Malie was facing serious charges. She'd been accused of mishandling funds that were funneled through the federal government's Housing Opportunities For Persons With AIDS (HOPWA) program. A stinging review of the program had been written by the city auditor months earlier, and on November 12, 1998, Malie was put on paid administrative leave. According to Malie, the passwords on her city computer were changed, and her fellow employees were told not to associate with her.
At the core of the auditor's report is the Sunshine Health Center, a nonprofit group based in Pompano Beach. For four years more than a million dollars in federal grants was given to Sunshine to purchase and renovate a 32-unit housing facility and two single-family homes for people with AIDS. But by late 1998 the buildings were in disrepair and Sunshine was in financial disarray. The city audit had been prompted by an FBI investigation of the nonprofit group that continues to this day, according to one source familiar with the federal inquiry. (The FBI would not comment on the investigation.) The city auditor, Allyson Love, concluded that Sunshine's situation was indicative of widespread problems caused by a lack of oversight of the HOPWA program.
As Malie sees it, she was being set up to take the fall for the boondoggle. At one point during the February hearing, Witschen noted that the city would need time to make a decision about how to proceed. "We probably will not make a response today," he said. It's not clear from the transcript of the meeting if he was trying to be funny. The city's response, it turns out, took much longer than a day -- five months longer.
During that time Malie was not contacted by the city. Its only acknowledgment of her existence, she claims, were her paychecks, which total $56,181 a year. Malie had already been on paid leave for three months, so the next five months would add up to the equivalent of $40,000 worth of taxpayer-bankrolled vacation pay. But the leave, for Malie, was no vacation. She didn't know whether she'd ever get her job back, and during the leave her long-time boyfriend died of Hodgkin's lymphoma. "It was not a fun time," she recalls, "but it did give me time to be with him."
Finally on Friday, July 9, Witschen rang Malie with news: She was to report back to work on Monday morning. He also told her a letter of reprimand would be placed in her personnel file.
But in attempting to saddle Malie with blame for the mismanaged funds, the city did not count on one possibility: that the soft-spoken, 50-year-old bureaucrat would continue to fight back. Malie returned to work, but she steadfastly contends that she did nothing wrong, that she was unfairly required to work the equivalent of two jobs for a year and a half, and that the city audit is seriously flawed. Among the flaws: Malie (who is not mentioned by name in the 18-page audit) was never questioned by Love about the Sunshine funds. So getting her job back is not enough. Malie wants the letter of reprimand removed from her file, corrections made to the city audit, and reimbursement for the fees she had to pay a lawyer to assist in her defense.
"I'm not asking the city to do anything but fix what they did," she says. "They've been very careful to keep my name out of it, but it doesn't matter. It's a small town. Everyone knows I was in charge of the program."
For that same reason, Malie shares at least some of the blame for allowing Sunshine Health Center to squander more than $1 million in government funds. But she is not alone. Since the HOPWA program began, county and city officials have allowed the program to falter, and at the root of the most egregious problems is the Sunshine organization itself. Even after several investigations and a brush with financial death, the 35-year-old nonprofit group continues to operate a health clinic in Pompano Beach. It is also under investigation once again -- this time for Medicaid fraud.
The most trenchant symbol of the Sunshine debacle is an eyesore of a structure at 637 SW 15th Avenue in Fort Lauderdale. Every orifice of the gray-and-white concrete building in the Riverside Park neighborhood is plugged with plywood. The parking lot is strewn with debris. Tufts of grass sprout from what once was blacktop. No one -- HIV-infected or otherwise -- has lived there for almost a year.
"That building is kind of a hellhole," says Fort Lauderdale mayor Jim Naugle. "It probably should be demolished."
Since 1995 about $750,000 in federal money has been pumped into that hellhole. That same year Sunshine Health Center purchased the building and its lot with a $646,000 grant from HOPWA, which is part of the U.S. Department of Housing and Urban Development (HUD). Numerous federal grants followed so that the building could be transformed into a comfortable apartment complex for AIDS sufferers and their families in need of housing. But despite this influx of cash, the building was occupied by Sunshine clients for less than three years -- from February 1996, to November of last year.
