County officials fire non-profit over missing million dollars

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by Courtney Zubowski / KHOU 11 News I-Team

khou.com

Posted on August 21, 2012 at 11:13 PM

Updated Wednesday, Aug 22 at 2:10 PM

HOUSTON—It’s money meant to help Houston’s unemployed, but officials say more than a million dollars of it is missing, and other funding also may have been misspent.  Now a well-known Houston non-profit organization is at the center of a controversy, along with a Houston politician.

Before he became a city councilman, Larry V. Green ran HoustonWorks USA, an organization that’s supposed to find jobs for the jobless. Then earlier this summer he left the organization as part of a separation agreement. Now insiders tell KHOU 11 News that Green may have misspent public money on his personal interests, along with leaving the non-profit a financial mess.

Outside of Houston City Council chambers Tuesday, Green said he is not to blame.

“Absolutely not,” said the councilman. “We did over $7 million worth of new business to the organization.”

A recent audit by the Houston-Galveston Area Council (HGAC) found extensive mismanagement at the organization. That report also resulted in the HGAC deciding not to renew a long-standing multi-million dollar contract with HoustonWorks.

“There was a large cash shortage in the organization,” said HGAC Workforce Program Manager Mike Temple. “We identified somewhere between $1 million and $1.5 million.”

On top of it, HGAC officials said the employment group was behind on rent.

“It was a little bit of a perfect storm,” explained HoustonWorks USA Chairman of the Board Howard Lederer.

Lederer told KHOU 11 News his group’s focus on throwing extravagant celebrity galas to raise money didn’t work, something he says the audit made apparent.

“It made it clear to everyone that our financial lagniappe, or wherewithal was really thin,” he said. 

For instance, Lederer says a gala in 2009 that cost about $90,000 to put on only raised $30,000.

And the KHOU 11 News I-Team also found then-CEO Larry Green made a number of questionable and pricey expenses on his HoustonWorks charge card and many of them were for restaurant meals. For example, records showed a dinner for two at the posh III Forks restaurant that included a steak, sea bass, martini, and wine for $145. Records also show Green returning for lunch at the same restaurant that year at the cost of $102 for Green and a guest.

One of his highest charges was for a $197 lunch at a Pappas eatery. All of the meals found in the records were paid for by HoustonWorks.

“It’s business. It’s about business development. We were able to bring in $7 million and we were able to bring in new revenue to the organization,” Green said.

Records obtained by KHOU 11 News also show Green donated HoustonWorks money to charities.

They are also charities it appears he has a connection with.

Green gave the University of Houston Alumni Organization, of which he is a member of, $1500 to sponsor the dessert served at an Alumnae gala.

Records also show he gave $2,000 to another group, the 100 Black Men of Houston chapter, a civic group of which Green was a member. For that donation HoustonWorks got ten seats at a special event.

KHOU asked him about these expenses too.

Larry Green: “As you know we had about $800,000 debt prior to me getting in there.”

KHOU 11 News: “So why, with that debt already there, why $2,000 to the 100 Black Men of Houston Chapter?”

Larry Green: “Again, business development requires that I go to galas and meet with donors.”

We showed the recent audit and credit card statements to the Houston chapter of the Better Business Bureau.

“We are very shocked with what we are seeing at this time,” said BBB Senior Director of Investigative Services Leah Napoliello. “The lunches, the hotel stays, the trips, it’s very out of the ordinary for a charity that’s already having problems with debts.”

“I left in May,” Green said. “And I am pleased and proud of the work we did.”

Officials say as a result of the Houston Galveston Council cancelling its contract with HoustonWorks, the employment group will go from 225 employees to about 25 by the end of the year.

However, HoustonWorks Board Chairman Howard Lederer says you can’t just blame Green for the non-profit’s problem. But, he does add that some of the loss did occur when Green was working for HoustonWorks.

Councilman Green said he would be issuing a statement regarding HoustonWorks, but at press time KHOU had not received it.

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