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THE WATCHDOGS: Another ‘Hollywood’ grant under scrutiny by feds

Former state Sen. Rickey Hendposes with Dean Nichols Reggi Hopkins both whom were criminally charged last week. The three are

Former state Sen. Rickey Hendon poses with Dean Nichols and Reggi Hopkins, both of whom were criminally charged last week. The three are holding a mock state grant check to Hopkins' not-for-profit group, the MIW Foundation, for the West Side Music Boot Ca

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Updated: August 24, 2012 6:06AM

T he Illinois state senator known as “Hollywood” could barely contain himself.

It was 2007, and Rickey Hendon had just secured $190,000 in state funding for the West Side Music Boot Camp, which touted itself as a program “to empower local performers, producers, promoters and other members of the community with the critical knowledge and skills needed in order to succeed in today’s competitive music and entertainment industry.”

“Hendon . . . says he is really excited about this program — both as a senator and as a singer-songwriter who grew up on the streets of Chicago,” says a 2007 news release that’s still posted online, along with a picture of Hendon presenting the organizers — including his former campaign treasurer — with a poster-sized check from the state of Illinois.

Last week, the state grant that Hendon won for the music-training program was cited by federal authorities in a bribery case they filed against seven people.

Hendon wasn’t charged with any crime. Nor was he named in the criminal complaint against defendants who included Dean J. Nichols, the onetime Hendon campaign treasurer, and Reggi Hopkins, who runs the Music Industry Workshop, the Northwest Side business where the music boot camp was based.

Hendon — who is referred to in the complaint only as “State Senator” — surprised his Senate colleagues by announcing in February 2011 that he was quitting the Illinois Legislature. Since then, authorities in Chicago and in Springfield have been investigating a range of groups and people involved in projects that Hendon won state grants for.

Of the seven people charged in the bribery case, five have done political work for Hendon, records show. They are:

Nichols, 62, of Oak Park, an accountant who also has notarized Hendon nominating petitions.

Hopkins, 43, of Chicago, who was paid $200 for a logo for Hendon’s campaign.

Anthony Johnson, 59, of Chicago, who has circulated nominating petitions for Hendon and has been paid $1,055 by Hendon’s campaign fund.

Elliott Kozel, 51, of Chicago, a Cook County corrections officer who has circulated Hendon nominating petitions and has contributed $170 to Hendon’s campaign fund.

Regina Hollie, 48, of Chicago, who has been paid $550 by Hendon’s campaign fund.

According to federal prosecutors, the seven who were charged last week thought that the U.S. Department of Health and Human Services was handing out $25,000 federal grants “like candy” to those who would kick back $5,000 to what turned out to be a fictitious HHS official. An informant — a crooked cop who made a deal to work for the government — secretly recorded conversations detailing the scheme.

That same informant also proved key in a separate criminal case filed last week that also has ties to Hendon, who formerly worked for the Cook County Board of Review. In that case, two employees of Board of Review Commissioner Larry Rogers Jr.’s staff were accused of accepting a $1,500 bribe in 2008 to reduce property-tax assessments for the informant.

Records show that one of the men charged — Thomas D. Hawkins, 48, of Chicago — has circulated nominating petitions for Hendon, who also worked for Rogers until he left the Board of Review staff in 2006.

Neither criminal case involves charges directly relating to the $190,000 music boot camp grant to the MIW Foundation NFP, Hopkins’ nonprofit organization.

The grant was mentioned in conversations that federal authorities secretly recorded, according to the criminal complaint against Hopkins and his six co-defendants. In one conversation, Nichols discussed how “State Senator” wanted to make sure that “a portion of the proceeds” from the grant “would go to Nichols and State Senator’s nephew,” the complaint says.

In another conversation, Hopkins was recorded saying Nichols and the unnamed nephew “literally did nothing, they literally never even showed up to an event. They did nothing, and between the two of them they both got like $30,000.”

Nichols “made more money off the grant” than Hopkins, who said he paid Hendon’s nephew because Hendon “asked him to do so.”

Nichols was indeed paid a higher salary out of the grant proceeds than Hopkins, public records from the Internal Revenue Service show. According to the records, the $190,000 grant was the MIW Foundation’s only source of income in 2007. The foundation paid Hopkins, the group’s executive director, $30,000 that year. Nichols, its director of operations, made $32,600.

A third man, Martin Rasheed, was paid $27,000 as the group’s director of marketing. Attempts to reach him were unsuccessful.

Hopkins’ lawyer, Sergio E. Acosta, declined to comment, as did the U.S. attorney’s office. Nichols’ attorney, Gary W. Adair, did not return calls.

State records show the $190,000 grant the MIW Foundation got was for 40 people from the West Side to take part in its training program.

In all, 47 percent of the grant proceeds went to cover the salaries paid to Hopkins, Nichols and Rasheed, according to a report the nonprofit filed with the IRS.

Those salaries caught the attention of officials with the state Department of Commerce and Economic Opportunity, which monitors hundreds of state grants. After an investigation, the agency concluded that “timesheets were not used to track time towards the grant and that there is no specific documentation to match payments to the particular services performed.”

“DCEO performed a routine monitoring of the grantee, and a number of issues were identified, including disallowed costs, lack of supporting documentation and a potential conflict of interest,” agency spokeswoman Marcelyn Love says. “In February, DCEO . . . froze all cash and funding from the department to this organization.”

Last month, the agency began taking steps to recoup the grant money.

Also last month, the Chicago Sun-Times reported that a Chicago nurse who’s been indicted in a downstate fraud case has told authorities in Springfield that “thousands of dollars” in state grants awarded to bolster health care in minority communities instead went to pay campaign workers for Hendon and for Democratic candidates Hendon supported.

Hendon and his lawyer, James Montgomery, have declined to comment.

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