TRANSCRIPT: D.C.

’s 17-Year-Old Charitable Trust Bankrupts

Aaron Davis Reporter, The Washington Post

Brenda Donald Deputy Mayor for Health and Human Services, District of Columbia
Andria Tobin Executive Director, Kid Power Inc.; Member, DC Alliance of Youth Advocates
(DCAYA) Board of Directors

Kojo Nnamdi: Established in the late nineties by then Mayor Anthony Williams to
leverage public funds to raise private dollars for youth services, the DC Trust has, at its
best, done that. But, at its worst, it has been plagued by scandal. And now it’s heading
for dissolution, as the accounts are bare. Here to explain what’s going on is Brenda
Donald. She is the Deputy Mayor for Health and Human Services in the District of
Columbia. Brenda Donald, thank you for joining us.

Brenda Donald: Thank you, Kojo, for having me.

Mr. Nnamdi: In an ideal scenario, when things are working properly, what’s the role of
the DC Trust in relation to the District government and to the citizens of the District?

Ms. Donald: Well the Trust was envisioned as an intermediary organization that would
be a partner to the District government, would help to leverage and raise private funds
and then support the work of nonprofit organizations who were focused on youth
development, afterschool programming, and that sort of thing.

Mr. Nnamdi: What is meant by “raise” and “leverage” funds?

Ms. Donald: Right. Well, I was with the organization DC Agenda, that is no longer in
existence, that helped to start the Trust, working with then Mayor Williams. And at that
time, if you will recall, the city was under a receivership, and there was not a lot of
confidence by corporations or foundations in giving money to the District government.
And so the Trust was seen as a safe place, a credible organization that could raise
private dollars. And then the city could also contribute funds, so that there was more
money that would go to programs that nonprofit organizations could run.

Mr. Nnamdi: Just so I fully understand how that worked, if the city puts money into the
Trust, can the city then go to private organizations or private individuals and say “Look,
we have committed to this Trust, we know the nonprofits that will be able to help kids
under this Trust, so if you’re looking around for some place to put money, if you’re
looking to help kids in the District, this is where to put it.” Is that what is meant by
“leveraging” funds?
Ms. Donald: Yes, I think that’s a really good way of describing it. But not just the city
would be able to raise money, but the Trust itself was expected to be able to knock on
some doors and say, “Wow, we’ve got this wonderful organization, we have a
partnership with city government, and we think that this is a good place to invest in, to
support the work of community based organizations.”

Mr. Nnamdi: Also joining us in studio is Aaron Davis, he’s a reporter for the Washington
Post covering DC Politics and government accountability. Aaron, good to see you.

Aaron Davis: Thanks for having me.

Mr. Nnamdi: The promise of the Trust aside, it has been plagued by scandal, most
notably perhaps, the former Councilmember Harry Thomas. To what end did he use the
Trust, remind us?

Mr. Davis: Well, this is back as he took office in 2007, 2008. He was kind of diverting
some of the funds that were supposed to go to a baseball program, and ended up using
that pretty much straight for personal gain, purchase of an SUV, of a motorcycle, of
travel. I think there was a fancy pair of shoes in there, something. He received a thirty-
eight month federal prison sentence for that. I think what the Deputy Mayor described is
exactly how this whole thing was supposed to work. The problem is it really has never
quite worked that well. Or if it has, it’s been for brief spurts and there’s been so many
ways for this to go wrong. The nonprofit itself...think of it like a Rorschach test,
everything you think about DC, like with the problems with the Council, the problems
with the Mayor, the problems with the murky way things are funded, you can find
enough blame here to go around, there wasn’t good oversight a lot of times, there
wasn’t a clear direction from the Mayor of how this should be used, it was shifting. And
now we’re learning that the audits of this done by outside auditors, and the way that this
fund was being used, really wasn’t how we thought.

Mr. Nnamdi: The Thomas case wasn’t the only sign of trouble. There was a
Congressional investigation in 2013, was there not? Did that lead to additional
oversight?