So what happened? Sunshine officials are not forthcoming, but city records indicate that mismanagement could have been a big problem. For example, playground equipment was purchased with $4342 worth of HOPWA funds and delivered to Sunshine's Pompano Beach offices in June 1997. But the equipment was never installed. J&R Home Repair was paid $2100 in HOPWA funds last year for two queen palm trees, a sabal palm, and 50 bags of redwood-chip mulch, among other landscaping materials. But there is no evidence that anyone made use of these materials at 637 SW 15th Avenue. Former residents confirm that no palm tree was ever planted, no garden ever mulched. George's Asphalt Service was paid $5584 in HOPWA money to remove speed bumps from the parking lot to prepare for repaving. But the company was never paid to repave; the parking lot now looks like it was shelled by mortar fire.
Former residents of the SW 15th Avenue facility tell stories of squalor, rampant drug use, and negligence on the part of Sunshine officials. Carmela Warren, who lived in apartment 33 for a year with her infant daughter, says hot water was scarce and the wall in her daughter's bedroom was covered with mildew. "My daughter [couldn't] even sleep in her room because I [was] afraid of her picking up some kind of bacteria," she recalls. "I had neighbors who didn't have refrigerators or stoves."
Madeline Morgan, who lived in the apartment complex with her three children, claims that drug dealers often conducted business on the property. "Basically everybody in the building was on drugs," she says, adding that she saw no evidence that Sunshine's management was concerned about the illegal activities. "They really didn't care what went on there," she says. "All they wanted was the rent money."
A constantly changing staff of administrators operated the housing facility for Sunshine, which began in 1964 as a health clinic serving the needs of migrant workers in the Pompano Beach area. Dale Gibson, the group's executive director, came on staff just as the housing program was disintegrating. "I don't know much about what's happening with that [program]," he says, noting that his focus has been on the health clinic. "That's not really something I have much information about at all."
Despite staff turnover Sunshine's board of directors is ultimately accountable for the organization. As stated in the group's bylaws, the board's job is to "manage the affairs of Sunshine." On the board are several prominent Broward County citizens, including Jasmin Shirley Moore, who is sometimes referred to as the "Queen of AIDS" and is the former wife of Fort Lauderdale city commissioner Carlton Moore. Hazel Armbrister, another board member, is a retired teacher who ran for a seat in the Florida House of Representatives in 1998.
Moore, who answered questions on behalf of Sunshine, told New Times that the residents were the problem. Every time a tenant moved out of the complex, she said, the apartment was gutted -- even air conditioning units and ceiling fans disappeared. Drug use and other criminal activities, she added, were not a problem at the facility. "During our time we didn't have that kind of stuff going on," Moore said. "It was a great place."
Despite Sunshine's claims to the contrary, Morgan, Warren, and other residents became so fed up with their living conditions that they formed a tenant's association in 1997 and enlisted the help of Legal Aid Service of Broward County. According to a list of problems drawn up by the association and hand-delivered to board chair Lula Myers and Thomas Dawson, who was executive director of Sunshine at the time: Toilets didn't flush in some apartments; many units were ant- and/ or roach-infested; locks on windows were broken; and most of the washers and dryers in the laundry room were inoperable.
The residents weren't the only ones concerned about the SW 15th Avenue facility. Estelle Abrams, a detective on the Fort Lauderdale code-enforcement team, was aware of the infusion of government funds and recalls driving by the building on an almost daily basis, wondering when conditions would improve. One apartment, she recalls, had a malfunctioning oven that shot sparks whenever it was turned on. "Instead of giving them a new oven, Sunshine gave them a fire extinguisher so they can shoot the sparks out," Abrams says. She notes that the only work permit that was granted for renovations was for the installation of an air conditioner -- in the administrative office. "You have no idea the crackerjack way they went in there," she says.
According to HUD guidelines for the HOPWA program, grantees "must provide safe and sanitary housing that is in compliance with all applicable state and local housing codes, licensing requirements," and other regulations pertaining to building standards. Abrams continually cited the property for code violations, and when she got no response from Sunshine, she wrote letters to each board member. Lula Myers finally agreed to meet with Abrams at the property in June 1998. When Myers arrived she was issued a notice to appear in court and was criminally charged for 13 violations. Myers, who did not respond to inquiries for an interview for this article, pleaded no contest in August and was fined $1850.
