Supervisor Keith Carson

Alameda County Supervisor Keith Carson violated the county’s conflict of interests rules when he hired former Black Panther leader Elaine Carson to his staff and allocated $710,000 in funding to the housing non-profit she created in 2014, according to an Alameda County grand jury report released Monday. It also concluded Carson was aware of the conflict from the beginning.

The grand jury found that Carson hired Brown as part of his District 5 staff for the express purpose of helping her create Oakland and the World Enterprises (OAW). The non-profit seeks to provide affordable housing and other opportunities to underserved residents in West Oakland.
Read: Entire Alameda County grand jury report

“The dual role of the county employee in these transactions constituted both a failure of good governance practices by the county of Alameda and a conflict of interest under the Alameda County Charter and the Alameda County Administrative Code,” the grand jury concluded.

The report did not investigate any wrongdoing at the non-profit, but strongly faulted Carson’s conflict of interest involving Brown wearing “two hats,” as the grand jury described her duties as both a staffer in Carson’s office and also advocate for seeking funding from him for Oakland and the World Enterprises.

The Alameda County Board of Supervisors extensive use of discretionary funds, known as the Alameda County Fiscal Management Reward Program (FMRP) was also scrutinized by the grand jury. The pool of county funding totaled more than $9.7 million for the current fiscal year and can be doled out by each of the five supervisors at their pleasure.

“The Board of Supervisors places no limit on FMRP funds that can be used for donations to nonprofit organizations. It appears the supervisors are free to spend as much of their FMRP money on donations to nonprofit organizations as they wish,” said the grand jury.

The FMRP was created as a way to incentivize each county department to streamline its annual finances. Savings from each fiscal year can be carried over and supervisors can allocate them to non-profits in their districts. Carson has typically held the largest FMRP account balances in recent years. During the current fiscal year, his office had $3.4 million.

But the grand jury found the intersection of Carson and Brown is a clear conflict of interest, in addition to Carson’s use of the FMRP for her non-profit.

Brown and OAW initially requested $790,000 in state boomerang funds for affordable housing in 2014. However, the county Housing and Community Development Advisory Committee recommended OAW receive $290,000 in funding. According to the grand jury testimony, OAW ultimately received just $102,570 after failing to meet certain requirements. In addition, OAW failed to submit quarterly reports on its scope of work, according to the report.

Since 2014, Carson allocated a total of $710,000 in FMRP discrectionary funds to OAW on four different occasions, said the report, and the money was dispersed within days. The last check being sent to OAW in March 2016 for $300,000. Carson and Brown were also in constant contact regarding the allocations, the grand jury learned. Carson also sits on the OAW board of directors.

“Documents produced by the county, and testimony heard by the Grand Jury, establish that there were communications between the supervisor and the county employee about these recommendations and disbursements, including requests by the county employee to the supervisor for funds for OAW,” said the report.

Also, no contract exists between the county and OAW, the grand jury found. “As far as the Grand Jury can determine, there was no county oversight over the use of the FMRP funds disbursed to OAW other than by the supervisor and the county employee.”

Carson may have also been actively concealing the connection between Brown, his staffer, and OAW. In each letter requesting the use of the FMRP for OAW, Carson did not name Brown and the principal of OAW, but instead, named its chief financial officer. “The Grand Jury determined that those statements are inaccurate, and that the county employee is, and at all times has been, the principal of OAW.”

The grand jury described the county’s policy of distributing large amounts of dollars to non-profits with no competitive bidding or written contracts “constitutes a failure of good governance practices by the County of Alameda.”

In addition, the grand jury called for the county to change its policies, while also avoiding clear conflicts of interests in its hiring procedures. The county has 90 days to respond to the grand juries recommendations.