'It doesn't seem right' - washingtonpost.com

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A group plagued by service, cost complaints is awarded $4.5 million. How?

By Debbie Cenziper
Monday, October 19, 2009

Alexander Harrington walked into the house "where miracles happen every day" with a single suitcase and $3 to his name, fresh out of prison and determined not to spend another day doped up in dark alleyways.

At 59, he had been living with HIV for more than a decade. Now, he was four years sober with grandchildren he wanted to see. While visiting a local medical clinic, he had heard about a house of second chances, part of a District-funded AIDS nonprofit group called Miracle Hands Community Development Corp., that provided emergency housing, counseling, job training and help with finding a permanent place to live.

Harrington moved into the house in Northeast Washington in April.

In a bedroom with filthy floors that he shared with three other men, he waited for counseling and job training. He waited for a chance to learn where he might go once his limited stay at the house had ended.

After a few weeks, he caught a bus to the D.C. Health Department's HIV/AIDS Administration to seek services there. He was told he'd get a call back and waited some more.

Then, on a Friday afternoon in May, as men lounged around the steamy house and a single supervisor sat in the dining room, Harrington struggled with the news that it was time to go. He said he left Miracle Hands without job training or a lead on permanent housing.

"It doesn't seem right," he said, packing his suitcase for the streets.

In a city fighting to control a devastating AIDS epidemic, Miracle Hands promised to reach into the poorest pockets of the District, offering a lifeline in African American neighborhoods long overlooked by established AIDS groups.

But the nonprofit group, which became one of the most heavily funded AIDS organizations in the city, has been racked by complaints from city monitors, former clients and other AIDS groups about a lack of services and supplies, missing records and questionable expenses, The Washington Post found.

Twice, monitors suggested the city withhold money to the group. But former HIV/AIDS Administration housing chief Debra Rowe continued to provide steady support to Miracle Hands, which over five years was awarded about $4.5 million, much of it from Rowe's department.

Included was $420,000 in housing funds for a highly anticipated job training center that more than three years later has yet to open. Meanwhile, more than 400 people with HIV or AIDS are on a years-long waiting list for supportive housing.

"It was not a wise decision," HIV/AIDS Administration spokesman Michael Kharfen said of funding the renovation.

The story of Miracle Hands shows how start-up nonprofit groups that pledged to help the sick in a city with the nation's highest AIDS rate were able to draw millions from a D.C. agency that time and again failed to ensure its money was well spent. From 2004 to 2008, the HIV/AIDS Administration -- entrusted with spending the city's AIDS dollars -- paid more than $25 million to groups marked by financial problems or questions about the quality of care and services, including Miracle Hands.

Miracle Hands officials defend their programs, saying they are properly staffed and equipped and especially needed in the District's poorest neighborhoods.

From its headquarters in a 14,000-square-foot warehouse on Queens Chapel Road NE and rental houses throughout the city, Miracle Hands said it has provided support groups, housing and a day treatment center offering showers, meals and therapy. Group officials said that they offer support to housing clients but that the services are optional.

Miracle Hands' executive director is 52-year-old Cornell Jones, who once ran a massive cocaine ring on the streets of Northeast. Arrested in the 1980s, he served time in prison and emerged to start Miracle Hands in the late 1990s to help ex-offenders, the homeless and troubled children. He had business ventures as well: Next door to Miracle Hands, Jones opened a popular nightclub called D.C. Tunnel.

"This deadly disease . . . is not a gay, white Dupont Circle disease anymore. . . . The [city] didn't have a clue how to attack that population," Jones said. "We came in with some new ideas . . . and try to give these clients everything that they need."

Jones and Rowe said they have a long-standing professional relationship. Like Jones, Rowe had overcome a drug past, serving time in prison for heroin and cocaine charges before building a career focused on people with AIDS.

One Miracle Hands supervisor said Rowe visited frequently and would help Jones with paperwork.

"She did a lot of work for Miracle Hands," supervisor James Lynch-Bey said.

But Jones said Rowe did not favor his group, noting that Miracle Hands applied for funding through a competitive process. City officials, however, said department heads such as Rowe supervise the selection process, weigh in on how grants are awarded and monitor the money.

Rowe also had a personal connection to Miracle Hands: Three of her family members and a friend were hired by Jones.

Rowe, 50, said she never benefited personally from Miracle Hands and did not provide favored treatment to any group. She said she did the best she could under difficult circumstances, taking over a housing department that funded and monitored many struggling nonprofit groups.

"It was a mess," she said. "Everybody said that Debra Rowe was the one that can fix it."

When asked by The Post about Miracle Hands' performance, Rowe said that the HIV/AIDS Administration's "records speak for themselves" and that if she had found "serious discrepancies" she would have stepped in.