Abrams was also in touch with Kathryn Malie, who was then interim director of Fort Lauderdale's housing and community development office. Abrams says the city didn't seem to care that grant dollars were apparently being squandered. "I tried the city for months from the fall of '97," she says, noting that when she threatened to charge Sunshine officials criminally, the city's response was, "Go ahead."
Malie counters that she was trying to work with Sunshine to get the property turned around. She says she met with residents, Sunshine board members, and Legal Aid representatives on several occasions. The code team, she believes, was only interested in putting people in jail. "Instead of trying to help people, they just kept trying to arrest them," she claims.
Even if Malie was making a good-faith effort to work with the folks at Sunshine, she wouldn't have been able to finish the job. At about the same time Myers was charged with code violations, Faye Outlaw was hired as director of Fort Lauderdale's housing and community development office. Two months later Sunshine's HOPWA funds for rental assistance were terminated. Soon thereafter the tenants at 637 SW 15th Avenue were relocated to other homes in Broward County, and the Sunshine facility was boarded shut. An FBI investigation of Sunshine was under way, and city officials were taking no chance. Malie was cut out of the loop on all HOPWA matters, and she believes the city attempted to save its neck by making her the scapegoat.
Sunshine had other problems to worry about. Two houses the organization had purchased with $156,000 in HOPWA funds weren't faring much better than the apartment complex. At the moment both are vacant, according to Sunshine officials, and it's unclear how long they've been empty. Nobody responded at either house when a reporter knocked on the front doors of the Pompano Beach and Hollywood residences.
So the looming question -- especially for those AIDS victims in need of housing -- is this: What will happen to the three HOPWA-financed buildings?
Last February the Sun-Sentinel reported that the City of Fort Lauderdale had "seized control" of the SW 15th Avenue property, but that's not exactly the case. Although Sunshine still owns all three properties, ownership is contingent on the HUD guideline that the sites be used for AIDS housing for at least ten years. Because the properties appear to have been abandoned, the city is trying to foreclose on all three and has asked HUD to exempt the SW 15th Avenue property from the ten-year rule. This would allow the city to turn the property over to the Fort Lauderdale Housing Authority, which could use it to help homeless folks in general.
At least one AIDS charity, Shadowood II, has expressed interest in taking over the Sunshine facility. Richard Colbert, executive director of the nonprofit group, which provides transitional and permanent housing for people living with HIV, believes that the facility should serve AIDS patients only. He notes that Shadowood provides shelter for about 60 people and -- like most AIDS-housing charities -- has a long waiting list.
"We have had more people this year than we have ever had -- ever, ever, ever," Colbert says. "There's an increase in HIV homeless people. Why there is so much of it, I have no idea."
Colbert inspected the 32-unit facility last month. He says most of the apartments need new air conditioning units and the building needs to be repainted, but it's salvageable -- if he can get financial help from the city. "It's in better shape than most of the buildings in the neighborhood," he says.
Residents of the Riverside Park neighborhood beg to differ. They want the building destroyed. For more than five years, they've struggled to transform the drug-ravaged area into a marginally middle-class enclave. Tom Andrew, vice president of the Riverside Park homeowners association, says that even before Sunshine took over the SW 15th Avenue property, it was a black mark on the community. He notes that the apartments, which have just one exit, are fire hazards and would not meet current safety codes for apartment buildings. "It's our contention that the design is dehumanizing," he says. "They're chicken coops."
The homeowners association has made its opinion clear in several letters to city commissioners, but the prospect of destroying a building that has swallowed up about $750,000 in federal funds since 1995 is not something city officials would have an easy time explaining to HUD. It is possible, under HUD guidelines, that Fort Lauderdale would be forced to give the grant money back to the feds if the facility is demolished.
"Unless we were able to get relief from the federal government on the repayment issue, I'd have a very, very difficult time recommending that to the city commission," says Pete Witschen, assistant city manager. "That would be a tough financial position to take."
Harry Garte, a Miami-based HUD official who is intimately involved with Fort Lauderdale's HOPWA program, declined to comment for this story. But a spokesman for the agency says this: "We are always concerned when funds that are intended to provide an essential service to the community are expended and the purpose is not achieved. We will continue to work with Fort Lauderdale to be certain deficiencies in their delivery systems are corrected and that everything possible is done to insure that programs are run successfully."
