GUEA: Nobody to blame Apparently, Karen Freeman-Wilson had very little to do with the actual operations of the GUEA organization. After all, she said so: Dear citizen: On July 19, 2006, I announced that I would be a candidate for the mayor of Gary in the May, 2007. This decision was made after much prayer and careful deliberation. It was also done in response to many citizens, many of whom have been strangers, who have asked me to run again. Since March, 2007, I have worked steadfastly to develop an agenda that captures the sentiments of residents and addresses the pressing needs of our community. My platform will be developed around a five point plan that focuses on jobs and economic development; public safety; property tax relief; education; and efficient government. In the coming months, I will continue to meet with citizens to develop the detailed platform that will be presented in November, 2006. Since my announcement, my family and I have been overwhelmed by the support from individuals ranging from 8 to 80 and who live in every section of the city. Many have asked me to discuss my role as the attorney for the Gary Urban Enterprise Association. Because I have established a record as a responsive and responsible public servant, I thought that this letter would address questions and provide you with accurate information. First, you should be aware that my firm has served as the board attorney to GUEA since 1993. However, we were NOT the only law firm to provide legal advice during this time. In fact, they employed law firms in Merrillville and Indianapolis to handle many real estate transactions and assist in structuring multiple arms of the organization. From February, 2000 until January, 2001, a time when many of the illegal acts occurred, I was not involved in the private practice of law at all. As counsel to the board, our firm provided advice when consulted during and between board meetings. We were not involved in the day-to-day operation of the organization. We were not responsible for insuring that audits were conducted. That was a board responsibility. Additionally, we were not responsible for making members attend meetings. That was a responsibility shared by the members of the board and the authorities who appointed them (the Mayor, City Council and the Governor). During the course of my representation of GUEA, there have been four Executive Directors and over twenty-five board members. We have now learned that a small number in this group breached their duty to the organization and engaged in illegal and unethical acts. AS IS OFTEN THE CASE WITH THEFT, THESE ACTS WERE DONE IN SECRET AND OUR FIRM HAD NO INVOLVEMENT WITH THIS CONDUCT. The actions were also inconsistent with the organizations strategic plan. Since the discovery of this conduct, I worked with the State of Indiana to seat a new board and have worked with members of the new board to preserve and recover GUEA assets. While we all know that hindsight is 20/20, I often think about what I might have done differently to detect these illegal acts. Rather than addressing my concerns about the lack of a quorum to board members and staff, I could have gone to the appointing authorities (Mayor, City Council and Governor.) This would have given them the opportunity to address the action of board members. The course of events at GUEA also show how important it is for the Mayor and others who appoint to boards to communicate regularly with their appointees to insure that the organizations mission is being accomplished. As Mayor, I would meet quarterly with my appointees and request meeting minutes and other documentation that would enable me to follow the activities of each board and Commission. (I dont want to sound too presumptuous.) In August, 2006, I will host a public forum at the Public Safety Building at 555 Polk Street in Gary. I would love the opportunity to communicate my vision to you in person. This would also be an opportunity to answer any other questions you may have. Also, feel free to contact me in person at 219-880-1751. Karen Freeman-Wilson 2. GUEA Q & A 1. How long have you been the attorney for the GUEA Board? My firm has served as the attorney for the board since 1993. From February. 2000 until January, 2001, I was not involved in the private practice of law. Inga D. Lewis & Associates represented them at that time. 2. Explain your role as the board attorney? As board attorney, my firm answered legal questions from board members and staff; drafted documents as requested; and provided advice during board meetings. We also provided representation in some lawsuits and administrative proceedings. Our firm only offers advice when requested or if we become aware of the need for legal input. Unfortunately, we were not asked for advice when illegal or unethical acts occurred and we did not draft any of the documents that facilitated these activities. In fact, we did not draft all legal documents. There were other law firms that were involved in many transactions. 3. Were all board members and staff involved in illegal and unethical acts? From the investigations it appears that a limited number of staff and board were involved in illegal actions. However, the dollar amount involved was enormous and that is the greatest affront to all of us as citizens. 4. Why didnt you do anything to stop the illegal and unethical actions at GUEA? No member of our firm or I had any knowledge of these illegal and unethical actions until the Times article in December, 2004 and the Crowe Chizek audit shortly thereafter. The staff and board denied wrongdoing at the time of the news article. The wrongdoing was not confirmed until after a review of thousands of documents over 100 hours of work for over 90 days by specialty accountants. All of the illegal and unethical acts were done in secret and without the advice of my law firm. There were also done in violation of the organizations by-laws, state and federal statutes. None of these actions would have been detected in the normal course of our service as board attorney. 5. How was it possible not to know what was going on? The staff and board members that engaged in illegal and unethical activities did not publicize what they were doing. Additionally, the agency had a number of legitimate programs over the past years. These programs included the Kids Enrichment Program (after school tutoring and activities in the enterprise zone); construction and other job training; the Emerson Housing town homes; the home improvement project and small business loan program. 6. After you saying that from 1993 until 2004, you did not know that anything bad was occurring? From 1993 until January, 2000, GUEA appeared to function properly. The organization met regularly and worked cooperatively with Emerson residents. In 2000, I left the private practice of law to become Indiana Attorney General. Even though, my former law firm continued to represent GUEA, the organization increasingly used lawyers from Merrillville and Indianapolis to represent them. 7. Why didnt you require the board to meet in accordance with the by-laws? I advised both staff and board members about the need to meet. I even suggested that they attempt to meet during lunch rather than after work to improve the chance of getting a quorum. I had no control over board members. They were appointed by the Mayor, City Council and Governor. 8. Did your law firm work with GUEA staff on a daily basis? Explain. No, we answered questioned when asked and this may have happened 2-4 times per month. 9. Was Freeman-Wilson & Lewis-Shannon, L.L.C. the only firm that provided legal advice to GUEA? No, there were many other firms in Merrillville and Indianapolis who did work for GUEA. I was not involved in retaining these firms. Additionally, there were many legal documents that the staff simply drafted or modified on their own. 10. Did you work directly with GUEA in procurement of property in Illinois? Explain. We had no involvement in the purchase of property in Illinois. We did not draft any documents or attend a closing for this purchase. We did not become aware of the Illinois property until the December, 2004 article in the Hammond Times. 11. Are you still the attorney for the organization and what have you done to help GUEA recover from the mishap? I represented GUEA until September, 2006 when the board voted to dissolve the entity I assisted the State Urban Enterprise Association Board in making sure that a new board was appointed. Our firm has also worked with the new board to retrieve GUEA assets and defended the agency in claims from others. We have also worked to ensure that law enforcement pursues all parties responsible for criminal activity at GUEA. 12. What is the status of the organization since the discovery of mishap? In February, 2005, a new staff began working under the leadership of Executive Director Ed Gholson, Board Chair Charlie Brown and other board members to pursue housing and training opportunity for Gary residents with a focus in the Emerson area. In September, 2006, the new organization voted to dissolve the organization with the recommendation that the dissolution board create a community trust for the benefit of Emerson residents.
Posted on: Sun, 20 Oct 2013 23:41:04 +0000
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