Sacramento Mayor Settles Federal Case

Lawsuit related to Kevin Johnson, St. HOPE Academy

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Johnson

Sacramento, California Mayor Kevin Johnson has reached a civil settlement with the U.S. attorney’s office over claims he improperly used federal funds. He has been removed from a list that barred him from federal aid, and is eligible to apply for federal funding.

“The agreement reached strikes a proper balance between accountability and finality,” said Acting U.S. Attorney Brown in a statement. “St. HOPE Academy must pay a significant civil penalty for its improper handling of AmeriCorps funds. The lifting of the suspension against all parties, including Mayor Johnson, removes any cloud whether the city of Sacramento will be prevented from receiving much-needed federal stimulus funds,” said Acting U.S. Attorney Brown.

St. HOPE Academy has agreed to pay $423,836.50 in civil penalties to settle allegations that St. HOPE did not appropriately spend AmeriCorps grant awards and education awards in accordance with the terms of grant requirements and did not adequately document its expenditures of grant awards. The amount of the civil penalty represents one-half of the $847,673 in AmeriCorps grant funds received by St. HOPE Academy.

“From the get-go, I said that federal funds to the city were never at risk, and that the suspension was unwarranted and unnecessary,” Johnson said in a statement released by his office. “This settlement confirms that, and it closes the chapter on this distraction so I can continue to work with President Obama, our U.S. senators, and Congresswoman [Doris] Matsui for Sacramento’s fair share of federal dollars and stimulus funds.”

Under terms of the settlement, St. HOPE acknowledged that it did not adequately document a portion of its expenditures of the grant awards. An initial payment of $73,836.50 must be paid within five business days of signing the agreement, with the Johnson paying all but a $1,000 of that payment.

In September, before Johnson took office as the first black mayor of the California capital, the corporation informed him that he’d been placed on an “excluded parties list” suspending him from receiving federal money.  Based on findings by the Corporation for National and Community Service, an organization that oversees close to $1 billion in federal grants to service and volunteer groups, Johnson was charged with improperly diverting more than $800,000 in AmeriCorps grants from St. HOPE Academy when he was president and chief executive.

In November, the U.S. attorney’s office cleared Johnson of any criminal charges.  However, he still remained on the list, potentially cost his city millions of federal stimulus dollars.

Since Johnson took office in November, the city has received more than $35 million in federal funding and has just learned it will receive another $20 million in stimulus funds. Johnson was also invited to two meetings at the White House to discuss stimulus funding.

Like most cities across the nation, Sacramento is experiencing a financial downturn. It has been a particularly visual spectacle of the country’s economic struggles, with a tent city that is home to almost 200 people.

Joyce Jones contributed to this article.

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