BATON ROUGE, LA (WVUE) - Louisiana's state treasurer is blasting a New Orleans-based nonprofit for spending of federal funding on luxuries and other personal expenses. And he's calling for strong disciplinary action at the Department of Health and Hospitals, which oversees the company's grant funding.
"If I sound upset, I am – because I'm sick of it," says Treasurer John Kennedy.
Kennedy saw FOX 8's reporting last month on the nonprofit, Alternatives Living, LLC. – including one officer's Facebook photos and company credit card statements – and he says he was outraged.
"I've seen a lot of waste in government," Kennedy says. "But I would say that this one qualifies as the porker of the year."
Our reports showed the nonprofit owes the state and the Internal Revenue Service $1.3 million in unpaid payroll taxes and penalties. At the same time, the nonprofit's officers spent tens of thousands of dollars of agency money on meals and travel - all while being fully funded by taxpayers.
Last year, they received nearly $3 million in government grants to take care of the homeless and disabled.
"There's no way to defend this," the treasurer says.
Our investigation revealed photos posted to Facebook by the nonprofit's director of programs, Ada Craige-Roberson. One from April 2012 shows "the family" outside Red Fish Grill, after a "delicious brunch." Another shows Craige-Roberson with her husband Rickey – he also works at the nonprofit as the chief financial officer. They're inside the restaurant in that photo; the caption reads, "Rick and I at Red Fish getting our Easter eating on." The nonprofit's credit card records show the agency paid for a meal at Red Fish Grill, on that same day. The cost was $357.
A few weeks later, Facebook shows the family had a Mother's Day brunch at Copeland's. Credit card records for that day show the agency paid a $202 dollar at Copeland's.
In four years, the nonprofit picked up their restaurant tab 343 times.
"I don't know these folks," Kennedy says, "but they're like a bunch of pigs at the pastry cart – except the pastry cart was taxpayer money."
We also found examples of the nonprofit paying for cruise expenses, including the Carnival Conquest, Carnival Liberty, the Atlantis, Royal Caribbean and even cruise parking.
Whether it was intentional or not, there was certainly a decision made by the company officers to put these personal charges on the nonprofit's credit card - instead of paying payroll taxes.
When we put that to Rickey Roberson during an interview earlier this year, he said, "Well, that's true. But like I said, it depends on what the charges are - because sometimes, if I'm working while I'm on vacation or something like that, or even if I'm out of town, if I have Internet access that I need to use to handle the company's business, then that's an appropriate charge."
As for the spending on cruises, he told us, "I don't recall putting any cruises on the credit card that I can remember. However, when we were on vacation, like I said, we may have personal… we may have charges for Internet access and stuff like that - and if we were talking, maybe a meal or something like that."
Kennedy says, "Commander's and Ruth's Chris Steakhouse, leasing a $500-a-month Mercedes, taking cruises and saying 'Well, we're working all the time so we can charge our time [for] the cruises…' If you did that in the real world, in a real business, at a minimum you would be fired. And you would probably be subject to theft charges."
The state Department of Health and Hospitals runs Alternatives Living's grants. Kennedy wrote a letter to the head of DHH demanding "accountability." "The person responsible for this at the Department of Health and Hospitals needs to be fired," he tells us.
DHH Secretary Kathy Kliebert responded to Kennedy, writing, "I am deeply concerned both for the stewardship of public funds and for the well-being of the individuals served by Alternatives."
DHH says Alternatives Living has been providing good service. But Kennedy says that answer's not good enough for him, and he wants the department to be more aggressive with this nonprofit, whose officers have ignored paying taxes and instead used that money to essentially live the good life.
"You would think the DHH would immediately be calling for an investigation and calling the auditors and sending in, calling the U.S. attorney," he says. "But they haven't, they've defended it. They've defended this group and said they provide high-quality services. Are you kidding me?"