Mr. Davis: Well that led to a big part of the Trust work being offloaded. So this was all
the DC Opportunity Scholarship money that came in for vouchers, and the DC Trust did
administer that. And they said it was doing a poor job of managing that money, seeing
where it was going; too many students going into one school and money being used to
prop up one of these schools. And so they did move the Opportunity Scholarship fund
out of that. You could say that part of what we’re seeing now, the end of the Trust, you
can trace it to Harry Thomas Jr. and the fact that nobody really from the outside wanted
to put money into the Trust after that. They weren’t sure it was really going to be used
the way they thought it was going to be, and also the loss of the Opportunity
Scholarship money. You could see that there were some underlying problems in the
finances, there was a lot less money to go around, there was twenty million dollars
flowing through this Trust during that Opportunity Scholarship period.

Mr. Nnamdi: And what does this mean to the nonprofits who are the ones who are in
direct contact with the at-risk children who are supposed to be benefitting from this?
Joining us in studio is Andria Tobin. She is the Executive Director of Kid Power. She
also currently serves on the board of directors for the DC Alliance of Youth
Advocates.Thank you for joining us.

Andria Tobin: Thank you for having me.

Mr. Nnamdi: Your organization is one of a number that will be affected by this. Tell us,
exactly, what Kid Power Incorporated does.

Ms. Tobin: Kid Power is a nonprofit here in the District. We’ve been serving DC youth
for approximately fourteen years. We provide afterschool and summer programming to
about four hundred and twenty-five students.

Mr. Nnamdi: What kind of afterschool and summer programming?

Ms. Tobin: Our focus is on academics, health & wellness, and civic engagement, really
focused on leadership. So giving young people the tools that they need to become
informed, engaged advocates for change in their own lives and in their communities. So
as we know, young people face tremendous obstacles here in the city, and we think it’s
not just important for us to address those immediate, but give our young people a sense
of agency to help create a stronger District.

Mr. Nnamdi: How will what’s going on affect your organization and what value do you
think would be lost if the kind of work you do goes unfunded?

Ms. Tobin: I think there’s short term, medium term, and long term effects that this will
have. I think most nonprofits and current grantees funded by the Trust are most
concerned about current grant commitments. So we are one of many grantees still
awaiting payment on services already rendered for young people in the District. We
have been reassured by the Trust and by city Council that those funds will be paid out.
But there’s a lot of concern for the allocation for FY17, which was to go to the Trust. The
nonprofit community was getting ready to make a push for more funds, and now we’re
worried about protecting what was allocated. So we want to make sure that there’s a
really thought out plan to make sure those funds are protected for many nonprofits and
youth in the District, one that is collaborative and strategic, and is flexible and innovative
in the way that the Trust was designed to be.

Mr. Nnamdi: If you have questions or comments give us a call at 800-433-8850. Have
you done business with the DC Trust in the past? Tell us about your experience, 800-
433-8850. You can send email to “kojo@wamu.org”. You can send us a tweet at
“kojoshow” or go to our website, “kojoshow.org”. Ask a question or make a comment
there. Brenda Donald, you are on the Trust board. When did you first have a sense that
the bottom was falling out of this thing, that bankruptcy was imminent? Was there any
discussion among you and your fellow board members about how to try to stop it, or is
letting it dissolve and starting over the better option, as you saw it?

Ms. Donald: A number of things unfolded over the past few months, and I do serve in
an Ex Officio capacity on the board. When I came in as Deputy Mayor under Mayor
Bowser, I started taking a closer look at the Trust and the city’s partnership with the
Trust, and how we manage our oversight and the cost for administering funds. And so
we were already looking at restructuring some of that, in terms of some of our program
areas. But there were a lot of things that came to light when the former Executive
Director resigned. And we then hired an independent accounting firm to come in and do
a forensic accounting of the books. A new Interim Director came in and really started
looking at operational costs. But I think the most important thing, to go to Andria’s point
and to Aaron’s point, is really our focus going forward. First, I want to clarify when
people say “the programs funded by the Trust”. Well, the programs are really funded by
the city. And the reality is-

Mr. Nnamdi: Through the Trust.