She acknowledged that her 28-year-old son was hired by Jones to work as a Miracle Hands housing staffer and that her father and uncle worked parking lot duty at D.C. Tunnel.

Rowe said she saw no conflict. She said she did not realize her father and uncle worked there until she visited the club. Her son, she said, took the job in 2003, when Rowe was a public health adviser at the HIV/AIDS Administration but a year before she had taken over as housing chief. One Miracle Hands roster showed Rowe's son's salary was $29,120.

Rowe also said she had referred her friend Danette Williams to Miracle Hands when Williams needed a job. Jones hired Williams as the Miracle Hands program director in 2004; she is now the deputy director.

In December 2006, the FBI launched a probe into the District's AIDS funding, Rowe's connections and others involved in funding decisions, seizing files from Miracle Hands and Rowe. Rowe and her attorney said the case was recently closed.

FBI Supervisory Special Agent Darlene G. Hoyns, however, said the case remains active.

Williams said Miracle Hands has recently received praise from the HIV/AIDS Administration, citing high marks on a capacity assessment, which considered such criteria as experience and the completion of invoices.

City officials, however, say the assessment does not measure the quality of services or a program's overall success.

Despite the FBI investigation and complaints about services, the HIV/AIDS Administration continued to provide grant money to Miracle Hands, with more than $700,000 awarded this year. Kharfen said recent site visits for the group have not identified deficiencies, although the city no longer funds the group's long-term housing and day programs.

"It shows you how embedded the culture is here," said Ron Harris, a local AIDS case manager. "It's that Debra Rowe mind-set: Everybody gets paid."

'That's my people'

Rowe said she had met Jones years ago while trying to encourage young people to get tested for HIV. She said she would often recruit at D.C. Tunnel, where she liked to watch go-go guitarist Chuck Brown play.

Rowe and Jones had both come a long way.

Jones was once a drug kingpin with international ties. A police search of his home when he was arrested for drug distribution in 1985 found $870,000 in cash, plus jewelry, furs, 28 airline tickets to Las Vegas, five guns, cocaine, a currency-counting machine and a drug identification kit.

He was paroled in 1995 after serving nine years of a 27-year sentence. Three years later, Jones opened Miracle Hands to take in people from the streets.

"That's my people. That's who I knew all my life," Jones said. "I was a fairly decent criminal. I thought I could be a fairly decent manager . . . for that population as well."

Jones based the operation in the warehouse, part of a complex of buildings in an industrial park in Northeast that was purchased through a limited liability company, managed by Jones, for $1.4 million in 2002.

Rowe had rebuilt her life as well, completing a master's degree in human services after serving 15 months in prison on drug charges. In 1999, seven years out of prison, she took a job at the HIV/AIDS Administration.

Miracle Hands started receiving money shortly before Rowe was promoted to interim housing director in late 2004. The $10 million-a-year program is funded by the U.S. Department of Housing and Urban Development.

Monitors quickly began to note problems, with one writing that Miracle Hands' invoices were "routinely late and lack[ed] requisite documentation." Jones wasn't meeting monitors for site visits at Miracle Hands and had skipped training sessions at the HIV/AIDS Administration, records show.

Williams said Jones opted to skip meetings early on because he worried that his criminal past would taint the organization.

"He realized that due to his history, many would perceive Miracle Hands as being a 'rogue' organization," Williams said.

HIV/AIDS Administration monitors also found that insurance information, spending plans, and employee résumés and contracts were missing.

Still, Jerry Brown, a friend and colleague of Rowe's at the HIV/AIDS Administration, noted improvements and recommended future partnerships with Miracle Hands.

In mid-2005, a monitor noted that Miracle Hands had billed the city for "questionable" jobs. Among the payments: $9,000 for an unnamed computer specialist and $3,600 for an unnamed mental health professional, with the monitor writing, "Who/Where/Agency?"

Williams told The Post that the issues pointed out by monitors were "small."

For part of its tenure, Miracle Hands also lacked a basic requirement for doing business in the District: a license.

Monitors repeatedly asked Miracle Hands about the license and other required documentation, records show. Monitor Rony Mohram wrote directly to Rowe and others in August 2005: "Since we are precluded from continuing to fund out of compliance vendors, please advise me on what to do in regards with this matter."

Monitor Jonathan Alston responded: "We should withhold payment of any outstanding invoices until they comply. That's my suggestion."

By then, Rowe had risen to interim housing chief at the agency. She defended Miracle Hands, responding in an e-mail that the group had been seeking a license for eight months. Rowe forwarded a letter that she had received from Williams. The two women had met years earlier when they worked with another AIDS group, the Abundant Life Clinic.

Williams appealed to Rowe in a letter about the licensing delay, writing, "Your consideration and understanding in this matter is greatly appreciated."

