The mission of the D.C. Children & Youth Investment Trust Corp., the nonprofit group at the center of former D.C. Council member Harry Thomas‘ theft scandal, is to expand and improve services for local children, especially when they are out of school.
But in early 2009, while facing a multimillion-dollar deficit, the group decided to pay more than $400,000 to a Kentucky company to rent a giant heated tent and other equipment for RFK Stadium during the week of President Obama’s swearing-in.
Among events held under the tent, which was set up on the stadium field, was a volunteer service gathering attended by incoming first lady Michelle Obama and Vice President Joseph R. Biden.
Why the trust, which is associated with after-school programs for D.C. children, would pay so much money for an inaugural event remains unclear. “The trust is looking into this matter and will respond at the appropriate time,” trust spokeswoman Erica Toliver said Thursday.
With the tent rental, the trust paid more money to the Kentucky special-events company than it paid in annual rent for its own office space. What’s more, most of the dozens of community groups that have received funding from the trust to provide tutoring, employment training and summer programs throughout the District have received nowhere near the $404,729 paid to the company.
In tax forms, the trust said it paid the money to SR Holdings in Lexington, Ky. State corporation papers list a company in Lexington called SR Holding Co. whose president is Gerald Lundergan, a prominent figure in Kentucky Democratic politics.
There’s no mention of the inauguration in forms the trust filed with the Internal Revenue Service that disclose the payment. The IRS filing refers to compensation paid out for “tent and equipment rental,” but provides no further details. Nor does the trust make note of its hefty tent and equipment rental in its annual report.
In a phone interview this week, Mr. Lundergan said his company received the money to provide a tent and flooring at RFK Stadium during the inauguration. He said the tent was used for a “bunch of activities” that week.
One well-publicized event was a service day announced by D.C. Mayor Adrian M. Fenty days before Mr. Obama’s swearing-in. Under the big heated tent, RFK Stadium hosted thousands of people who lined up to assemble care packages for military troops. At the time, the D.C. government said the event was being privately sponsored.
“The crowd, inside a large tent on the field inside the stadium, turned an assembly line into an impromptu party, cheering for one another, chanting ‘Obama‘ and singing along to music playing in the background,” The Washington Times reported in 2009.
Mr. Lundergan said the hiring of his company made sense because it had a local office and worked on the presidential inaugurations of George W. Bush and Bill Clinton, among other special events throughout the Washington area.
As for why his company got paid through a nonprofit D.C.-based youth services organization, which received funding from the D.C. government, Mr. Lundergan added, “That’s none of my business. I have no idea.”
Mike Burns, a partner at BWB Solutions, a national consulting firm that works with nonprofit groups, said the question officials need to ask is whether allotting more than $400,000 to rent a tent was consistent with the mission of the trust.
In forms submitted to the IRS, the trust describes its mission clearly: “To increase resources and investment in the people, programs and systems that serve children, youth and their families in the District of Columbia.”
“They have to figure out how this was in support of their mission, where did it come from and what did they expect to get out of it,” Mr. Burns said. “The board needs to find out what happened and try to be as publicly accountable and transparent as possible.