A D.C. lawmaker has asked the city’s attorney general to investigate whether a nonprofit group directed by a former drug kingpin applied for and received city funds to renovate a warehouse to help HIV/AIDS sufferers, then used the money to prepare the property for sale and eventual use as a strip club.
Council member David A. Catania, chairman of the Committee on Health, wrote Thursday to D.C. Attorney General Irvin B. Nathan requesting an investigation into whether city HIV/AIDS funds were used improperly and, if so, to seek the return of those funds.
Convicted D.C. drug dealer Cornell Jones, who was spotlighted in the Black Entertainment Television documentary series “American Gangster,” was the owner of the dilapidated industrial space at 2127 Queens Chapel Road NE when his nonprofit group, Miracle Hands Inc., received two city grants from the HIV/AIDS Administration in 2006 and 2007 totaling more than $400,000.
City records show that shortly after the second grant was received, a nightclub owner in Southeast positioned his liquor license for transfer to that same address, as The Washington Times recently reported. The following year, Mr. Jones became involved with plans to sell the property, which is now co-owned by a politically connected city developer who turned it into a high-end strip club called the Stadium Club, city records show.
“The circumstances surrounding the timing of the grants in question, coupled with the contemplated sale of this building, give the impression that District funds were used to renovate the building in anticipation of its sale,” Mr. Catania wrote. “If true, one might easily draw the conclusion that District funds were applied for and awarded with no intention of using the funds to actually benefit individuals living with HIV/AIDS.
“As you can imagine, this possibility is extremely troubling to me,” he wrote.
Mr. Catania attached to his letter two newspaper articles: a Jan. 28 report in The Times that detailed Mr. Jones’ role in the transactions that led to the Stadium Club’s opening in April and an Oct. 19, 2009, investigation by The Washington Post that examined controversies at the HIV/AIDS Administration and resulted in the firing of the agency’s housing director, Debra Rowe.
Ms. Rowe was an associate of Mr. Jones and approved the city funds received by Miracle Hands. She now works for a separate nonprofit co-founded by Mr. Jones.
Since 2004, D.C. records show, Miracle Hands Inc. has received more than $5.8 million in city funds to provide job training and social services to former offenders, the homeless, youths and people with HIV/AIDS. Having sold the warehouse on Queens Chapel Road to city developer Keith Forney and his business partner last March for $2.7 million, Mr. Jones has relocated Miracle Hands Inc. to a storefront at 2940 12th St. NE. He did not return multiple calls and a text message seeking comment.
Mr. Jones’ foray into the nonprofit sector followed a prolific career as a worldwide drug trafficker and a nine-year federal prison sentence, which ended in 1995. Since that time, he has managed his family’s real estate holdings and run a nightclub called D.C. Tunnel, which authorities closed down in 2008 because of violence and other concerns.
Federal court records show he was slapped with a $16.5 million tax judgment in 1990, which said he failed to report income on $33 million in drug sales from 1985.
W.F.J. LLC, the Jones family company that Mr. Jones managed out of the same residential address on Hanover Place in Northwest listed in city records as a corporate mailing address for Miracle Hands, bought the Queens Chapel Road warehouse and adjacent properties in 2002 for $1.2 million, property records show.
In March 2007, Miracle Hands received the second of two grants to renovate the Queens Chapel Road property, bringing the total received to $420,000, according to The Post’s investigation. Two months later, Ron Hunt, owner of the Nexus Gold Club in Southeast, placed his liquor license in what is known as “safekeeping” for transfer to the same property, Alcoholic Beverage Control (ABC) records show.
The license transfer became final in October 2007, records show.
Though Mr. Hunt entertained multiple potential buyers for his liquor license, one constant was the involvement of Mr. Jones, who administrative hearing records show was supportive of the plan to turn the warehouse into a nightclub. In late 2008, Mr. Forney, a significant political donor to D.C. and Democratic candidates and causes, joined with Baltimore businessman James “Tru” Redding to acquire the transferred liquor license and develop the Queens Chapel Road property into a high-end strip club.
The Stadium Club is the subject of neighborhood protests and appeals before the ABC Board and the Board of Zoning Adjustment.
Among the politicians who have received donations from Mr. Forney is Ward 5 Democrat Harry L. Thomas Jr., head of the council’s Economic Development Committee who represents the neighborhood where the Stadium Club is located. Mr. Forney also is a donor of unspecified amounts to Team Thomas, a nonprofit group founded by Mr. Thomas that is under investigation by the city’s attorney general.
Mr. Catania’s request for an investigation into Miracle Hands’ use of HIV/AIDS funding comes on the heels of his proposal to elevate the director of the HIV/AIDS Administration to a Cabinet-level position reporting directly to the mayor. He will hold an oversight hearing on March 17.