Despite misuse, most funds not recovered from nonprofit tasked with operating Clean Corps

BALTIMORE (WBFF) — Two years after an inspector general report revealed that thousands of taxpayer dollars were misused by a nonprofit organization, the bulk of the funds remain unrecovered by Baltimore City leaders.

Lazarus Rite, a Baltimore-area nonprofit no longer operational, was awarded a $1.6 million Clean Corps contract when Mayor Brandon Scott first launched the pilot program designed to boost neighborhood cleanups. The funding came from the American Rescue Plan Act, or ARPA, and the organization was given more than $414,000 as an advance.

The inspector general’s report originated from an employee or subcontractor of the nonprofit reporting they had not been paid for their services. The Department of Planning found the organization used ARPA funds to pay for salaries related to other business expenses. The city terminated the contract with Lazarus Rite.

At the time, the Baltimore Civic Fund, which oversees nonprofit spending in the city, indicated it would seek to recoup the funding. However, two years later, records reviewed by FOX45 News show that didn’t happen.

The Civic Fund decided not to pursue fund recovery, citing the nonprofit’s non-operational status and low likelihood of financial recovery, according to records reviewed by FOX45 News. Requests for comment from the Civic Fund went unanswered, despite multiple attempts from FOX45 News.

David Williams, a taxpayer watchdog, criticized the decision and warned that the lack of action could set a concerning precedent.

“This sends a really bad signal for other nonprofits and other entities that are found to have had problems and are wasting taxpayer money,” he said. “This establishes a really bad precedent by the city and every nonprofit, every entity that’s receiving taxpayer dollars, they now see that they can get caught and not have to pay back the money.”

Meanwhile, Mayor Scott announced plans to invest $3 million into the Clean Corps program again in his latest budget proposal. The funding, according to a spokesperson from the Mayor’s Office, will help the program continue working with Civic Woks and Bon Secours Community Works.

“Mayor Scott takes the spending and proper use of taxpayer dollars very seriously: as we have noted previously, it was the effective oversight and compliance work of the Mayor’s Office of Recovery Programs, Department of Planning, and Baltimore Civic Fund that originally identified the issue with this grantee and swiftly addressed,” the spokesperson said via email. “The funding at issue represents less than 1% of total ARPA funding for the Clean Corps Program.”

Beyond Williams, other critics of the program include Councilman Isaac “Yitzy” Schleifer, who has long raised questions about the necessity of Clean Corps.

“I’m not happy to see liabilities that we were told would only last for two years such as Clean Corps continue because I know that that is not an investment,” Schleifer said referring to the latest budget line time for the initiative.

Budget hearings are expected to take place in the next few weeks, and members of the council will have the opportunity to continue question administration and agency leaders.

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