Sitting in an Italian restaurant on Oakland Park Boulevard on a recent weekday afternoon, Kathryn Malie is evidently weary of the whole bureaucratic quagmire. She sighs often as she discusses both Sunshine and the HOPWA program. Her hair is the color of copper wire, and she's wearing a blazer and a pink sweatshirt. She is short, just a few inches over five feet, and acne scars are evident on her face. She speaks softly -- as if someone might overhear -- in the near-empty restaurant.
Malie is not naive enough to believe that Sunshine is innocent. She understands that the organization failed to maintain its buildings, but she also believes the city should have continued to work with, not against, Sunshine. Most of all, she absolutely insists that she is not to blame for the three empty government-purchased buildings.
To understand her defense, it's necessary to know a little history about HOPWA funding. According to the program's guidelines, the largest city in any given county is responsible for disbursing HOPWA funds throughout the county. In Broward County the job goes to Fort Lauderdale. But during the first three years of the program, from 1993 until 1996, the city actually handed off these duties to the county. The thinking was this: Because the county doles out most federal dollars for AIDS services, it would be better equipped to distribute the HOPWA grants as well.
But such was not the case. Under the county's watch, HOPWA was plagued with problems. Chief among them was that many grant dollars were simply not being spent. In the summer of 1996, according to city records, the county had disbursed just $3.2 million of the $7.7 million made available by the federal government. AIDS organizations were spending money on housing services but not being reimbursed in a timely manner, which put the shoestring-budgeted charities at financial risk.
Out of frustration the city decided, in early 1997, to distribute the funds itself. At about this time, Malie, who was then serving as a community-economic development planner, was named interim director of the housing and community-development office. One of the key accusations in the audit that forced Malie into an eight-month leave is that Sunshine Health Center received money for services, such as mental-health counseling and substance-abuse treatment, that were never provided.
During her hearing in February, Malie pointed out that the auditor, Allyson Love, had misread the HOPWA contract. Although Sunshine Health Center had applied for various types of funds for the 1996-97 fiscal year, it received money only for rental assistance. Sunshine requested $26,000 for outreach services, $125,000 to provide transitional housing, $80,000 for substance-abuse treatment programs, $70,000 for mental-health and family counseling, and $97,668 for renovations to existing facilities. But all of these grant requests were rejected by the city. The only allocation that Sunshine received for the 1996-97 fiscal year was $210,000 to provide rental assistance for tenants at the existing properties.
Holding Malie accountable for Sunshine's housing woes is problematic for other reasons. The bulk of the expenditures questioned in the audit took place before the city took control of the HOPWA program in 1997. The funds for Sunshine's purchase of the SW 15th Avenue property and the two single-family homes in Pompano Beach and Hollywood, for example, were allocated by the county, not the city.
In her audit Love also concludes that Sunshine's deficiencies are reflective of the entire HOPWA program. A total of 11 nonprofit groups have received HOPWA funds since 1993, according to city records, but Sunshine is the only group mentioned in the audit. No evidence is presented to suggest that any other group experienced problems similar to Sunshine's.
Love says that she has only "flipped through" Malie's rebuttal and cannot respond to specific criticisms. But she says she stands by her audit entirely. "I think the findings and the subsequent management response to it speak for themselves," she adds.
Witschen says he sees no reason for changes to the audit either. "I don't believe the audit has fatal mistakes, but I know that's [Malie's] assertion," he says. Malie's interpretation of HUD guidelines is wrong, he adds, and the correct disciplinary action was taken against her.
He cannot account, however, for the city's decision to saddle Malie with two jobs over an 18-month period. While Malie served as interim director of the community development office from January 1997 to June 1998, nobody was hired to fill her old position of community-economic development planner. In other words she was essentially performing the duties of two employees but getting paid for only one job.
Witschen says he does not know why it took so long to find a new director of housing and community development. Filling that position, he explains, was the responsibility of the city's planning and economic development director, Scott Adams, who has since left city government. Witschen also cited staff turnover as the reason it took eight months to complete the investigation of Malie. Because many of the people who had intimate knowledge of HOPWA have left the city's employ, he says, it was difficult to reconstruct events and pinpoint exactly who was at fault. "The people that were most directly involved at that point weren't here to help provide the documentation for a review, and that had to be re-created," he adds.
