Upside Allentown Facade Grant Program Being Abused

Shelby Edwards and her partner, James Whitney, operate a photography studio and marketing firm called Little Drill at 1122 Hamilton in Allentown. They were awarded a facade grant by Upside Allentown, administered by one of Alan Jennings many subsidiaries. But the grant was revoked because they refused to use the color that Peter Lewnes, one of Jennings' subordinates wanted them to use. Instead of going away, they did some research and uncovered what can only be described as a rotten system infested by insider dealing. "Every time yuou peel back the onion,it gets stinkier and stinkier," Whitney tells me.

Below is their executive summary. I will follow up Friday with a spreadsheet showing the abuse. On Monday, I will give you Jennings' rather haughty response. His complacency and defense of this nonsense is an indication he needs to resign.

Recently, we were awarded a facade improvement grant by Upside Allentown, which is administrated and managed by a publicly funded 501c3 charity called the Community Action Development Corporation of Allentown (CACDA). To make a long and complicated story short, our opportunity to take advantage of the valuable grant was revoked due to the fact that we were not willing to allow Peter Lewnes (of CADCA) to paint our building a very particular shade of dark grey — which he insisted was the only color acceptable to the program. Eventually we discovered that the guidelines Peter had been citing to seize control of our project were complete fabrications; and when it became clear that CADCA was unwilling to work with us to find a solution and reinstate our grant we decided to conduct an independent audit of the grants that had already been furnished, (and didn’t fall apart.)

What we found in our independent audit was shocking: in the first year of the program the grant was awarded over and over to insiders and individuals described by the IRS as “private shareholders.” According to the IRS, "A private shareholder or individual is a person having a personal and private interest in the activities of the organization.” These private shareholders included Christian J. Brown (city employee and President of the Old Allentown Preservation Association) Miriam Huertez (Upside Allentown Steering Committee member) Rebeca Torres (Director for Upside Allentown and Principle Officer for CADCA) and of course, Peter Lewnes himself. To our disbelief, Rebeca Torres actually received the grant not once, not twice, but three times in 2015 and then a fourth time in 2016. In addition to these insiders, the ranks of the facade grant recipients also included wealthy investors, absentee landlords, and even a former catholic priest named Bernard A. Flanagan who was dismissed by the Arch Diocese of Allentown after pedophilia allegations against him were deemed credible.

In addition to being private shareholders, Christian J Brown, Rebeca Torres, Miriam Huertez, and Peter Lewnes also meet the criteria for what the IRS considers “disqualified persons.” When a disqualified person is awarded a grant, that grant is considered an excess benefit and (according to the IRS) must be repaid in full, with interest, to the tax exempt organization. According to the law, every single tax-payer funded grant that Upside Allentown or CADCA has awarded to disqualified persons or private shareholders must be paid back in full so they can be reallocated in a way that is in harmony with CADCA's publicly filed purpose statement.

When we presented this information to Alan Jennings, the Executive Director of CACLV (CADCA’s parent organization) in a sit-down meeting on 7/23/18 and during a 30 minute telephone call on 7/28/18, he justified our findings by claiming that the grants were not being awarded to people, but rather to properties deemed to be prominent and which they believe would have the greatest economic impact on the community. This argument only accomplishes to make the facade grants — like the one awarded to 433 1/2 N Howard St — seem even more suspect. 433 1/2 N Howard St is owned by long time friends and artistic colleagues of Peter Lewnes. The property, which received the facade grant in 2017, is located on a short, secluded side street with only 7 homes that are all on the same side of the street, and 3 of which are owned by the grant recipients. Due to how small the home is and how narrow the street is, the facade itself cannot be fully appreciated unless you're standing directly in front of it. Surely this residential facade is not contributing the economic development of anything other than the personal finances of its owners, who are now renting out 433 1/2 N Howard St for $1,100. Meanwhile, during the same application season when this grant was awarded, Rosalie DeSilva (a small business owner with one property on Hamilton St, where she lives and works) had her application denied without explanation.

Even if these clear conflicts of interest didn't exist, there's another legal issue that arises from CADCA’s decision to prioritize properties over people:

Every 501c3 public charity is legally required to publicly file a purpose statement with the IRS. Purpose Statements vary from charity to charity, but they all basically explain two simple things: first, they explain what the charity hopes to accomplish; and second, they outline what actions the charity will take to accomplish that goal. These Purpose Statements are used by individuals, organizations, and public municipalities to determine whether or not they'll donate funds to any particular charity or non-profit.

This being considered, it's easy to understand why these Purpose Statements are so important and why they're required to be filed with the IRS, and also why they're legally required to be adhered to as a condition of maintaining a 501c3 status. Moreover, Purpose Statements are also crucial to ensure Directors and Officers fulfill their fiduciary duty of obedience.

To be clear, it's the legal duty of every non-profit 501c3 to adhere to its own Purpose Statement.

According to CADCA’s website, "The mission of CADCA is to assist and promote neighborhood revitalization and community spirit by providing access to economic opportunity, creating and sustaining businesses owned and operated by neighbors, and empowering people to have a voice in the decisions that affect their lives.” We don’t mean to patronize, but how is it possible to provide someone access to something they already possess? The answer to that rhetorical question is why ticket scalpers typically choose to work outside of venues rather than inside. So when CADCA awards charitable grants to wealthy Real Estate investors, they are, in fact, not adhering to their own Purpose Statement. When CADCA awards Facade grants to absentee landlords, instead of the neighbors they claim to advocate for, they are not adhering to their own purpose statement. And when CADCA cites fictional HARB guidelines in order to silence the voices of property owners (like us) not only are they being cruel, they’re also failing to adhere to their own Purpose Statement.

This is quite obviously a problem. The City of Allentown has given Upside Allentown and CADCA millions of dollars based on its Purpose Statement; and as a city, we are not in the financial position to spend a single penny if we aren’t absolutely positive of where it’ll end up. We need Alan Jennings to hold his staff accountable, not only because CADCA’s actions over the past 3 years have put their 501c3 status in jeopardy, but also because they’ve put in jeopardy a special type of public trust that drives charitable giving and makes this country a better place.