insisting they are just as good.

When pressed on the matter, Dolan admitted that her nonprofit failed to file 990s in 2008, 2009 or 2010. She blamed her accountant, although she was the Executive Director. She went on to say that, at one point, she even executed a Power of Attorney to her accountant.

Eventually, her nonprofit status was revoked by the IRS on 5/15/11. It remained revoked until 5/15/12. She had to re-apply for non-profit status.

Dolan insisted during this interview that she raised no money during this time period. But research reveals that in an August 15, 2011 interview with The Express Times, Dolan clearly was raising money during the time that her nonprofit status was revoked. She claimed to have a $170,000 budget, and was opening the Mill for weddings at $1,200 per event.

In the meantime, she ran up a $128,000 debt to the City for improvements to the facility that were supposed to be repaid from grant money. The City used a special account, its nonutility capital fund, for these improvements. This is borrowed money. This means taxpayers are on the hook for as much as twice the $128,000 spent.

Steve Antalics
"It looks like the money disappeared and no one seems to know," City watchdog Steve Antalics said at an April 15 City Council Finance Committee meeting. "This is our money. We want to know what happened to our money."

"Anyone care to answer that?"

Mayor Bob Donchez did, announcing that there were 90-pages of documents related to invoices owed by Dolan's nonprofit. They have recently been released to City Council.

One of those documents is a 2010 Memo from Parks and Public Works Director Ralph Carp to Dolan, concerning the $128,000 debt. Carp told Dolan there would be no additional services from the City until that debt was settled.

Another is a memo to the file, made by a Parks Department employee, after she was instructed to stop sending utility bills to Dolan's nonprofit.

The City not only wrote off the $128,000 debt, but began providing utilities at no cost to Dolan's nonprofit. This was contrary to the lease.

On City Council, Dolan has voted for two City budgets that included $11,000 for heating oil at the Illick's Mill. As a compensated Executive Director her votes appear to violate the Ethics Act. Section 1103(a) states, "No public official or public employee shall engage in conduct that constitutes a conflict of interest." The Act defines "conflict of interest" as the "[u]se by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated."

At the last budget cycle, Dolan also pushed for payraises for Parks Department employees. This raises the question whether this was some sort of quid pro quo for her special privileges.

In reaction to all the ethical questions surrounding the Mill, Mayor Bob Donchez recently asked his legal department to prepare a new lease for the Mill, one that would require some rent and a contribution towards utilities.

Dolan responded, "I will do everything I can to prevent this lease from going to Council,"  in an April 12 email to the Mayor.

After this email became public, Dolan resigned as Executive Director at the Fox Environmental Center, blaming politics.. But she is still on City Council and still chairs the Parks Committee.

Dolan, in February, claimed that her nonprofit was paying utilities. That appears to be untrue. There are numerous unanswered questions. Why did the City continue furnishing services after the 2010 warning? Did the Mayor let her off the hook? If so, why? Who made the decision to write off the debt? Who made the decision to begin supplying her free heating oil? Why was that decision made? Why did she suddenly start advocating for wage hikes in Parks?

Citizen activist Steve Antalics has previously called for a Grand Jury investigation into the mismanagement of the Fox Environmental Center (Illick's Mill) under the stewardship of City Council member Karen Dolan. His wish appears to have been granted. It will now be up to the Investigating Grand Jury to peel away the layers of the onion and find out exactly what happened..

35 comments:

Anonymous said...

Another Bethlehem official shown to be less than ethical. How much you want to bet the voters of Bedlam re-elect her. Just as they will re-elect all the incumbents.

It is the way in Bedlam.

Anonymous said...

It would be interesting to know how many if any Liberty and Votech students were forced to work there or their grade(s) would have suffered. Hoping some of them might come forward too as part of the investigation.

Anonymous said...

JM sacrifices Dooober to save his puppet Booby D. Norco dems seem to inbreed and then they eat their own.

hope they do a real investigation so they can show just how much stink there is on council and in the previous admin

Anonymous said...

It's what happens when people:

Lie
Cheat
Steal

Anonymous said...

why isn't council shown a monthly list of money owed the city? Probably more money stilled owed the city for city services from other organizations.

Anonymous said...

She's done. She just doesn't know it yet. She'll be ushered out soon. You can't have a city councilwoman under grand jury investigation and think she's going to accomplish anything any longer.

Every minute she's still a councilperson is another minute of pouring sunshine down the rabbit hole in Bethlehem. That's going to start making a lot of people very uncomfortable.

Anonymous said...

Wow, thanks for rewriting the same story over again!

Anonymous said...

This Grand Jury investigation isn't the same story. It's also about time an investigation was done.