But those on the receiving end of HOPWA funding are able to comment on Malie. Representatives of many nonprofit groups in the area say that she was a font of knowledge and often helped groups navigate the pitfalls of applying for grant money.
"She is a true advocate of the people of the city," says Geraldine Pipitone, executive director of House of Hope, which works primarily with people who have substance-abuse problems.
Richard Colbert, of Shadowood II, says that more than 80 percent of his group's budget comes from HOPWA grants. "Kathy Malie, from my point of view, has had an awful lot to do with our having success and becoming a success," he adds. "She's been aboveboard, honest, and fair with us all the way down the line."
In fact some AIDS-housing providers say that, since Malie's departure last November, they've had almost no contact with the city regarding the HOPWA program. Normally, according to grantees, the city holds meetings every April to discuss priorities for HOPWA funding. By September a request for proposals (RFP) is usually issued, and money is allocated by the start of the fiscal year -- October 1.
That's not the case this year. The first meeting didn't take place until June, when Faye Outlaw, who now oversees the HOPWA program, told grantees that the city was considering handing administration of the program back to the county. "It threw us all into kinda shock," says Colbert.
Ultimately the city commission -- noting the county's past problems in administering the HOPWA program -- voted, during a July 7 meeting, against letting the county administer the funds. "We'll be moving forward with that process and RFP-ing it," Outlaw now says. "We did not want to advance that process, given that there was that discussion."
Angelo Castillo, director of human services for Broward County, says his agency was enthusiastic about the possibility of running the HOPWA program. "The hope was to create a continuum of care that would include housing and services under one roof," he says.
Some AIDS groups worry, however, that, because the distribution process is late in getting under way this year, they may not get the funds they need in a timely fashion -- which is what happened when the county oversaw the grant program. According to the most recent HUD figures, as of May 1999 Fort Lauderdale had spent less than $7 million of the $15.3 million made available under the HOPWA program over the last four years.
"The HOPWA dollars are kind of up in the air," says Pipitone, of House of Hope. "Nobody knows what's going to happen at this point."
Tom Shidaker, executive director of Broward House, the county's largest provider of housing to people with AIDS, told city commissioners in July that its HOPWA-funded programs could begin to run short of money as early as March if steps weren't taken to jump-start the allocation process. He now says Outlaw has assured him HOPWA dollars will be made available to ensure that the group does not run out of money, even if it's done on a stopgap basis. "The city has told me on two different occasions that they will make sure funds are available," Shidaker says.
Adds Outlaw: "There will not be a single gap in funding for HOPWA."
No matter what happens with the HOPWA program, it is doubtful that Sunshine Health Center will ever benefit from its largesse again. You get only so many chances to squander a million dollars.
On a sunny September weekday morning, Dale Gibson is standing in front of Sunshine Health Center's yellow stucco clinic in Pompano Beach. Surrounding him is a group of elderly black women slowly making their way -- many via walkers and canes -- to a bus. Gibson, the center's executive director, is dressed in a pink shirt and smart tie. He smiles broadly and exchanges pleasantries with the ladies, making sure that their visit to Sunshine Health Center is a pleasant one.
"The challenge we face is getting the word out, marketing, letting people know we're open again," Gibson says later.
By any reasonable standard, Sunshine Health Center should not be open at all. Even before the nonprofit group faltered in its attempts to provide housing to people with AIDS, it was mired in controversy and financial disorder. At the end of 1997, the federal Health Resources and Services Administration (HRSA) canceled Sunshine's grant of almost $950,000 to provide medical care to poor people in the Pompano Beach area. The head of HRSA at the time noted, in a press release, that "the center failed to resolve serious fiscal, administrative and governance problems that compromised its ability to deliver high-quality health-care services."
In a last-ditch effort to salvage the grant, HRSA had brought in Collier Health Services, based in Immokalee, to work with Sunshine on restoring fiscal order. But Steven Weinman, Collier's chief financial officer, says that the Sunshine clinic in Pompano Beach was in such disarray that his group didn't want anything to do with the clinic. "When we went there, the building was falling apart," he recalls. "If you went to a veterinarian that looked like that, you wouldn't leave your dog there."