Ms. Donald: Through the Trust. And so the commitment of the Bowser administration is
that we will honor all commitments to existing grantees. In fact, we even asked the Trust
to administer funding for the summer programs, and that process is underway. We will
do that for the rest of the fiscal year sixteen, which goes through September thirtieth.
We are working with the Trust to have a small core team of staff that stays on board, so
that we can responsibly complete the commitments for this year. Mayor Bowser has in
her budget 4.9 million dollars for Trust programs for Out-of-School Time and summer
programs, for the first time all put in to the budget at the beginning of the year. And I
and the rest of the administration are advocating for those funds to continue. The other
thing is that we’ll be working this summer, really over the next couple of months, with
stakeholders, providers, and advocates to come up with the best strategy for going
forward. And, as Andria mentioned, it will be strategic, it will be collaborative. And I think
we will find a better way forward, and certainly the city will do its due diligence in terms
of what we want, what we’re investing our money in, in terms of accountability and
oversight.

Mr. Nnamdi: Well frankly, despite all the talk about going forward, some of us are
concerned about why we’re not looking back, to see exactly what happened here.
Colbert King in the Washington Post Op-ed this past weekend raised that issue. Aaron,
many hoped or thought that the group had weathered the storm. But now that we
learned that the Trust is essentially out of money, what’s your understanding of that
happened and who the heck is responsible?

Mr. Davis: Well, I think you do look at how this has been funded. So the expectation
was always that some of the money would come from the outside and some of it would
come from the city. And really, since Harry Thomas, the city’s had to fund almost all of
it. And they’ve never really put the amount of money up front, in any given year, to do
so. And so there’s been little bits of money, as the city finds a little extra here or there,
there’s been a little bit pushed over to the Trust. And this has happened to the tune of
several millions of dollars a year. And so you don’t have a lot of direction of how this
money is supposed to be spent. And that’s a question the past administration is going to
have to answer for a little bit. I also think that the Council oversight...I’ve gone back and
looked at last year’s hearing and some of these issues were raised a year ago in front of
the Council. I think Andria can tell you, because she’s been to more of these hearings
than I have been, but these are not new issues to anybody looking closely at it. And so
there is some fault with the Council. There is some fault with the Administration. There
also is...obviously it’s Ed Davies who’s the former Executive Director, who’s now gone,
and Earl Hamilton, the former CFO. So Ed resigned in January, was moving on to a
different job and the day he’s leaving, the board finds this personal loan on the books to
him. And start looking at this, and there were expenses he put for an airline ticket, for
travel. Things had been done with the organization credit card. That kind of stuff that
was happening, they’d been paying tens of thousands of dollars a month for their lease
on-

Mr. Nnamdi: Twenty-six thousand dollars a month?

Mr. Davis: Yeah. And so there were a lot of ways they could’ve been saving money that
they weren’t. And so, was the board really taking a critical look? Were they privy to this
information? Was the Executive Director more empowered than he should’ve been?
There’s a lot of questions still, to be honest.
Mr. Nnamdi: Frankly, Harry Thomas Jr. may have been the canary in the coal mine.
Andria, when and how did you learn about the Trust’s plan to essentially declare
bankruptcy? Or did you hear the rumblings before?

Ms. Tobin: I think I speak for a lot of people that we were surprised in the immediacy,
but then in general not surprised. These issues have been raised year after year. I can
remember sitting with Jim Graham who, year after year, brought up rent, who brought
up certain appointees to the board that maybe shouldn’t have been there. These issues
have been going on for a long time. But unfortunately, we did find out right away by the
Post. And I think the Trust scrambled to get the message out, more thought out, and I
think they did a good job of at least doing that. But these issues have been going on for
a long time and, like Aaron said, I don’t think you can put the blame on any one thing.
But we can look back and see some structural issues. We can look at other cities, other
best practices, to find a way that the government can continue to support its young
people through an intermediary that, perhaps, doesn’t open itself to some of these
issues with being non-transparent and having some undue influence.

Mr. Nnamdi: Got to take a short break. When we come back, we’ll continue this
conversation. If you’ve called, stay on the line, If you’d like to, the number is 800-433-
8850. Do you think the District should completely rethink the way it administers funding
for programs for at-risk kids? 800-433-8850. What kind of model would you look to? You
can send us a tweet at “kojoshow” or email at “kojo@wamu.org”. I’m Kojo Nnamdi.

