WEEKLY NEWS DIGEST (July 2-8, 2012)


Familiar Face to Run Espada’s Clinic.” By Jacob Gershman. Wall Street Journal.July 1, 2012. The Bronx health clinic plundered by Sen. Pedro Espada Jr. may soon be coming back to life under new management. The Institute for Family Health, the largest network of community health centers in the state, has applied to take over Mr. Espada’s flagship clinic, Soundview Health Center. The facility stopped serving patients several weeks ago after the state cut off Medicaid funding following Mr. Espada’s federal conviction on charges of stealing about $500,000 from the clinic. Mr. Espada faces another federal trial on tax evasion charges next year. The Manhattan-based institute moved into Soundview’s 36,000-square-foot property last week when the clinic surrendered and transferred its lease, said Dr. Neil Calman, the institute’s co-founder and CEO. The clinic’s name would change to the Stevenson Family Health Center, sharing the name of a surrounding apartment complex. And its new board won’t have any ties to Soundview or Mr. Espada. For Dr. Calman, the takeover of Soundview is something of a reunion. He was Soundview’s first medical director when Mr. Espada opened it in 1981 and worked there until 1984, when he co-founded the Institute for Family Health. Soundview has had trouble running at full speed since the state moved to cut off Medicaid funding. It stopped seeing patients altogether shortly after Mr. Espada’s conviction. Only its pharmacy continues to operate. It isn’t clear when the new health center will be up and running. The move still needs the approval of state and federal health regulators. The building, Dr. Calman said, is in ramshackle condition and needs about $2 million in repairs. The examination tables and dental chairs are worn. But most alarmingly, the center lacks central heating and cooling. To circulate air into inner offices, the staff had relied on portable fans, violating health safety codes.

Ford Heights mayor’s taxpayer-funded nonprofit under investigation; Job-training group suspended from state, county grant programs over spending questions.” By Steve Schmadeke. Chicago Tribune. July 3, 2012. A south suburban mayor’s taxpayer-funded nonprofit has been suspended from state and county grant programs over questions about its finances and accounting, the Tribune has learned. In addition, the Illinois attorney general’s office has started an investigation into the Commission on Economic Opportunity, the job-training nonprofit directed by Ford Heights Mayor Charles Griffin. Griffin said investigators have been poring through the nonprofit’s records and interviewing employees, asking about wrongdoing, but he said the probe is nothing but a “witch hunt” and “political BS.” The nonprofit has paid hundreds of thousands of dollars in salaries and cars to Griffin and other executives, and the board charged with watching the purse includes Griffin’s family members and political supporters, records show. No criminal charges or lawsuits have been brought by the state. The Tribune obtained audit information, letters, grant applications and other documents about the nonprofit from Cook County and through an open records request. CEO also provided some financial records upon request. Investigators have subpoenaed records from Ford Heights and the nonprofit, according to Griffin. He said one target of the investigation was money received by the nonprofit through the Put Illinois to Work program, a massive influx of federal and later state dollars that allowed his organization to provide administrative services for 700 workers hired by various employers in 2010, some of whom were interviewed by investigators.
The nonprofit was founded in 1990, and Griffin was brought on part time in 1992, long before he became mayor in 2009. The mayor and his supporters say CEO has helped train thousands of people to use computers and work in building trades.

Kabbalah Centre case taken up by federal authorities, police say; Palos Verdes Estates police have turned over files concerning key Kabbalah figure John E. Larkin, longtime business manager of an elderly heiress, to federal agents.” By Harriet Ryan. Los Angeles Times. July 3, 2012. Federal authorities have taken over an investigation into the management of an elderly heiress’ fortune by a key figure at the Kabbalah Centre, police said Tuesday. A supervisor with the Palos Verdes Estates Police Department, which had led a criminal probe into the handling of the housebound widow’s affairs, said the department turned over files concerning her longtime business manager, John E. Larkin, to federal agents last month. Sgt. Steve Barber declined to name the agency but said its focus was “financial activities” involving the 88-year-old heiress, Susan Strong Davis, and Larkin, a veteran Hollywood business manager who helps oversee the Kabbalah Centre’s money. The Internal Revenue Service has been investigating the Los Angeles-based spiritual organization, known for celebrity followers such as Madonna and Demi Moore, for tax evasion since 2010. A federal grand jury in New York has issued subpoenas for records relating to its controlling family, the Bergs, and the center’s assets, which are estimated in the hundreds of millions of dollars. An IRS spokeswoman declined to comment, saying federal law barred the agency from confirming or denying investigations. Larkin, 64, Davis’ longtime business manager and a close associate of center founders Karen and Philip Berg, came under law enforcement scrutiny in April after a Times report about his handling of Davis’ money. The heiress has spent at least $2.65 million in recent years building a home in Beverly Hills near the Kabbalah Centre despite suffering from what relatives describe as dementia. Larkin sold her a lot he owned as a site for the home in 2009 for what real estate filings indicate was a $300,000 profit. He has overseen the ongoing construction, approving the design of the four-bedroom home and instructing the builder earlier this year to install a kosher kitchen. Davis, who has no children, has lived in a large Palos Verdes Estates home overlooking the ocean for 30 years. Relatives said she never mentioned moving to Beverly Hills or talked about the Kabbalah Centre. Tax records show that in 2005, a period in which her nieces said she was still lucid, she gave $600,000 to the Kabbalah Centre’s children’s charity. Subpoenas in the IRS investigation have listed that nonprofit, Spirituality for Kids, as the subject of the tax evasion investigation

Alumni Criticism Grows Over Horace Mann’s Response to Reports of Sexual Abuse.” By Jenny Anderson. New York Times. July 4, 2012. The athletic field and an endowed chair have been stripped of their honorary names. Security measures have been discussed. The head of school has been busy late into the night, speaking with detectives and alumni, two of whom showed up at his home for a 10 p.m. visit that lasted nearly three hours. This should be a moment of celebration for the Horace Mann School, which is commemorating its 125th year and just sent another crop of young men and women off to the nation’s best colleges. But since an article in The New York Times Magazine last month described a pattern of sexual abuse of students by teachers in the 1990s and earlier, a hurricane of emotion and reaction, aided by social media, has engulfed the school and placed its characteristically guarded leadership on the defensive.
Thousands of alumni have gathered to discuss the allegations on Facebook and in person, on a long, dirt road in Vermont and in restaurants and homes in New York City. Victims have made allegations against more former teachers, one of whom publicly admitted having had sex with several students. The Bronx district attorney’s office and the New York Police Department have opened Horace Mann abuse hot lines. The revelations come at a particularly delicate time for Horace Mann: while it deliberates how to respond to the victims of the abuse and to the larger school community, it also is seeking donations in tribute to the school’s past and through a drive to raise $90 million for new facilities. School officials issued a statement the day the article was published online, and when many alumni criticized the statement as being cold, Thomas M. Kelly, the head of school, followed up with a second letter promising to “develop and implement a thoughtful process that places the first priority on those alumni most in need.”

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