Government Sponsored Thieves: How local politicians are stealing public funds

 (from 9/1/11).Recently, local politicians and those on the city council have called for a “tough-on-homeless” approach. Citing the threat of crime, business people and politicians like Mike Moradian and Councilman Joe Muratore would like to make public parks private and have a private police force patrol them. In doing so, they tell us that crime


would be reduced and the homeless would be driven out of the downtown. Of course, this has nothing to do with creating a safer community and everything to do with making the area safe for business investors; investors that people like Muratore represent and can make money off of. Furthermore, a recent scandal in the city’s power structure shows that the local elites have been breaking their own laws; laws which could land some of them in jail. Since early 2009, local politicians have been profiting from government funds aimed at fighting the depressed housing market. Recently, a group of nonprofits, government agencies, and faith-based organizations have been accused of severe mismanagement and embezzlement of federal funds that were meant to create jobs and provide housing for poor and working people. After information was leaked from an insider, many city and community bureaucrats have been placed in the spotlight, causing a scandal within the local power structure. While working class people in the Valley have been forced to work jobs for statistically lower and lower pay, and many can’t afford basic housing costs, local officials and business elites and have been lining their pockets with public money. According to the City’s website[1], “Modesto applied for and received $25 million from the federal Neighborhood Stabilization Program to be distributed through the Housing and Urban Development Department (HUD) to help create jobs and stabilize declining property values in neighborhoods.” This money should have gone to benefit potential homeowners and renters with incomes between 50-120% of Area Median Income ($24,275 – $58,260 for Stanislaus County[2]), and local contractors and laborers who would do necessary repairs. This of course has not been the case. On July 10th, HUD received an anonymous e-mail from a Stanislaus Housing & Support Services Collaborative member outlining their concerns. The veteran member of more than five years requested that their name be kept confidential for fear of being fired [3]. According to the Modesto Bee, The document contained the following claims: Three members of the executive committee work for agencies that receive HUD Supportive Housing Program grants, “yet provide supposed oversight and review of their own projects with no input from the” collaborative. Executive committee members Gibbs, Michele Gonzales and Glenn Hutsell “rigged” the application review process to get funding for their “pet projects” year after year. The executive committee failed to review whether HUD grant recipients were complying with a grant’s requirements. If they had done so, they would have spotted the problems at Community Housing and Shelter Services, a Modesto nonprofit that nearly closed because of mismanagement. The Homeless Management Information System, a software program designed to record and store


information about the homeless and their needs, still is not running after four years. Some executive committee members provided fraudulent information on a 2010 HUD grant application [3].

Joe Gibbs, Grant Writer and Development Director for SCAP[3], received a bonus of more than $637,000 for writing grant proposals according to the Modesto Bee [12]. This is on top of his regular pay. That’s $637,000 of public money, which was supposed to go towards helping Modesto families but instead went to an official who was already highly paid. In fact, Joe and his wife Denise are SCAP’s two highest-paid employees[13], raking in more than $712,000 last year, and more than $1.32 million in four years. After the Modesto Bee revealed how much he was earning[12], Gibbs agreed to forgo $436,471 of what he said he was owed [14]. In doing so, he claimed that his “contractual agreement was made with fairness and proper legal standards in mind,[12]” although Pastor Darryl Fair, Chairman of SCAP’s Board of Directors, says that after “reviewing SCAP’s financial data for the year 2010, the board realized… the 4 percent incentive to our director of business and program development exceeded what was appropriate for a nonprofit agency to offer.”[12] The same Darryl Fair has recently resigned from Stanislaus Housing & Support Services Collaborative’s executive committee, along with at least five others that may or may not include Gibbs[10]. SCAP’s new board includes Chairman Jonathan Dattilio of Lincoln, Vice Chairman Patrick Pokorny of Riverbank, Secretary Daniel Malakauskas of Stockton, and Tom Drury of Modesto [10]. They are also currently recruiting others in order to meet their guidelines of seven members[10]. On August 2nd, the city notified Councilman Joe Muratore[15] and his business partner Ryan Swehla[15] of a likely conflict of interest after it was found that Benchmark Commercial Real Estate Services, which they own together[15], was paid a $62,500 commission[15] for the sale of an apartment


complex to Trinity Renovations[15], which is also co-owned with Swehla[15]. Trinity also hired Mike Moradian to complete the property inspections through his company Peace of Mind Home Inspections[16]. Moradian is the President of the La Loma Neighborhood Association (LLNA)[17] and sits on the city’s Blue Ribbon Commission on Homelessness [18]. As it was reported in the Modesto Bee on August 18th, Muratore was also found guilty of illegally voting in the council decision that initially allowed the city to accept federal housing funds[15]. Since then, Trinity has had it’s NSP funds frozen[6] and been barred from working with the HUD program[6]. Muratore admitted guilt to the accusation and the $62,500 commission has been returned[6]. At a Modesto City Council meeting regarding SCAP on August 3rd, 2011, Muratore said he promptly had his attorney notify the California Fair Political Practices Commission after checking logs and “discovering” that he had placed a vote [15]. The FPPC response was a warning letter with no administrative prosecution or fines[15].

The current SCAP scandal, just as the current crisis unfolding with the Modesto Police Department and the Stanislaus County Sheriff’s Department, shows us several things. Firstly, that those in power have organized amongst each other in order to siphon money out of the public’s hands and straight into their pockets. The politicians get the deals, and then have their companies or their friends’ companies do the work, looking the other way when they take hundreds of thousands of dollars right off the top. Secondly, this scandal proves that those masquerading as our “leaders” have never had our interests at heart. This isn’t a problem of a few bad apples, but a whole rotten tree. The network of business interests and political big-wigs all needs to be pushed out and overthrown. Thirdly, the corruption going on at City Hall is the same as that within the Federal Government and corporations. Our money goes to fund wars and the bailout of banks, while the CEOs kick back and make record-breaking profits. We must take power into our own hands; we must not wait for the elites in downtown Modesto or Washington D.C. to swindle us again while people are without money, food, and shelter. The time is now to take what we need and occupy it. We shouldn’t wait for government officials to screw us over when we can take over hundreds of abandoned foreclosed houses and apartment units ourselves. Talk with neighbors, agree not to call the police, fix the place up, move right in. If an eviction notice comes, tell the bank to shove it. Get together with family and neighbors to drive off inspectors and the cops. Our neighborhoods become vacant save for boarded-up buildings while the bankers grow rich and the Muratores of the world do as they please. It’s time for all of them to go, and for all of us to bring this corrupt system down. (Full article and citations at


Categories: Central Valley News, Political Corruption

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