The matter was dropped, records show. Miracle Hands received a business license in mid-2005, more than two years after the group started receiving grants. Rowe told The Post that licensing in the city can be long and tedious.

"There are other groups that didn't have it," she said.

Years later, Miracle Hands' records continue to show lapses: The nonprofit group has never filed a federal tax return, IRS records show. Williams said the recent returns could not be filed because records had been seized by the FBI.

'Out of proportion'

Some reports have praised Miracle Hands for well-kept houses and a strong management team.

One monitor once wrote, "My recommendation for this provider is to continue to do great work for the community." A quality-assurance consultant noted the group's managers had "compassion, dedication and cultural proficiency."

Time and again, however, Miracle Hands was criticized for inconsistencies in record-keeping, billing and client care.

An independent audit for 2005 by an outside firm found that Miracle Hands had made only one payment to an employee that year and owed nearly $60,000 in outstanding salaries.

Williams said employees weren't always paid on time because of delays in processing invoices at the city.

In 2006, monitors found more problems, noting that Miracle Hands again had not turned in paperwork required to do business with the city, such as proof of liability insurance. Monitors continued to call on Miracle Hands for missing audits, client reports and budgets.

The same year, HIV/AIDS Administration official Gunther Freehill e-mailed Rowe about a Miracle Hands job-readiness program, saying: "They have billed a total of about $6,600 for the first four months of their grant and have reported nothing more than that they are preparing curriculum. The costs are a little out of proportion."

There were other problems at a day program run by Miracle Hands out of a ramshackle house in Southeast. In May 2006, a housing case manager documented dirty and dangerous conditions: peeling wallpaper, soiled carpets, an uneven stairwell and no fire escape. The report was forwarded to Rowe.

Staffers at other AIDS groups also noticed the conditions.

"The house was in terrible shape," said Priscilla Norris, head nurse at the Northwest AIDS hospice Joseph's House, who visited the day program about two years ago. "There was no day treatment. It was just a place to go and watch TV."

One afternoon in the spring, The Post found men sitting side by side in the living room watching TV. The house was hot, with the windows held open by books. The ceilings had holes, and the floor was lopsided. The only place for napping was a closet with a ripped cot. The upstairs meeting room had no books, no pencils, no computers, no paper.

When The Post made an arranged visit last month, a card table was set up in the living room. Seven men were talking to case manager Willie Cheeks.

As Jones and Williams looked on, Cheeks said, "In order to be competitive out there, you have to have a skill."

One of the men responded, "In the institution, I had heard that this program was very instrumental."

Jones said that in the past, the HIV/AIDS Administration provided little money for his group's day program. Still, he said, clients are offered hot meals and therapy. Williams added that computers and supplies are stored to prevent theft and that the cot is offered only if a client is not feeling well. She also said that the house has new carpeting, a new stove and a restored front porch and that other repairs have been made.

Besides its day program, Miracle Hands says it offers job training in its warehouse, a squat, rundown building with worn carpeting and a vast room in the back. One day in the spring, The Post found that the only person there was the group's finance manager, Malik Savage. There was one sheet of drywall, a couple piles of wood on the floor and a single computer in the back, which Savage said was once used to teach telecommunications. Donated computers were piled one on top of the other in a storage room.

Williams said they had not been set up because they were missing hard drives.

A budget from a 2007 grant shows that Miracle Hands proposed charging $60,000 for use of the warehouse for job training. But the budget included only $1,000 for supplies associated with the training courses, such as drywall, metal studs, screw guns, tape and wiring.

Williams said the contractors who teach the classes bring supplies.

Harris, the local AIDS case manager, said he has repeatedly tried to refer clients to the Miracle Hands job-training programs but was never able to reach anyone.

"It was a brick wall," he said. "I never heard of anyone who did job training there."

Williams said the job programs were "comprehensive." Miracle Hands officials said there will always be some disgruntled clients.

"Miracle Hands is a good organization, committed and steadfast to its mission to help those in need," Williams said.

Former Miracle Hands client Michael Tyree also cited a lack of supplies in the group's housing program, where he stayed for two months in 2007. Sick with AIDS and throat cancer, he said he often couldn't find food and slept on beds without sheets or blankets.

"The whole house was completely dirty. They didn't feed you at all," Tyree said. "To me, Miracle Hands was just about the money. They say they were helping people, but they weren't."

Tyree now lives at the nonprofit Joseph's House. He has his own room in the basement with pictures of his nieces on the wall.

Sitting on his bed one spring morning, bundled in a red bathrobe, he said, "This feels like my home."

'The darndest places'

While Jones was operating Miracle Hands, he was struggling to keep his nightclub afloat.

City dispatchers had received 77 calls for service to D.C. Tunnel between 2006 and 2008 after reports of assaults, theft, disorderly conduct and destruction of property. The club was the site of two shootings within 90 days last year.

