FOX 8 Investigation: Taxpayer money going to non-profit that no longer exists

NEW ORLEANS, LA (WVUE) - A FOX 8 investigation uncovers what one state official is calling a prime example of government waste. We found that hundreds of thousands of your hard-earned tax dollars were given to a non-profit that no longer exists.

And, if you think that's bad, our FOX 8 investigation also learned that this particular New Orleans non-profit hasn't been operating since 2012. But, each year, the state continued to dedicate a $100,000 in taxpayer money including another $100,000 this year. This, in a time when Louisiana faces it's largest budget crisis ever.

"The Urban Tourism Foundation program, it's difficult for me to think of a more pristine example of government waste of taxpayer dollars," said State Treasurer John Kennedy.

That was Kennedy's reaction when we told him what we uncovered.

"Every time I have had to write one of these checks I have wanted to throw up. I mean, it's just a total waste of taxpayer money," Kennedy said.

We found more than $350,000 from state gambling revenue just sitting in a fund allocated for the non-profit group the New Orleans Urban Tourism and Hospitality Training in Economic Development Foundation. But that group is now defunct.

"It's just why people are cynical about government. I can't blame them. The Legislature is up there right now talking about raising taxes but yet people see these instances of just blatant, unadulterated fraud and waste," Kennedy said.

We reached out to the foundation for comment, but the former board president instead sent us a letter saying the board "allowed the foundation to become inactive by non-use, and no other activities were performed or didn't seek any additional funds." He goes on to say "the foundation only functioned and received funds for that one year."

That was 2011-2012. Despite that, the fund will get another $100,000 this August. And here's why: according to a state law that governs gaming fees and taxes, a portion of that money "shall be deposited in and credited to the New Orleans Urban Tourism and Hospitality Training in Economic Development Foundation Fund." That law goes on to say the fund "shall be used solely and exclusively by the New Orleans Tourism Hospitality Training and Economic Development, Inc."

"We've got roads to pave, we've got kids to educate, we've got coastline to restore, we've got a 1.8 billion deficit, and part of the reason we have a deficit is because of this kind of nonsense," Kennedy said.

What's more, only the Legislature can change that law or free up the money in the fund.

"We can't introduce any new bills so it's impossible this session," said Sen. J.P. Morrell, D- New Orleans. "The state will probably miss out on that $450,000 as far as being available during the budget crisis."

Morrell says with the current legislative session coming to an end, it's unlikely any action will be taken before cuts to other agencies and organizations are made. That will be heartbreaking news for some who desperately need that money.

"You have a tremendous amount of money sitting in a piggy bank that is like an iron-clad diamond piggy bank that we can't break into to get that money when we desperately could use it," Morrell said.

And, as troubling as that may be, both Kennedy and Morrell said there are likely other funds just like the Urban Tourism fund that are receiving even more taxpayer money.

"This is a prime example of why taxpayers ought to be skeptical, they ought to call their governor and their treasurer and their legislator and say y'all stop doing this kind of stuff," Kennedy said.

According to the letter from the former board president of the Urban Tourism fund, the program was initially set up to help minorities and other underserved populations in inner city New Orleans get involved in the tourism industry. Once the group decided it no longer would operate the training program, it asked for a reallocation of its money to Medicaid. The fund appears to reflect that reallocation in 2011. But, the fund continued to get a $100,000 in taxpayer money each year after that.

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