- The Washington Times - Sunday, March 20, 2011

When the National Park Service established a “reserve” around the Mall, closing the area to new monuments, two final memorials had secured space and were waiting to be built: a monument honoring Martin Luther King Jr. and a memorial to black soldiers and sailors who fought in the Revolutionary War.

The King memorial is just months from completion, scheduled for an August unveiling eight years after the reserve was created in 2003.

But despite several assists from Congress, which 14 years ago authorized the U.S. Mint to issue a commemorative coin to jump-start fundraising for the nonprofit Black Patriots Foundation, ground never broke on the Revolutionary War memorial.

And when congressional authorization to build the memorial between the Lincoln Memorial and Washington Monument expired in 2005, the foundation - and nearly $1 million generated by the coin sales - had vanished.

A little-noticed 2009 report by the Treasury Department’s office of inspector general obtained by The Washington Times through an open-records request revealed a lack of oversight on the part of the U.S. Mint and widespread abuses by the foundation. Yet no administrative sanctions were issued, no one faced charges and the money was deemed irretrievable.

A Mint spokesman said it had no statutory authority to try to recover the funds.

The foundation vigorously promoted the memorial, saying it would “remind us that blacks and whites shed blood together for our nations independence and our collective freedom.” More than 5,000 blacks fought in the Revolutionary War.

The commemorative $1 coin featured an image of Crispus Attucks, a black man killed in the Boston Massacre and widely referred to as the first patriot to die in the American Revolution. It also depicted a black Colonial family that would have been featured on the 90-foot-long bronze sculpture on the Mall.

The coin, sold in collector sets ranging from $30 to $84, was made available in February 1998. Under the 1996 law enabling its creation, a $10 surcharge for each coin was dedicated to funding the memorial. The coins were sold through December 1998, raising $902,000, which was delivered to the foundation in 2003.

The law specified that coin proceeds were to be used exclusively for the memorial’s construction, yet foundation officers told the inspector general’s office that they were unaware of this provision and admitted to commingling coin proceeds with funds from other sources. They also acknowledged using the money to pay operational costs, including a salary of more than $80,000 for the foundation’s president, Rhonda Roberson.

H.B. Lazar Business Services Inc. in Silver Spring, the foundation’s bookkeeper, told investigators in 2007 that the group’s finances were “in shambles” when it took over the account in 2002. The firm said “large sums of money” had been spent on consultants, airline tickets and “shopping-type items.” H.B. Lazar said the group stopped paying for its services in 2005 and could not be located to come pick up its records. The firm eventually shredded the records because it lacked the space to store them.

In a written statement to investigators, Ms. Roberson - now head of a small real estate investment firm in South Carolina - said a foundation representative called the Mint’s general counsel’s office and was told there were no restrictions on the use of the funds.

Mint denies call

Mint officials deny that any such call took place, and the IG’s report said Ms. Roberson could provide neither a time or date of the call or name of the person with whom she spoke.

In her statement, Ms. Roberson, a lawyer, also said the money received from the coin surcharges “were used for fundraising to build the memorial and to run the foundation office.” She told investigators that a sculptor was paid $125,000 for a model of the monument and that additional funds went to pay her salary and other expenses, such as travel.

She defended the foundation’s use of the money and denied that any funds went to “any accounts for my personal use” or to the personal accounts of “anyone else affiliated with the foundation.”

Ms. Roberson, who served as foundation president from June 2003 until October 2005, did not respond to requests for comment from The Times.

According to the foundation’s publicly filed tax returns, the group had $112,786 in cash and savings on Jan. 1, 2003, with $136,899 in liabilities. During that year, the foundation raised $82,330 from donors and received $902,758 from the Mint from the sale of the commemorative coins. In 2003, according to the tax records, the foundation spent $304,080 on salaries, rent, accounting fees, public education programs and other expenses. It reported on its 2003 tax return that it had more than $800,000 in cash and savings at the end of that year.

Tax records for the foundation for 2004 and 2005 could not be located. There also is no record that the group filed its required annual financial audits with the Mint covering 2003, 2004 and 2005, which are supposed to detail how funds were spent.

After receiving four congressional extensions, the foundation faced an October 2005 deadline to start construction of the memorial or lose its Mall space. While the foundation spent more than $800,000 on development costs in earlier years, at the time it received the Mint money from the sale of the commemorative coins in August 2003, it still needed $9 million to $12 million more to build the memorial.

