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Thursday, August 13, 2009

Corruption in the Delta: The $40 Million Cover Up

This story largely went under the radar.

The Agriculture Department plans to review more than 14,000 civil rights complaints that have been filed against the agency since 2000.

Agriculture Secretary Tom Vilsack said only a small number of those complaints were eventually decided against the department and that 3,000 of the complaints have not even been processed.

"This issue has lingered too long," Vilsack told reporters Tuesday.

The reason that this story went under the radar is because to most the term "civil rights complaints" is just a tangential concept. In fact, what it means is that some Americans were treated in a very un American sort of a way. The story that follows is just one of the 3000 civil rights complaints that were filed but never processed until now.

In the mid 1990's Michael McCray was barely out of college working his way through law school when he was able to secure a job at the U.S. Department of Agriculture. At about this time, the Clinton administration decided on a new initiative to try and renew poorer areas. They were to be called empowerment zones. Whereas in the 1960's, the federal government would move into poor areas and not only spend all the money but conduct the project entirely, empowerment zones worked under a different concept. As the name implied, the idea was to "empower" the locals. The federal government would provide some money and guidance but the locals would do most of the work and attempt leverage the federal dollars into a much bigger investment.

McCray was then recently out of college and he received a job processing the applications. In so doing, he would organize each application and prepare the application to send to the main office in D.C. These applications were detailed. The goal was to essentially have the community come together around an idea. The more detailed and well thought out the idea, the better chance an application had of passing. A good application would have detailed plans about how the money would be spent, organized, and a detailed plan for community support.

One application that stood out was for an empowerment zone in the Mississippi Delta. The zone was called the Mid Delta Empowerment Zone. The reason that this application stood out was because it had none of the things that a good application had. It was totally disorganized, lacked detail, and had little community participation.

Several months later McCray was stunned to see that this Mississippi Delta empowerment zone was chosen for the highest and most prestigious category. The most important category, an empowerment zone, would receive $40 million in federal funds. The second was called an enterprise community and those would receive only $3 million. The last category would be a champion community which would receive no money but would receive support and receive priority consideration for future funds. This application, which stood out to McCray as the worst he had seen, was chosen for the most funds and support.

McCray was then assigned to provide support to an area of empowerment zones including the one in the Mississippi Delta. It was roughly two years before Harold Lathon was brought in to head this empowerment zone. Lathonwas a rising star in the USDA. He had recently worked in a similar capacity on a $40 plus million HUD project in the Le Moyne housing project in Memphis, Tn.

When Lathon arrived in the Delta, he saw a zone in total chaos. He also found a web of corruption and conflicts of interest. The leaders of the zone, Harry Bouie and Mark Manning, were involved in a web of corruption. Often leaders of the zone would earmark funds for projects for non profits that they or other members of the zone ran or were on the board. Even worse, Lathon found that often part of the dollars would go to increasing their own salary. In other words, in their power as head of the empowerment zone, Bouie, Manning, and others, would earmark funds for organizations they ran, and they would also earmark funds for raises for themselves. Fortunately, the operation was so chaotic when Lathon arrived that none of the money, nearly two years later, had still actually been spent.

Lathon immediately ordered a full audit. He also set up a system where a third party group would review all funds so that an independent third party could examine any potential conflicts of interest. A couple months into his term, Lathon directed his assistant to go and get an official with the USDA to sign $375,000 worth of checks. The trip should have taken a couple hours total but she came back much earlier than that. When he questioned her, she admitted that Mr. Manning forged all the checks.

Lathon immediately went to D.C. to report what he had discovered to the Director of the Empowerment Zones, Victor Vasquez. After presenting his evidence to Vasquez, Lathon was essentially told he needed to find a way to work with the zone. In fact, in one meeting an official said to Lathon,

You can catch more flies with honey than with vinegar

It was during this D.C. trip that Lathon first met face to face with McCray. Upon hearing the story, Michael McCray filed a formal complaint with the President's Commission on Race. That complaint was filed with the PCR on a Friday. The PCR referred the complaint back to the OIG at USDA on a Friday, by Monday the OIG summarily discarded the complaint without any investigation. The matter was then taken to the Inspector General of the empowerment zones directly. In fact, Lathon flew to the Kentucky Highlands, another empowerment zone, where the IG was then holding meetings. Lathon presented evidence of the forgery. The matter was handled by the IG in the same manner as it was by both Vasquez and the PCR and soon it was discarded by the IG.

A few weeks after this the USDA held their 3rd White House Empowerment Conference meeting in Detroit which brought all the empowerment zones together. The head of each of the empowerment zones were expected to put on a presentation for the big wigs. At this time, the internet was just starting to blossom and everyone was using technology as part of their presentation. Because Lathon had only been in the zone less than six months, he hadn't prepared the technologically superior presentation that most of the rest of the zone leaders had. McCray was tasked with helping Lathon prepare a presentation. They came up with an idea of bringing in fresh catfish from the Mississippi Delta. The idea was a total hit and the presentation was a total success. The next day McCray was told not to provide any more support for Lathon.

The next year and a half became a working nightmare for McCray. He was isolated. He was demoted, and the rest of the staff around him turned against him. Meanwhile, Harold Lathon continued on at the empowerment zone for nearly two more years. Despite being provided no support, he began making some progress. Then, there was a dispute over how much he spent for hotel rooms for a trip of staff of his. Latham was accused of overspending for luxurious rooms. Latham maintained that he simply got a good deal for suites. He would later be exonerated of any wrongdoing in the matter however the powers that be within the USDA were able to use the matter to have Lathon fired. In fact, Vasquez was overheard saying

this is the only chance we have to get rid of him (Latham)

Meanwhile, McCray eventually took on a job working for EZ/EC Foundation Consortium a philanthropic organization supporting the Federal Empowerment Zone Initiative, but when USDA leaked word of McCray's complaints and whistle blowing activity, he was summarily fired. The Mississippi Delta continues to be as impoverished as ever. The so called urban renewal was helped by programs like the empowerment zones however that help never reached the Delta. It's estimated that had the zone been implemented properly it would have lead to about $400 million in economic development in the region. Victor Vasquez was recently made a top deputy to new USDA Secretary Tom Vilsack. The USDA Secretary at the time, Mike Espy, hailed from the Delta and was once the Congressman there. At the time this occurred between 1994-1996, his brother, Henry, was running for his seat in the area. Both Lathon and McCray were forced out of the federal government and are now working in private practice. McCray is now the communications director of ACORN 8 and an activist and advocate for the whistle blowing community. On August 6, 2009 Matthew Fogg, the EEO Representative of Michael McCray and Co-chair of the No FEAR Coalition formally requested that USDA initiate a class action complaint on behalf of McCray and all USDA employees with unprocessed and/or mishandled EEO complaints.

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