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Gulf Coast Jewish Family Services president faced internal inquiry

In the weeks before his ouster as president of Gulf Coast Jewish Family Services and subsequent suicide, Michael Bernstein faced allegations of fraud, embezzlement and sexual harassment, among other charges.

The allegations came not from law enforcement agencies but in "unsigned letters" brought to the attention of Bernstein's bosses, according to an e-mail obtained by the St. Petersburg Times.

The e-mail, which Bernstein sent to Gulf Coast's directors on Oct. 11, offers new details about the fall of a man who led one of the bay area's largest nonprofit social service groups.

Those details cast doubt on the account of his departure that Gulf Coast has so far provided. And from the long and rambling e-mail, there emerges a portrait of an embattled man eager to prove his innocence.

"It is quite shameful to think that so many I felt close to have lost faith and respect for me," he wrote. "What a sad legacy."

Friday, Gulf Coast acknowledged it recently investigated Bernstein but found no evidence of illegal activity. However, he did recently repay the organization a large sum of money.

Bernstein became president of Gulf Coast in 1978 and is credited with helping grow the agency.

The organization has roughly 700 employees working in 32 counties in Florida, including the bay area. It reported revenue of nearly $33 million in 2007, the last year for which federal records are available. About half the revenue came from governments; most of the rest from public donations.

News reports this month about a contract the nonprofit had with the state Department of Education were the first public indication that Bernstein's relationship with Gulf Coast was troubled.

The organization was hired to place mentally and physically disabled people in jobs. According to state regulators, Bernstein contacted them to say an internal review had uncovered problems with the contract.

The state launched an inquiry and found that, in some instances, Gulf Coast billed the state for having found jobs for clients but could not produce adequate documentation that the placements had occurred. The review also found some clients were placed in jobs the state determined were not appropriate.

Gulf Coast was ordered to repay $132,000 to the state, which it did in mid September.

State officials, who terminated the contract Oct. 14, said most of the problems were in South Florida. The review turned up no evidence of illegal activity, though the state said that possibility could not be ruled out.

When announcing Bernstein's resignation Oct. 14, Gulf Coast spokeswoman Lisa Brock said the departure was not linked to any finding of wrongdoing on Bernstein's part.

"When an organization has had the same leadership for several years," Brock said then, "it's sometimes just time for a change."

Bernstein's e-mail of Oct. 11, however, indicates he was ordered to resign or be fired, and that the leadership of Gulf Coast declined to honor unspecified details of his contract.

"Why?" Bernstein writes. "Even if I had the financial means I just don't have the mental strength to sue."

In the e-mail, he writes that he had been subject to anonymous allegations of fraud, embezzlement and sexual harassment, though the particulars of those charges are not specified.

Those making the charges had been interviewed by a man who described himself as a former FBI investigator, according to the e-mail, and were given assurances that Bernstein would not learn their names.

Responding to written questions, Brock said Friday that the group had sought Bernstein's resignation after learning of the allegations in July. She said the agency used an investigator who promised sources anonymity.

Brock said no evidence was found to support a finding that Bernstein stole money from the organization. The agency was paying him nearly $267,000 a year in salary and benefits.

However, she said that due to an administrative error, he had mistakenly been paid his annual benefits package twice recently.

On Aug. 31, she said, Bernstein repaid Gulf Coast $108,000.

Brock said Gulf Coast had been as open as possible about the circumstances of his departure, given terms of the confidential separation agreement he had reached with the agency.

But Gulf Coast has not been open enough for Andy Steingold, mayor of Safety Harbor and a Gulf Coast board member who resigned this past week.

Steingold said he respected the agency and its work, but the board acted with too little transparency. "In light of how they operate the board," Steingold said, "it's not something I want to participate in."

Bernstein, 57, was found dead in Valdosta, Ga., on Oct. 21, a week after his resignation was announced. He died in a Super 8 hotel room from a self-inflicted gunshot wound.

Gulf Coast Jewish Family Services president faced internal inquiry 10/30/09 [Last modified: Friday, October 30, 2009 11:33pm]
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