Federal prosecutors are not pressing charges against a Washington, D.C.-based dance troupe accused of misspending $127,000 in Department of Energy stimulus money.
DOE’s Office of Inspector General found that two people associated with African Heritage Dancers and Drummers used the money to cover payroll, studio property taxes and a $10,000 Internal Revenue Service fine.
OIG’s Eastern Investigation Operations accused grant recipients of wrongdoing and turned the case over to federal authorities for prosecution.
Documents obtained through the Freedom of Information Act show the OIG finished its probe last year. But the U.S. Attorney’s Office for the District of Columbia declined to file charges, a spokesman said Friday.
In an interview with Greenwire, dance group founder Melvin Deal said he agreed to team up with the chief of a local consulting firm to participate in a grant program for helping buildings and homes be more energy-efficient.
The District of Columbia Department of Energy & Environment was responsible for handing out the money. Deal said there was an understanding that a portion of the money was for administrative expenses.
"And that we could use them at our discretion," Deal added, explaining that he was upfront with the OIG about having used federal funds on dance studio rental, utilities, costumes and other expenses.
The probe, mentioned in a 2013 OIG report on contracts the city granted out of DOE’s $3.2 billion slice of the American Recovery and Reinvestment Act, was not disclosed to the public (Greenwire, Dec. 2, 2013).
The audit is one of several probes the agency’s OIG has performed on many of the 2,000 entities around the nation that received taxpayer stimulus funds.
Before 2010, African Heritage Dancers and Drummers — a cultural performing arts group launched in the early 1960s as a "Black Cultural Awareness" project — had not participated in or administered an energy-related program.
According to the OIG, a church friend approached Deal sometime before May 2008 about problems the local nonprofit group Southeast House was having with administering a federal grant program to improve energy efficiency in the homes of low-income families.
The two agreed to use AHDD’s nonprofit status to qualify for the grant. The group added the friend, who is not identified in the report, to AHDD’s bank account as part of a plan to gain access to federal funds.
"The reason we got involved [was] it was going to help low-income people in the community find some help with their energy needs," said Deal, a native Washingtonian who began his dance career in 1959 at the Northeast Academy of Dance.
No money to repay
Over two years, AHDD received $743,798 for participation in two separate grant programs offered through the District Department of Energy & Environment (DDOE) — the Weatherization Assistance Program and the Energy Efficiency Community Block Grant Non-Profit Energy Efficiency Program (NEEP).
Program managers at the D.C. office made the first payment — $42,500, representing a quarter of the NEEP award — to the dance group in September 2010. However, the office never assigned any energy efficiency projects to AHDD. Therefore, DDOE later decided to recall the money.
On Nov. 30, 2011, the agency "hand delivered" a letter requesting that the funds be returned within 30 days.
Two weeks later the group responded that it may have deposited the money into the wrong account and that it would try to return it as soon as possible.
On Feb. 3, 2012, DDOE sent a second letter requesting that the group pay up.
Twenty days later, agency officials met with the group to try to reconcile the grants. DDOE determined a discrepancy of $127,538.
But the group’s leaders said they did not have the money to repay the government. The case was then turned over to auditors to investigate.
On March 22, 2012, DOE’s OIG and the District of Columbia OIG initiated a joint investigation.
Auditors reviewed AHDD bank records and interviewed officials, including Deal’s attorney. "We let them know that we had not mismanaged the funds," Deal said.
He explained that the dance group had used the money according to the conditions of the grant, including energy efficiency.
‘We provide self-esteem’
But the group’s primary focus, he said, is to help low-income communities with programs for at-risk youth. "We’re performing artists, and we provide self-esteem," Deal said.
One person, whose name is redacted from the OIG investigative report, released to Greenwire under a FOIA request, paid AHDD about $5,000 a month for a total of $90,000 in federal energy grant funds, in addition to a biweekly salary of $2,000.
The $90,000 was used to pay AHDD employees and for other operating costs not associated with the programs, including IRS fines.
The person also admitted to the IG that he or she improperly used the grant money on several occasions for personal benefit, including to make personal loans and to pay personal debts, including back taxes and a home mortgage.
On March 7, 2013, the D.C. environmental office sent a letter to AHDD demanding the return of $127,038 for the illegal spending.
Investigators then presented allegations that AHDD officials misused more than $170,000 to the criminal division of the U.S. attorney for the District of Columbia.
"We felt that there wasn’t any wrongdoing on our part; if people perceived it as such, then we apologize," Deal said. "Our intention was not to be out of compliance with anything involved in the project."
Deal added that he was "happy to know" that a lot of people got the energy efficiency services that they needed through the government programs.
Reporter Kevin Bogardus contributed.