Anonymous said...

Democrats can do whatever they want, whenever they want.

Because if you like your doctor, you can keep your doctor, period.

Bernie O'Hare said...

"Wow, thanks for rewriting the same story over again!"

This story puts everything together from several stories over the past few weeks and is being forwarded for publication.

Anonymous said...

It is truly clear that Ms. Dolan should be held accountable for these actions. Also her slamming of stay-at-home mom's was extremely unprofessional and down right immoral. She needs to resign from City Council...end of her story!

I agree with a grand jury investigation. It seems people in more powerful positions than Ms. Dolan are conspiring to cover this whole thing up. From a former mayor, a former legal aid and a current city director to the current administrations lack of cooperation...you don't need to be a Shakespearian Scholar to know "something smells rotten in the state of "Denmark/Bethlehem"

Anonymous said...

How can I get assigned as part of the jury?

Bernie O'Hare said...

Someone who would ask to be assigned would not be selected. It shows a bias. Jurors are randomly selected.

Anonymous said...

Just left Bethlehem City Hall and the rumor in the halls is that Ms. Dolan welcomes the Grand Jury investigation. She must like root cannels and colonoscopy's too!

Bernie O'Hare said...

She welcomed me, too, until I started asking her questions she did not like: her basic problems are dishonesty and a mistaken belief that she is better than everyone else in the room.

Anonymous said...

Nice work breaking this story and receiving no credit after sleepy reporters at two local rags purloined your work without attribution.

The grand jury is window dressing under pressure to do .... something. Regardless of the outcome, Morganelli has no requirement to, and will not, prosecute fellow Democrats. No way. No how. Not in this lifetime. After all, isn't he running for (fill in the blank)?

Anonymous said...

Democrats are above the law.

Republicans are racists.

It's all about good intentions and controlling the Lame Stream Media.

Furthermore, Democrats never eat their own.

Anonymous said...

2:49
Very witty. Very very witty.

Anonymous said...

I do not understand why exactly this non-profit is under investigation because the city decided not to charge for utilities and forgive an expense for improvements to a city/Bethlehem Authority owned preperty??

Bernie O'Hare said...

The nonprofit appears to have received preferential treatment bc its paid Exec Direct was a City Council member who engaged in conflicts of interest. The improvements at the Mill did benefit the City, but no City Council vote was taken that authorized this spending. City Council decides how to spend the people's money, not Karen Dolan or even the Mayor.

Anonymous said...

This reporting is why you continue to be an award-winning blogger. Maybe someday you can write why the city auditor(s)
did not catch this $120+
outstanding invoice? Also, isn't there an annual independent audit completed on the in-house auditor's findings to confirm all is well?

Bernie O'Hare said...

The auditos didpick this up and it had been noted several years in the independent audit. In fact, at least two years ago, Dana Grubb questioned it at a meeting. Dolan ignored him.

Bernie O'Hare said...

Thanks for the nice words.

Anonymous said...

Bernie O'Hare said...
The auditos didpick this up and it had been noted several years in the independent audit. In fact, at least two years ago, Dana Grubb questioned it at a meeting. Dolan ignored him.

Oh...

Bernie O'Hare said...

Actually, I should have looked into it then. It may have also been mentioned by either the ET or MC. I would swear that one of them had mentioned it, but can't find it now.

Anonymous said...

You had not quite seen thru the Council Person in question two years back.
Better late than never!
A lot of people at City Hall are losing sleep over this!!!

Anonymous said...

and you cover this story over and over , yet fail to write a word about former water rescue chief and husband of City of Bethlehem Asst fire chief being dragged away in handcuffs for theft from a non-profit.

Donchez supported this wife enough to nominate her for Fire Chief. Something smells

Anonymous said...

12:02
With lame ass friends like you it's no wonder these creepy pols are in hot water!
WTF!!!!!!!

Bernie O'Hare said...

an attempted deflection

Anonymous said...

I thought Callahan wanted her.

Anonymous said...

I have said for years that Karen Dolan is unfit for council!!! She needs to resign! For council president to not force her hand leads me to believe we will continue to have corruption! Bethlehem can do better then this!!!!

Anonymous said...

9:03, each council person is elected to serve by the people. If someone were forced to resign, that would be the very definition of the corruption you allege. The council president does not have the power to force a resignation.

Bernie O'Hare said...

Agreed that Wllie cannot force her to resign. He can and should remove her from the Parks Committee

Anonymous said...

Exactly how much is she compensated as executive director of this nonprofit ? We never seem to hear that number.

Bernie O'Hare said...

Her salary was supposed to be $24,000.