Tevlin: If only Community Action of Minneapolis had taken some of its own advice

Community Action of Minneapolis has a precious tagline in what appears to be a mission statement on its website.

"The philosophy of eliminating 'the paradox of poverty in the midst of plenty' remains the key concept that motivates CAAs today," the website said.

Sounds like the agency should have started eliminating that paradox inside its own offices first.

According to an audit by the state Department of Human Services, leaders of the nonprofit used taxpayer money to pay for a celebrity cruise and trips to Palm Beach and the Bahamas, and spent public money on bonuses, golf, spa treatments, furniture, alcohol and a personal car loan.

The personal car loan was for the CEO, Bill Davis, who also got paid a $273,000 salary (one of the highest in the local nonprofit world, while he oversees a relatively small agency). I note that the agency offers "financial literacy courses" to help people learn to do a budget. A guy who makes nearly $300 grand and still needs a car loan from his nonprofit might want to sit in on the course.

Leaders and former board members might also want to take advantage of the "free legal advice" offered the second Wednesday of every month by the agency, because they might need it by the time this thing is over.

Three prominent DFLers were on Community Action's board at the time of the audit: U.S. Rep. Keith Ellison, state Sen. Jeff Hayden and Minneapolis City Council President Barb Johnson. All sent proxies to board meetings, and all said they never looked at the books. Hayden's proxy was his wife, which turned out real nice, especially when it came to the mani-pedis at Arrowwood Resort.

By Tuesday, Hayden had already thrown Davis under the bus and Ellison had resigned from the board.

Here's the deal: If you are going to pad your résumé by appearing to be on a board, you have to take responsibility for the actions of the agency. You can't let a nonprofit trade on your name as a public official, then when something bad happens offer plausible deniability. Board members should have a fiduciary responsibility for the agency they oversee.

"Absolutely," said Kate Barr, executive director of Nonprofits Assistance Fund. She said board members may not have seen some of the most egregious line-item spending, but there were so many things that should have jumped out to them that are "symptomatic of something much larger in the organization."

Barr said the fact the agency didn't have the minimum number of board members "for years" was an obvious problem. The fact that just six of 11 board members showed up their emergency meeting Tuesday was hard to fathom. They didn't even have record-keeping of the time employees were putting in, "something that even the smallest organizations do."

Johnson and Hayden both said they "shared responsibility" for oversight of the organization. Does that mean they'll chip in with Ellison and the other board members to come up with several hundred thousand dollars allegedly spent recklessly while children shivered in the cold?

Don't hold your breath.

Barr said the board probably is covered by insurance, but if any board members were personally benefiting from perks, insurance probably won't cover them.

Hayden said he paid his way for any trips. We'd all love to see those receipts.

During the same time Community Action was spending money on trips, according to the audit, Davis wrote that "our capacity to serve was often challenged and at times, stretched to the limit."

Yet, he defended the trips as a "small gesture on our part to offer [board members] a moment of relaxation or entertainment. It's not like we do this every single week of the year."

Ah, I feel much better about my tax dollars paying for massages and trips, as long as it made people feel more relaxed.

Davis has further defended his board's oversight, saying the state audit gives the "illusion that our board members are asleep at the wheel."

Actually, that's a pretty charitable characterization. Because if the board was not asleep at the wheel, then members were active participants in a planned budget of which 68 percent would go to administrative costs next year, a number that shocks anyone involved in a nonprofit.

Perhaps the saddest part of the whole mess is that it certainly appears those most harmed by the reckless spending were the poorest among us. The audit found that there was an 85 percent to 96 percent drop in the number of participants who landed a job through the agency, and a letter last January warned that the agency "indicates the lowest outcomes delivered … in recent history."

Sen. Barb Goodwin, DFL-Columbia Heights, was one person not surprised by the audit. She said she had been shocked by the agency's spending and brought it to the attention of legislators and those overseeing energy programs 17 years ago, before she was in the Legislature.

"The only thing that surprised me is that it took so long for somebody to do something," said Goodwin. "When I first looked at their budget, I thought it was disgusting. I think there has to be prosecution; it's to a criminal level."

Goodwin said the money needs to be paid back by individuals, not taken from money used to help the poor.

Barr said the audit makes it apparent the many issues "should have come out a long, long time ago."

"We work with hundreds of organizations, and they are overwhelmingly scrupulous," Barr said. "This reinforces the antiquated notion that nonprofits don't know how to manage, when most of them are managed very well."

Pam Marshall, executive director of Energy Cents Coalition, which advocates for affordable utilities for the poor , said she has supported the mission of Community Action of Minneapolis. "But when the leadership seems more interested in personal opportunities, that leadership needs to change," she said.

jtevlin@startribune.com • 612-673-1702 Follow Jon on Twitter: @jontevlin