Reply #23: Misuse of Federal funds, multiple allegations of sexual harassment of students [View All]

Firing of the Inspector General in charge of the Fed funds case, removal of emails during the investigation, insolvency of charter school (see below) resignation of key staff, special treatment to avoid criminal charges and get off list ineligible for federal stimulus funds, etc. etc. etc.


Oh and ALL WHILE RUNNING FOR MAYOR OF SACRAMENTO.


The office decided not to pursue criminal charges against Johnson, but also entered into settlement talks with Johnson and St. HOPE. What resulted was, according to Walpin, HIGHLY UNUSUALl.



Settlement talks would normally cover the issue of whether Johnson would be required to give the misused federal funds back to the government. But amid the frenzy surrounding the possible denial of federal stimulus funds, Brown wanted to negotiate not only some sort of repayment scheme but also an end to Johnson's suspension. Walpin learned about that during a March telephone conversation with Brown. "He said he wanted to settle," Walpin recalls, "and he said that lifting the suspension had to be part of it because that was the 800-pound gorilla in the way of a settlement."

Walpin was adamantly opposed to a lifting of the suspension; after all, he had recommended that Johnson not only be suspended but be barred from receiving future federal funds. Walpin says that after that, he was cut out of the settlement talks; Brown worked directly with top officials of the Corporation, who seemed eager to work out a deal in a case involving a high-profile Obama supporter and lots of stimulus money. (The Corporation is now headed by Alan Solomont, a philanthropist and Democratic fundraiser appointed by President Obama.)



Together, Brown and the top Corporation brass negotiated a deal. Johnson and St. HOPE would pay back about half of the $850,000 in AmeriCorps grant money it had received, and the suspension against Johnson would be lifted. 



Walpin was very unhappy. First of all, he said it was a terrible deal for the U.S. government, because St. HOPE was essentially insolvent and would never pay the money back.