FOX19 INVESTIGATES: Stimulus money misspent? - WFXG FOX54 Augusta - Your News One Hour Earlier

The shock of the Great Recession. Unemployment in Ohio above 10.5%. Billions in stimulus money flowing as wide and deep as the Ohio River.

Cincinnati ended-up getting nearly $1 million in stimulus money for a job training program called Constructing Futures. The idea was to prepare out-of-work minorities and women for construction and apprenticeships. Eight Cincinnati nonprofit groups signed-up to be a part of the job training program: Laborer's Local 265, Easter Seals Tri-State, Urban League of Greater Cincinnati, Butler Tech, Cincinnati-Hamilton County Community Action Agency, Allied Construction Industries, Straight 2 the Heart, and Cincinnati Labor Agency for Social Services.

Out of the $1 million they got, more than $255,000 is under scrutiny by state investigators.

A group called Straight 2 the Heart is one of the organizations getting a lot of heat. State investigators want to know if Straight 2 the Heart spent more than $57,000 improperly. Its leader is Lanore Cross. About a month ago, she hired attorney Clyde Bennett, who agreed to talk with FOX19 about Cross's situation.

"She has been in contact with the authorities," Bennett said. "I'm her attorney now, so I'm acting as her agent. So I'm in contact with them along with Ms. Cross."

What authorities, like Ohio Inspector General Randy Meyer, want to know is whether Cross was justified in billing the government for so much of her salary. $45,000 is in question because, as the inspector general's report states, if Cross was spending 50% of her time on the job training program as she claimed, she would've had to have worked a total of 15 ½ hours a day, seven days a week.

"In this situation," said Meyer, "the number of hours that she is claiming against the grant was too significant for her to be able to actually do in a legitimate workday."

But Cross's attorney is pushing back. He's urging people not to get the wrong idea about what he feels are just some bookkeeping issues.

"Everything in every invoice that she submitted for work was actually done for the grant," Bennett said.

Also under investigation is the fact that Straight 2 the Heart used stimulus money to rent office space from Ty Stuckey, who's a Straight 2 the Heart board member. That's a clear conflict of interest.

"I don't think that conflict rises to the level of wrongdoing," Bennett said. "It might be inappropriate but it was not wrong and it was not criminal."

There's more to this controversy, though.

A letter from the Ohio Secretary of State's Office, obtained by FOX19, shows Stuckey's business that was renting space to Straight 2 the Heart got in trouble in 2007 for not paying taxes. Stuckey still claims on his LinkedIn profile that he's the owner of TYS Construction. But in the eyes of the state, it's a business that doesn't legally exist because its articles of incorporation were canceled six years ago.

It also doesn't look good for Straight 2 the Heart to use government stimulus money to pay a former business with tax troubles.

Mr. Stuckey did not respond to FOX19's request for comment.

With all these red flags, it makes you wonder who was supposed to be watching out for the taxpayer. The first line of defense was supposed to be Easter Seals Tri-State, which was the fiscal agent for the job training program. That meant Easter Seals was responsible for collecting invoices from all of the other job training groups.

Easter Seals has a new president, Pam Green, who wasn't in that role at the time. But she agreed to answer our questions.

"Did you do any audits or do any monitoring visits of your other partners?" we asked
"No," Green responded. She saw the job as having "to pretty much collect all of the invoices and submit it to ODJFS."

That's the Ohio Department of Job and Family Services, taxpayers' second line of defense in this case.

The inspector general's report details --- and organizers involved in the Cincinnati job training program also tell FOX19 --- that ODJFS gave conflicting, confusing instructions about what the stimulus money could be used for.

We're told you might have to deal with five or six different bureaucrats over the life of the grant, each with their own ideas about what the rules were. Here's a prime example of how it played out, according to the inspector general's report:

"In an email to the partnership," the report says, "ODJFS denied a request for reimbursement of approximately $500.00 related to (a) graduation event."

Yet for a $3,000 graduation dinner on another occasion, Job and Family Services said no problem.

"There were many frustrating times, I will say, during the grant period," Green told FOX19.

The inspector general's report may not be the end of the controversy either. Meyer has now forwarded his findings to the U.S. Department of Labor, which could demand some of the money back.

"So it could be the taxpayer in Ohio on the hook again?" we asked Meyer at his office in Columbus.

"It's the taxpayer all around on this," he said, "because it's their money from the federal system. So yes."

In FOX19's commitment to balanced news, we also want to point out that there were dozens of success stories that came out of all this. The Easter Seals says of the 228 people who graduated from the program in Cincinnati, at least 60% got jobs or paid apprenticeships.

See the full Inspector General's report here - https://docs.google.com/file/d/0Bz102u_oWrojVEV5c3pnSWM0dHM/edit?usp=sharing

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