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Mr. Nnamdi: Welcome back. We’re talking about the DC Trust, which provides funds for
nonprofits that help at-risk kids in the District. We’re talking with Brenda Donald, Deputy
Mayor for Health and Human Services in the District of Columbia; Andria Tobin, who’s
the Executive Director of Kid Power Incorporated, she also currently serves on the
board of directors of the DC Alliance of Youth Advocates; and Aaron Davis, he’s a
reporter for the Washington Post, covering DC politics and government accountability.
We have not mentioned the DC Alliance of Youth Advocates, what does that do?

Ms. Tobin: It’s a member coalition serving over a hundred and fifty nonprofits in the
District, working to support best practices and policies for a youth-friendly DC, around
the issues of expanded learning, out-of-school time, youth homelessness, and
disconnected youth.

Mr. Nnamdi: And Aaron Davis, I was talking earlier about who is going to be held
accountable for this. In that regard you have some, what might be, related news.
Mr. Davis: Yeah, we’re going to be break a tiny bit of news for you on the Kojo Show.
Ed Davies is no longer gainfully employed, as I understand it, in Chicago. The nonprofit
that he went to go work at there, MHA Labs, I had contact with the company yesterday.
His bio page was taken down off the-

Mr. Nnamdi: He was the Executive Director of the Trust. He was the Executive Director
who used the Trust credit card for personal expenses, and said he, however, repaid
those expenses.

Ms. Donald: And Kojo, if I could chime in-

Mr. Nnamdi: Please, Brenda Donald.

Ms. Donald: When we found this out, we immediately requested an investigation by the
Inspector General. So there is an investigation underway. We want to make sure that,
we’re not the experts in terms of who should be held accountable for anything legally
but they are, and they will conduct that investigation.

Mr. Nnamdi: It’s my understanding that just prior, a few days before Aaron’s story ran,
the Trust issued requests for proposals for summer funding. Which group, agency, or
organization is going to be responsible for overseeing that work, in the short term?

Ms. Donald: Well, as I said earlier, we’ll have a small core team at the Trust that I will
be managing that group to administer the summer funds, and to ensure that the
completion of the Out-of-School Time grants are done, and the mini-grants and the
other ongoing work for this fiscal year.

Mr. Nnamdi: We got a post on our website from Ken who said, “Between the board
members from the Mayor’s office, area experts in banking and law and from DC think
tanks, should be able to resuscitate a $5 million trust fund, why isn’t this agency in the
financial ER getting CPR, when all the best doctors are standing right there next to the
platform [sic]?” What’re you trying to put together now?

Ms. Donald: Yeah, I think too little, too late, in terms of the Trust, that structurally their
budget was so unbalanced and their inability to raise private dollars and just relying
totally on city dollars just made the decision for the board, it was a tough one, but to say
we really need to close up shop and look at another way.

Mr. Nnamdi: On to Sarah in Montgomery County, Maryland. Sarah, you’re on the air.
Go ahead please.
Sarah: My comment has everything to do with what she just said about an ability to
raise private dollars. I’m incredulous that I just heard on the news this morning how
many millions of donated dollars these political candidates can raise, yet you can’t get
people to donate to help our children, who are our future? Why don’t you just hire one of
these people that are raising all this money for these candidates, to raise money for the
children? It just boggles my mind that politicians are more important to people’s pocket
books than their own children.

Mr. Nnamdi: Well, as far as I know, Brenda Donald has not ever run for office in the
District of Columbia-

Ms. Donald: Not my forte.

Mr. Nnamdi: -so she can’t tell you about campaign funds. But Aaron Davis, the caller
says “Look, politicians are great at hitting up on people for money for their campaigns.
Why can’t they hit up on the same people to help at-risk kids?” The answer is, they
probably do.

Mr. Davis: Honestly, I mean this is something I’ll have to pay a lot of close attention to,
going forward, because this is the problem you don’t want to have. You don’t want to be
in a position where you’re allowing such a fund to be used for political kickbacks for
people who do give donors, or people who are friends of the politicians in power. So if
all this work is moved inside the Mayor’s office and millions of dollars are being sent out
directly by the Mayor’s office, you do have to then put it through that prism and hold all
that accountable in that way, as well.

Mr. Nnamdi: Well some criticism has been raised that unfortunately the directors of
these programs have been political appointees, rather than people who were put in
those positions because of their expertise and financial management or their experience
with nonprofits. To which you say what, Andria?

