Congresswoman Nydia Velázquez became alarmed when reading the New York Times (NYT) piece on Jack Brown III, who as the chief executive and founder of CORE Services Group, is one of the biggest and highest paid operators of homeless shelters in the City. The NYT article alleges that Brown’s shelters lack necessary resources such as job assistance and the services that his shelters provide are all provided by businesses (catering, maintenance, security, etc.) Brown runs. Adding to his acts of “self-dealing” he has employed multiple family members. Residents of the shelters interviewed for the piece claimed they had to live with mold, mice, and cockroach infestations, and they were served spoiled food. CORE has denied any wrongdoing.
That the City had been aware of Brown’s questionable operations and continued to fund CORE, propelled Velázquez into action. On October 6, she sent a letter to Steven Banks, Commissioner of New York City Department of Social Services.
“Lack of proper oversight and responsibility of public money, unfortunately, seems to be a pattern and practice when it comes to the City’s shelter system. The Times story further reveals that the City has directed $2.6 billion to nonprofits to operate homeless shelters, this year alone. And many of these organizations are already on an internal City watch list because of financial problems and issues associated with conflicts of interest,” said Velázquez in her letter. “As the highest-ranking member from New York City on the Housing, Community Development, and Insurance subcommittee in the House of Representatives, with jurisdiction over all federal housing and homelessness matters, it is my duty to help provide proper oversight and accountability of public resources.”
Representative Velázquez then requested answers to be sent within 30 days to the following questions:
1) Did any of the funds the New York City Department of Social Services (“DSS”) direct to CORE, or any entity associated with Mr. Brown, originate from a federal source?
1a) If “YES,” please provide the federal program, including the federal agency or department, responsible for administering the money to DSS. Please also provide the exact dollar amount of federal money DSS directed to CORE or an entity associated with Mr. Brown.
2) As stated above, The Times reports that City officials have known about Mr. Brown’s financial entanglements since 2017 but continued to pay millions of dollars to CORE.
2a) Please describe the application, vetting, and background investigation process DSS undertook before initially contracting with Mr. Brown to ensure public funds would be used for a proper purpose.
2b) When flags were raised about CORE’s spending in 2019,11 what steps did DSS take to ensure public funds were not being mismanaged?
3) Considering the revelations made by The Times, is DSS planning to review its application, vetting, and background investigation process to ensure future non-profit organizations and executives seeking to contract with the DSS are properly investigated prior to receiving public funds?
3a) If “NO,” please explain why the DSS is not planning to engage in this review.
4) According to The Times, last month, DSS instructed CORE to close the for-profit companies associated with Mr. Brown and fold their services into a charity.12 Considering City officials’ apparent knowledge of Mr. Brown’s potential financial entanglements since 2017, why was this decision not made sooner?
5) As stated above, The Times article indicates that at least nine of 62 non-profit groups that run City homeless shelters are on an internal watch list.13 What steps is DSS currently taking to ensure all 62 of these organizations are properly utilizing public funds? And what steps is DSS specifically taking with regards to the nine groups on the City’s internal watch list to ensure they are properly utilizing public funds?
“Claiming to care about the homelessness crisis while using public funds to line your own pockets is an egregious abuse and Mr. Brown must be held fully accountable,” said Velázquez. “In addition, the public deserves answers from the City on how Mr. Brown was able to secure and maintain these contracts in the first place. Especially during a global pandemic where housing conditions have direct links to the spread of COVID-19, the City must be doing everything in its power to advance the needs of the unhoused.”