Questions raised about councilman's ex-charity

August 12, 2010 4:30:37 AM PDT
13 Undercover is investigating a Fifth Ward charity and its financial ties to Houston City Councilman Jarvis Johnson. The councilman's been avoiding our cameras. We revisit the scene of his arrest in June, which happened right outside the charity he used to run. Councilman Johnson says any suggestion he personally benefited from his charity after he joined City Council is unfounded.

But here's why we asked.

When Johnson showed up in court last week, his council aide, Alvin Byrd, was walking right next to him.

"Any comment about this latest step in the procedure?" Eyewitness News asked.

"No, no comment," Johnson responded.

And the councilman still won't say what he was doing in a car at night, alone with female council aide Candace Hurt.

"If anyone was to make an allegation that something inappropriate was going on between Councilmember Johnson and that individual employee, then clearly, that's something that would be looked into," Houston City Attorney Dave Feldman said.

The councilman did say it wasn't unusual for aides to accompany him to events, and that's why we asked for the councilman's official schedule.

Only one event is listed for the night in question, and even that event was scheduled to end hours before Johnson was stopped with his council secretary.

He now says he has unscheduled events that are never put on his official calendar.

On other nights, we found events listed on the councilman's calendar we know did not happen. Hurt is paid to schedule events.

Councilman Johnson stopped for flashing police lights outside the offices of a Fifth Ward youth charity he used to run.

Johnson says he hasn't been affiliated with Phoenix Outreach Youth Center for five years, but the place was familiar to him -- and familiar to us, too.

"Don't you think the public has the right to hear from you?" 13 Undercover asked Johnson.

He didn't answer.

We caught Phoenix Outreach exaggerating the number of kids enrolled in its after-school program years ago, while Johnson was running it.

The city stopped doing business with Phoenix after an audit, so the councilman's arrest right outside the place made us try to take a new look.

The district attorney's office ordered Phoenix to show us their records or face possible criminal penalties. A day later, the charity treasurer, Emily Barriere, resigned. She was one of the women behind Councilman Johnson at his post-arrest press conference, and she signed the most recent charity tax return.

"It's just phenomenal that someone actually signed those tax returns," CPA Robert Martin said.

We focused in on a payment of more than $80,000 we saw to a consulting company called RLH, which only helped manage the charity's day care operations.

Phoenix's charity records show the company was hired on January 7, 2006 -- one day before Johnson's official resignation was accepted. RLH had been in business for just a week.

Now, let's look at Councilman Johnson's required City Hall financial disclosure. The company was there again; state records list Johnson as president.

Among the three members of the Phoenix charity board who voted for the deal were Barriere and Byrd -- yes, the top aide to Councilman Johnson.

The IRS requires charities to tell them when key former employees make money from the charity.

"If there are transactions between related parties, they want to make sure that the public was not cheated and that the charity was not cheated," Martin said.

The Phoenix tax return does not disclose that the directors of RLH are Councilman Johnson and his sister.

"It is missing a number of required disclosures," Martin said.

It's not the only charity transaction we've followed, because the donations were all about the children of the Fifth Ward.

Take the Houston Rockets.. They gave $170,000 to help build a house for the Fifth Ward kids to play in after school.

Johnson was still in charge when the charity sold it to his sister for half of what the tax rolls said it was worth -- $118,000. It was a questionable deal then. The district attorney investigated, but the deal had been approved by the Phoenix board.

"It was a very sweet deal on the surface," Martin said.

And the way the deal was done, in the end, Johnson's sister, Valeka Hines, could end up owning the entire place for just an investment of $18,000.

At the time, the public was told some of the money raised would be used to fix fire code violations so the kids could keep using the place as a youth center.

Five years later, Johnson's arrest happened, which reminded us to check back.

The remodeling never happened. Phoenix says it was too expensive to do, so kids can't use it today.

All the while, RLH has been paid handsomely by that very same charity -- since January 2006, more than $300,000.

Is that leading by example?

And just one day after we asked to see the charity's financial records, RLH filed papers in Austin to remove Councilman Johnson's name from the corporation.

Maybe it was just a coincidence.

"Can you tell us about your charity -- your old charity? We just want to talk about your charity," 13 Undercover asked Johnson as he was in his car. He drove off.

This is a continuing 13 Undercover investigation. You can see the previous reports by clicking on the links in the "Related Content" section of this story.


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