Mint spokesman Michael White said that even though the foundation never built the memorial, it was not required to return the money. He said that while the Mint was aware of the foundation’s funding problems when it turned over the money from the sale of the coins, the agency made no effort to recover the funds because it lacked the statutory authority to do so.

The coin sold poorly - only about 100,000 of the 500,000 that had been authorized.

“My recollection was that it was a very muddied picture,” said Gregory Gill, a lobbyist who worked briefly for the foundation in 2003. He said the group wanted his firm to help get an extension on the memorial’s authorization, but it could not say how much time it needed or how it intended to raise the funds. His lobbying relationship ended in November 2003.

Mr. Gill said the group never had the money to build the memorial.

Once the foundation received the August 2003 infusion of cash from the sale of the coins, tax records show, it quickly began routing the money for operating and other expenses instead of exclusively using it for the construction of the memorial, as required by the law.

The foundation’s spending practices continued into 2004, according to unaudited financial statements by the group’s bookkeeper, copies of which were obtained by The Times. The statements show the foundation raised only $1,500 from public donations in 2004 but spent more than $472,000 on payroll and operating expenses, fundraising and long-distance travel, separate travel and lodging for board members, rent, a traveling exhibition, “Hall of Honor” expenses and public education.

The payroll expenses included an $88,333 salary for Ms. Roberson, according to the statements.

In 2005, the group simply disbanded.

Run its course

“It just had run its course,” said Jim Granum, a longtime board member and retired railroad lobbyist. “It just sort of disintegrated with the expiration of the congressional authorization.”

On Dec. 31, 2004, the bookkeeper’s statements show, the foundation had $250,825 in cash and savings along with $48,310 in commemorative coins it carried on its books as inventory. It is not clear from public records how that total was spent or what happened to the coins. When the foundation folded, it left behind more than $160,000 in unpaid debts, according to Senate testimony.

The National Park Service, which controls the Mall, estimated during a 2007 Senate hearing that the foundation had raised $3.5 million to $4 million for the project.

Mr. Granum said the foundation needed $14 million to build the memorial, but “it never became a cause for anyone with enough status to make it happen.” He said the memorial project did not have the cache of the Martin Luther King Jr. memorial since it “didn’t honor a particular person … just an amorphous group from 200 years ago.”

Maurice Barboza, a founder of the Black Patriots Foundation, said in testimony before the 2007 Senate committee that the “failures had nothing to do with the history or the concept; it had to do with bad management that was in plain view.”

Mr. Barboza was forced out of the foundation in the early 1990s in a power struggle and now heads the National Mall Liberty Fund D.C., which is seeking to build the monument on federal land.

The IG’s report said the Mint’s oversight of the foundation was lacking. It added that the agency did not seek an investigation until April 2007, three years after the group had failed to file its first required annual audited financial opinion. By the time the IG’s office got involved, the money was gone, the group had disbanded and the statute of limitations was about to expire.

“There were attempts during that period to contact the organization, but the United States Mint was unable to locate them,” Mr. White said.

On July 22, 2008, the IG’s office referred the matter to the Internal Revenue Service for potential criminal violations, although no criminal charges were filed. A day later, the IG’s office wrote that the U.S. attorney’s office for the District of Columbia had declined criminal prosecution because of the impending expiration of the statute of limitations. In a letter, U.S. Attorney Jeffrey A. Taylor said he was closing the case “for lack of evidence of criminal intent.”

In its report, the IG’s office concluded that the foundation’s funds had not been used in accordance with the required legislation, but that foundation members had not personally profited. In 2009, the IG’s office threatened to take the rare step of issuing a separate management implication report identifying deficiencies in the Mint’s commemorative coin program, but it never wrote such a report.

A former foundation board member, Thomas V. Chema, a Cleveland lawyer and president of Hiram College, described his tenure as “not a great experience,” saying that by the time he arrived, “the die was cast against this project.”

Mr. Chema, who oversaw a public/private partnership in the 1990s that financed and built the Cleveland Indians ballpark and the Cleveland Cavaliers arena, said the foundation did not have the kind of money it needed and lacked the people who could raise it.

“They were good people. They were well intentioned and had a good project,” he said. “I just think they were in over their heads.”

• Matthew Cella can be reached at mcella@washingtontimes.com.

• Chuck Neubauer can be reached at cneubauer@washingtontimes.com.

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