Johnson, St. HOPE, Justice Department Reach Settlement

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(Sacramento, CA)
Thursday, April 9, 2009

The investigation started last spring, when the federal government started looking at whether Johnson’s St. HOPE Academy misused more than $800,000.  The non-profit used the grant for its inner-city volunteer program known as HoodCorps.  Thursday, Acting US Attorney Lawrence Brown said Johnson and St. HOPE weren’t criminally fraudulent – but they were sloppy.
Brown: “We don’t want to minimize too much the actions that were done by St. HOPE Academy and by its leadership at the time, Kevin Johnson and Dana Gonzalez.  They did not comport themselves in the way ideally that they should have.  So this isn’t just some tech violation.  It’s not just a slap on the wrist.  It is something more than that.” 
Under the settlement, St. HOPE will pay half of the grant back over the next 10 years.  Johnson is chipping in more than $70,000 of his own money to help.  In exchange, the federal government has lifted its ban preventing the mayor and St. HOPE from receiving federal funds.  That was a big deal at City Hall, where some officials worried the mayor’s suspension could keep the city from getting money from the federal government.  For his part, Johnson says he’s glad the distraction that’s plagued him for most of a year is now over.
Johnson: “From my vantage point right now as mayor of the city of Sacramento, I am just pleased that this cloud is lifted.  We are not in any jeopardy going forward of receiving dollars – whether it be stimulus dollars from the federal government, or the people at St. HOPE who work their tail off to improve the lives of young people.” 
In the settlement, St. HOPE does not acknowledge spending any federal funds inappropriately.  It does acknowledge accounting errors.