D.C. Police Chief Cathy L. Lanier requested at the time that the city revoke the club's alcohol license. Jones and his partners agreed to sell the club, pay a $10,000 fine and not apply for a liquor license for four years.

Jones said he saw nothing wrong with running a nightclub next to a program that is supposed to help people with HIV, many of whom are recovering addicts.

"The club was there first," Jones said, adding that it did not open until 10 p.m., after the AIDS program had closed. "The club only opened after the sun goes down. That's when the party comes out."

Said Rowe, "People start [AIDS groups] in the darndest places."

Under Rowe's tenure, the Miracle Hands warehouse next to the nightclub got a big boost from the city:

In 2005, she moved to give Miracle Hands $335,000 to renovate the warehouse, which was supposed to create a state-of-the-art job-training center.

"I had the vision for a job-training center for people living with HIV/AIDS," Rowe told The Post.

Before the grant was approved, however, Health Department supervisor Charles Nichols urged Rowe in an e-mail to justify the money because it was to be given to Miracle Hands without competitive bidding.

"The sole-source justification to allow Miracle Hands to receive these funds must address . . . why we should renovate a building for them. . . . I prefer you issue a competitive [request] so that we can make sure we are getting the best value for our resources," Nichols wrote.

HIV/AIDS Administration officials say Nichols eventually called off the noncompetitive deal.

In 2006, through a competitive process, Miracle Hands was awarded $279,000 for the renovation from Rowe's department. Miracle Hands was the only bidder, Rowe said.

Rowe also signed off on an $84,000 advance on the grant money, records show, in part so Miracle Hands could hire a general contractor for the renovation.

Yet no work was being done. Month after month, monitors noted the lack of progress, with monitor Sheree Avent writing in November 2006, "This issue has been brought to the attention of . . . Debra Rowe." Avent later followed up in an e-mail to Rowe: "Construction has not begun. . . . It is my recommendation that . . . [funding] levels need to be modified."

Grants supervisor Carine Mathurin followed up, e-mailing Rowe: "Shouldn't we de-obligate some of this money?"

Rowe e-mailed back: "No, the funds should not be de-obligated . . . [the Housing program] is well aware of the start-up issues in reference to this grant . . . [the Housing program] is fine with this."

In late 2006, Jones submitted a $494,000 estimate for the renovation work from El Cos. of Chantilly. But the address on the estimate does not exist, according to the U.S. Postal Service. The company has no phone listing in the District or Virginia.

The contact on the estimate was Edward Hunter, who is the stepbrother of Savage, the Miracle Hands finance manager, records and interviews show.

Williams said Miracle Hands solicited quotes from other contractors. She could not provide any of the proposals, saying the paperwork was seized by the FBI.

She said Hunter has construction experience and noted that the company has a trade name registration in the District. His estimate, Williams said, was far below those provided by other companies.

Edward Hunter said his business is a sole proprietorship and has not done any work in the District or Virginia. He said he does not recall how he heard that Miracle Hands was looking for a contractor.

"I was trying to get my business off the ground. . . . I figured I'd get lucky and get an opportunity," Hunter said.

As for the problems with his company's address on the estimate, he said that his wife rented space at a real estate office on the street he had listed and that it is possible numbers were transposed.

In March 2007, Rowe's department issued a second grant for the renovation, this time for $140,000, bringing the city's total investment over two years to $420,000.

Two months later, Avent, the monitor, wrote that the location for the project had changed.

Instead of renovating the Miracle Hands warehouse, work would be done at another warehouse owned by Jones two doors down, on the far side of the nightclub. Avent said she had requested a new work plan and time frame for completion of the project.

She also noted renovations at the new location were lagging, writing, "The rehabilitation work was a few weeks behind schedule and should be completed by August."

Through last year, however, monitors continued to document delays at the new site. A report issued by Miracle Hands last October said the project was scheduled to be completed within two months.

The facility has still not opened -- more than three years after the renovation money was first awarded. Williams said Miracle Hands ran out of money and needs $300,000 more. She added that much of the project has been done, including architectural plans and work on windows, walls and plumbing.

"What we have to do is nickel-and-dime it," she said.

Neither Miracle Hands nor the city could provide invoices or receipts to account for the $420,000. Kharfen, the HIV/AIDS Administration spokesman, said the agency has no plans to provide more money for the project, adding that the city's housing dollars must be invested in housing.

Rowe said Miracle Hands continues to work to complete the project.

"It was a lot of people's dreams," she said.

In April 2008, Rowe was removed from her $97,000-a-year job as the AIDS housing chief and subsequently left city government.

She is now an administrator with a new nonprofit group for ex-offenders, Returning Citizens United.

Jones is a founding member.

"Where else would I turn except to still work on behalf of that marginalized population?" Rowe said.

Staff researcher Meg Smith contributed to this report.