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Feds widen probe into state payouts to social-service agencies

Updated: September 24, 2012 6:25AM

SPRINGFIELD — A federal investigation into state payouts to social-service agencies that had partly focused on state Sen. Rickey Hendon appears to have broadened, targeting state-funded groups that are tied to at least three more lawmakers.

Prosecutors in Chicago and Springfield have issued four subpoenas since December to the Illinois Department of Commerce and Economic Opportunity, the Department of Corrections and Department of Public Health.

The subpoenas obtained by the Chicago Sun-Times seek “contracts, correspondences, invoices, audits, payments [and] receipts” for 10 state grant recipients, contractors and their officers. Since 2001, taxpayers have paid at least $695,000 to those organizations.

At least part of the investigation centers on how much work — or whether any work — was actually performed by recipients of state grants or contracts, the Sun-Times has learned.

Three of the groups secured funding with help from Rep. Kenneth Dunkin (D-Chicago), while newly seated Sen. Annazette Collins (D-Chicago) and Sen. Donne Trotter sponsored grants to one other recipient, according to a Department of Commerce and Economic Opportunity spokeswoman and interviews. None of the lawmakers was named in the subpoenas, and no charges have been filed in connection with the probe.

Dunkin pushed the largest grant — $200,000 — for an event on Northerly Island called “Move! Chicago International House Music Festival” that was part of the Gay Games VII held in July 2006.

The state-funded festival promoted “house music as a music genre” and “provided the state with an opportunity to further promote local cultural and tourist attractions to visitors of the Gay Games,” DCEO spokeswoman Marcelyn Love said in a prepared statement.

The subpoena seeking records about that particular grant named Alvan Leung, who donated $19,970 to Dunkin in 2002; Randall Crumpton, a former treasurer for Dunkin’s campaign fund; and an entity called CDM Chicago that involved Crumpton and two others. Leung and Crumpton could not be reached for comment.

In an interview, Dunkin also acknowledged writing a letter of support for an organization called Inner City Youth Foundation, which was named along with its officers on a subpoena to the state prisons system. The group has a placement contract at Sheridan Correctional Center and has been paid $75,000 since 2008, IDOC spokeswoman Sharyn Elman said.

“These organizations came to me and said, ‘Hey, look here, please support this project or event.’ They, like many other organizations, come to me and many other politicians as they often do so there is no connection with any . . . I don’t want to say the word, wrongdoing, because that doesn’t go with my constitution,” Dunkin told the Sun-Times.

“The fact they’re subpoenaing these records or organizations is surprising to me,” Dunkin said. “There is nothing wrong.”

Inner City Youth Foundation, a nonprofit organization, donated $250 to Dunkin in 2009. Foundation President Maurice Perkins donated $500 to Dunkin in 2007, while the group’s executive director, Christine Perkins, gave Dunkin $500 in 2006, state campaign records show.

“I don’t have any idea what the feds could be looking at at the Inner City Youth Foundation,” Maurice Perkins said.

Another organization named on the DCEO subpoena is called Passages Alternative Living. The group got $45,000 in DCEO funds through a grant sponsored in 2001 by then-state Rep. Collins, who was appointed last month to fill Hendon’s seat when he abruptly resigned in late February. Those dollars funded parenting workshops, Love said.

Both Dunkin and Trotter said they have not been contacted by federal officials. They both said it was incumbent on the agencies to determine whether the work was properly performed.

Neither Collins nor Smith returned phone calls Friday.

With help from Trotter, the powerful budget point person for the Senate Democrats, Passages Alternative Living, got $40,000 more from DCEO in 2006 that was used to renovate a computer lab at the Illinois Institute of Technology, Love said.

“This is the first I heard of it,” Trotter said when asked Friday about the group and the DCEO subpoena, “and as far as I know, the dollars were spent cleanly.”

The latest subpoenas follow an earlier round of subpoenas to five state agencies last August, seeking contracts and other records tied to almost 50 nonprofit organizations and some of their officials.

Hendon was linked to a number of the agencies, who told the Associated Press they had secured state funding with help from the former assistant Senate majority leader from the West Side.

Among those identified in that batch of subpoenas who had ties to Hendon were his sister and her daughter, who co-owned a film production company that landed more than $1 million in DCEO funding in 2007-08, in part, to make a movie, the AP reported last October.

Hendon denied wrongdoing and told the AP he was unsure why the grant recipients and contractors were subpoenaed but declined to say whether law-enforcement officials had spoken with him.

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