Collier has since been awarded the HRSA grant and recently opened the Thomas N. Anthony Medical Center, just a few blocks from Sunshine's clinic. Weinman believes that his organization is capable of providing medical care for all poor people in that area. "I don't really see any reason for Sunshine Health Center," he says.
Even so, Sunshine reopened its doors last November with Gibson, who has worked with several medical clinics in Miami, at the helm -- at about the same time the housing facility on SW 15th Avenue was being boarded up. "Our center was mired in controversy, but since we reopened we're very excited," Gibson says.
Sunshine is banking on young mothers and the elderly -- and the Medicaid and Medicare reimbursements that they draw -- to help the clinic back to financial solvency. "I think Sunshine needs to demonstrate that it can run a clinic effectively before they apply for grants again," Gibson says.
There are already signs, however, that Sunshine has not changed for the better. According to the group's 1998 informational tax return, Sunshine's income for the year was just $148,100. Its debts, meanwhile, totaled more than $1.1 million.
"I really don't know how they manage to keep that place open," says Weinman.
One unsettling possibility is fraud. According to several Sunshine patients, the clinic, when it reopened last November, offered economic incentives to at least some clients for their patronage. Madeline Morgan says that, for almost three months in early 1999, she -- along with other people infected with HIV -- was paid $20 a day, or $100 each week, by Dale Gibson to receive intravenous protein injections at Sunshine Health Center.
"When we got finished, he would call us in the back room, and he would give us money," she recalls.
Morgan adds that Medicaid, the federal health-care program for poor families, was then billed for the services. Patients were told the protein infusions -- which are of dubious medical value -- were part of a research program. The paydays were eventually reduced to three times a week, according to Morgan, and then stopped completely.
Carmela Warren and her fiancé, John Eric Myers, tell a similar story. They claim they were paid by Sunshine to receive protein infusions, which were then billed to Medicaid. Warren notes that she was eventually cut off by Sunshine officials. "They told me I couldn't come back anymore because my Medicaid wasn't covering it," she says.
Adds Myers: "They was most definitely billing Medicaid."
Although both Morgan and Warren, as former residents of the SW 15th Avenue facility, could be seen as holding a grudge against Sunshine, their accounts are confirmed by others. Two sources who work with HIV patients in Broward County on a daily basis but do not want their names used, say that clients have told them similar stories about Sunshine paying clients for protein infusions. Moreover, Ruben Chavez, an investigator with the Florida Attorney General's Office, confirms that his office is conducting a Medicaid fraud investigation of Sunshine. He would not, however, provide details.
Gibson denies the allegations, calling them a "gross, gross, gross mischaracterization." But his explanation of the misunderstanding doesn't make much sense. He claims that when the clinic initially reopened last November, clients were offered turkeys and gift certificates as both inducements to patronize Sunshine Health Center and as goodwill gestures for the Thanksgiving and Christmas holidays. "In the clients' minds," he says, "they interpreted this as we were paying them."
Sunshine is not the only player in the HOPWA controversy that has returned to business as usual. For three months now, Kathryn Malie has been back at her spacious office in downtown Fort Lauderdale and her duties as community-economic development planner. She spends most days researching various policy questions and searching for new sources of funding for the city. She communicates with her boss, Faye Outlaw, primarily via e-mail and intraoffice memo.
The prospect of finding a new job has certainly occurred to Malie, but she says she wants to get the entire Sunshine episode resolved before moving on. She believes the letter of reprimand in her personnel file would tar her reputation and make getting a decent job difficult -- despite 14 years of work for the city. "I will never manage anything for any city government again," she says. "It's thankless." Malie is even contemplating filing a lawsuit against the city.
In August she had a meeting with another city official -- City Manager Floyd Johnson -- to discuss her insistence that the letter of reprimand be removed from her file, that her lawyer's fees be reimbursed, and that the Sunshine audit be amended. Malie attended the meeting without her lawyer, as the city manager had requested. After discussing her situation for about 30 minutes, Johnson told Malie that he would get back to her in about a week. It's now been two months. She has yet to hear from him.
Contact Paul Demko at his e-mail address:
[email protected]
RELATED LINKS
Broward Regional Health Planning Council
House of Hope
substance abuse center
