City attorney says no violation in deal involving councilman’s nonprofit
CHARLOTTE, N.C. (WBTV) - Charlotte’s city attorney says local and state rules don’t prohibit the city from working with a councilman’s nonprofit for a career training program.
City Attorney Patrick Baker sent a memo to council members on Sunday detailing his review of a proposed program involving a nonprofit run by Councilman Tariq Bokhari that would train workers for the financial tech sector.
In his memo, Baker said while there is no clear violation of conflict of interest rules, city council should still vote on the proposed program and Councilman Tariq Bokhari could recuse himself from the vote.
The memo centers around Carolina Fintech Hub (CFH) and its president, Bokhari, which WBTV reported on last week.
As part of a program to bring people back to work after the pandemic, the City of Charlotte would grant $1.5 million in money allotted to the city by the federal CARES Act as a stipend to people being trained by CFH.
Private donors, mostly banks, would then guarantee $5 million in salaries and overhead to CFH for the training program.
The CFH training would guarantee training and employment for 90 people and target people who lost their job during the pandemic.
According to the memo, Baker began reviewing the proposed arrangement after complaints from Councilwoman Dimple Ajmera and other residents. While a city ordinance does allow for an independent, third-party review Baker wrote that there was no need for a full outside review since the program has not yet been implemented.
Baker’s review focused on the contract between the city and an as-yet-unnamed company that will administer the $1.5 million to those being trained by CFH. But the memo does not address the additional $5 million in salaries and CFH overhead being given to CFH by private donors as part of the same program.
Bokhari addressed the use of the private money in a recent email to councilmembers.
“The private sector would ensure the funding for overhead and job placement commitments was achieved and administered,” Bokhari wrote.
Bokhari wrote that the overhead was for “$365k for direct overhead spend (in addition to raising the $4.95M of 2021 job placement salary commitments) to cover curriculum, instructors, laptops etc if we were to recall are the timeline up to 2020 instead of out normally planned 2021 next cohort.”
According to CFH’s 2018 Form 990, Bokhari made $200,000 as president of the nonprofit that year. That accounted for roughly one fifth of CFH’s revenue in 2018. That same year, the organization’s tax filing shows, CFH paid $75,000 in other salaries and wages.
The memo from Baker did not address any of those subjects. Instead, it focused on existing state and local rules governing conflict of interest.
Baker concluded that the proposed arrangement would not violate North Carolina statute GS 14-234 or Chapter 8, Article IV Section 8.101 from the city’s code of ordinances.
“Based on information provided by the City Administration and Councilmember Bokhari, CFH is not entering into a contract to provide services to the City and will receive no direct funding from the City (CARES Act funding or otherwise) for its role in the ATICC program,” Baker wrote.
“Absent information suggesting that CFH has effectively become an independent contractor of the City through a financial arrangement with another entity, I do not believe that CFH’s participation in the ATICC program as proposed would violate Section 8.101 of the City Code.”
Baker did say it was appropriate for council to vote on the proposed arrangement and for Bokhari to recuse himself.
“Should such a vote occur, it is my opinion that under the specific facts of this matter, GS 160A-75 would allow Councilmember Bokhari either unilaterally recuse himself from voting or be excused from participating from voting on the matter with a majority vote of Council,” Baker wrote.
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