Ms. Tobin: Well, just speaking for dealing with my own board, every line item is
scrutinized that I spend. And so I think our board has to be intentional. Do we need
more lawyers? Do we need more consultants? Do we need more educational
professionals? So that the board is really meeting the nonprofit’s needs. And
unfortunately, if that’s not the case and they’re just appointed without that really
intentional process, I think you open up the doors to potential ethical violations.

Mr. Nnamdi: We’ve hosted a lot of conversations about the nonprofit world. We’re a
part of it ourselves, here at WAMU. So we know how conscious donors are of questions
about overhead and good stewardship practices. As someone who leads a nonprofit,
what are your impressions of how the Trust was established and run as a nonprofit?

Ms. Tobin: I think that how the Trust was set up to be able to leverage public dollars to
raise additional private dollars is something that every nonprofit does. We protect the
city’s investment as a nonprofit organization by bringing in private dollars. But I think
how that’s transpired has led to an unfortunate lack of transparency and possible
corruption, which is a real shame. I read in the Post about, and this is something I was
unaware of, about travel expenditures and misuse of credit card. And so those monthly
statements should be reviewed every month, as far as I’m concerned. We’re a lot
smaller, so I field questions like, “Why did we spend a hundred dollars on Survey
Monkey?” But I imagine there could’ve been a little more oversight into their finances.

Mr. Nnamdi: Aaron, some think the Trust was set up to fail or allowed to continue to do
so under previous administrations. How so and what ultimately do you anticipate will be
the way forward on this? We know that in the short term, Brenda Donald’s agency is
going to be overseeing this, but what do you see?

Mr. Davis: Well, it’s a good question, and actually Brenda’s the one to ask. She’ll have
a lot of power over how that will happen. But probably more of this will get segregated
out into different parts of the government. Some of the education money could be put
under the Deputy Mayor of Education, some of it may be better spent -- you know
there’s a whole package of grants that the Bowser Administration just put out last fall for
public safety and at-risk youth, in the wake of the huge homicide spike last year. So
who’s the best person to be looking at that money, and who’s the best person to be
looking all the afterschool money. And I do think, whatever you do, it should be more
continuous and continuity in the funding, because stories of, just for this summer, these
programs will have only about a week’s time to figure out, once they get the money,
how they can start running the program a week later. And can people pay rent from one
year to the next? It’s not clear for a lot of people who are depending on this money from
the city.

Mr. Nnamdi: Brenda Donald.

Ms. Donald: I don’t always agree with Aaron but I agree with his assessment here. So
this gives us an opportunity to just figure out the best way forward, what makes the
most sense, what does the city want in terms of its resources. And to Andria’s earlier
point, it’s got to be done with greater accountability and transparency. And we will be
doing this with our partners, and we will consider a number of options and then develop
a plan to go forward.
Mr. Nnamdi: Brenda Donald is the Deputy Mayor for Health and Human Services in the
District of Columbia. Thank you for joining us.

Ms. Donald: Thank you.

Mr. Nnamdi: Aaron Davis is a reporter for the Washington Post, covering DC politics
and government accountability. This story is not completely written yet.

Mr. Davis: No, there’s still some more to do. We will be trying to look back and unpack
what happened with greater detail. And there’s a series of audits and investigations, and
pretty much everybody with investigative authority in DC is looking at this in one way or
another, at this point in time. I think you’ll probably have something from the Attorney
General, the DC Auditor, the Inspector General. So those are all yet to come. And when
we do get a clear picture of how much money was being used on these personal credit
cards or for personal expenses, that could drive a lot of the discussion about whether
this was just mismanagement or something a bit more sinister.

Mr. Nnamdi: Andria Tobin is the Executive Director of Kid Power Incorporated and
serves on the board of directors for the DC Alliance of Youth Advocates.Your work, you
think, goes forward.

Ms. Tobin: Absolutely. We’re confident the city cares about its young people. We know
the issues they face, the young people in our city face, are very complicated and
complex. And we’re very happy to be part of a collaborative effort to make sure that
their holistic needs, academic, social, health, are being met. And we’re confident the city
is going to invest in that.

Mr. Nnamdi: Thank you all for joining us.