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Castor seeks to revoke troubled nonprofit group's federal money

TAMPA — U.S. Rep. Kathy Castor has asked federal housing officials to revoke a $500,000 congressional earmark for a Tampa nonprofit group with a history of failed projects using government money, legal problems and questionable business dealings.

Castor, D-Tampa, along with Republican U.S. Reps. Gus Bilirakis and C.W. Bill Young, and U.S. Sen. Bill Nelson, a Democrat, requested the money last year for the Central City Community Development Corp., headed by David Foster.

Foster said he wanted the money for a huge Tampa project called Veterans Commons. It is supposed to provide housing to homeless veterans, give mentoring to at-risk students and put 400 people to work.

But Castor sent a letter asking the U.S. Department of Housing and Urban Development to stop the funding after the St. Petersburg Times published a report last month detailing Central City's legal and financial problems.

Based on the Times article and "my personal review of the matter, it would appear that no monies should be disbursed to the requestor," Castor wrote. "I am requesting a HUD review of the project, and would appreciate your apprising me of the options available to ensure that the monies are not disbursed."

HUD officials responded earlier this month, noting that no money would be released until the agency receives a grant application and evidence that Central City can meet grant requirements. No application has been submitted yet.

Peter Kovar, HUD's assistant secretary for congressional and intergovernmental relations, promised to review the application and "revisit the issues outlined in the news article with the recipient in order to assess their ability to comply with all the applicable grant requirements."

Congress can also amend the 2010 federal Appropriations Act to strike the earmark or redirect it to another group, he said.

A Castor spokeswoman declined to comment on the options, saying the letters speak for themselves.

Since 2002, the Central City Community Development Corp. has received $560,000 in federal and state grants to develop seven properties as affordable housing in one of Tampa's poorest neighborhoods. All the properties ended up in foreclosure, and Foster is being sued for fraud and breach of contract.

Tax records and court documents show a number of problems involving his organization:

• It paid more than $8,400 in back taxes on a board member's home.

• It bought properties from Foster's roommate, Francis Roy, and Roy's sister, paying $140,000 more than the two had paid for them one year earlier.

• The IRS has two liens totalling $22,457 against the corporation for unpaid payroll taxes.

• Two properties were sold to its board chairwoman, Joni Stewart.

Foster dissolved Central City in October, citing the bad economy. Weeks later, he established the nonprofit Veterans Commons Community Development Corp. and the for-profit Veterans Commons Development Corp.

The Veterans Commons project has the backing of several bay area veterans organizations.

Paperwork has been filed with the city to rezone property at 2612 Tampa St. in Tampa Heights to pave the way for Veterans Commons. Foster hung up on a reporter seeking comment for this article.

Nelson, Bilirakis and Young say they are confident that HUD officials will carefully review Central City's qualifications once its grant application is submitted.

"No funds will be released until the Department of Housing and Urban Development ensures that the project meets the most stringent standards. Moving forward, I will continue to closely monitor the project to ensure taxpayers' dollars are used wisely," Bilirakis said in a statement.

A spokesman for Young's office said the congressman continues to meet with the veterans group associated with the project to follow its progress.

Members of Congress every year forward thousands of requests for earmarks to appropriations committees, and Congress awards billions of dollars to private companies, nonprofit groups and government contractors with little vetting and no formal oversight.

In the 2010 budget alone, there are 9,500 earmarks. They are expected to cost taxpayers about $15.9 billion, about one-half of 1 percent of the federal budget.

Janet Zink can be reached at jzink@sptimes.com or (813) 226-3401.

Castor seeks to revoke troubled nonprofit group's federal money 06/20/10 [Last modified: Sunday, June 20, 2010 10:05pm]
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