NEW ORLEANS — A nonprofit started by Mayor LaToya Cantrell has frozen its accounts after receiving a subpoena for financial records from the New Orleans Office of Inspector General, leaving several city-sponsored social programs that depend on funding from the organization in limbo.
Dana Henry, an attorney representing the board of Forward Together New Orleans, confirmed the subpoena for records was served Sept. 8, and that the nonprofit has stopped using its operating account.
That means the nonprofit has been unable to pay the bills for some of Cantrell’s prized social programs, including a final payment of about $5,000 to close out a program called Jumpstart that has provided case management and training to 41 at-risk New Orleans youth.
Gracefully Mindful Wellness Institute, which ran the Jumpstart program for the city’s Office of Gun Violence Prevention using money from FTNO, sent a letter Sept. 12 notifying the city that it could no longer continue operating.
A second program called Earn and Learn that’s aimed at workforce development has also not received the first $75,000 that was set to pay stipends to 100 laid-off workers being retrained through a federal grant.
Other city programs that get money from FTNO include the Gun Violence Crisis Intervention team, which meets with shooting victims at the hospital to try to stop the cycle of violence. That group is counting on $560,000 from the nonprofit starting in January.
FTNO also promised to use a $500,000 grant from Mayors for a Guaranteed Income to pay 125 people $350 a month with no strings attached. City officials said that money has already been disbursed.
“If there is a private donor who has given money to FTNO to support programs, they’re not being paid now either, because it’s all subject to a subpoena by the OIG,” Henry said.
The programming pause comes amid a dispute between board members and Shaun Randolph, the executive director they hired 11 months ago. And it comes after City Council members questioned two contracts Cantrell signed in April to send almost $1.1 million in city money to the nonprofit, which is also known as the Mayor’s Fund and was created in 2019 by Cantrell and Maggie Carroll, who ran the mayor's reelection campaign.
When the investigation is over, FTNO could face the same fate as some of its programs. Volunteer board chair Kathleen Kennedy and treasurer Eric Griggs may not want to deal with the political fallout and could return the city money and shutter the nonprofit for good, Henry said.
“Ultimately, they are going to have to decide about whether to move forward with the legal dissolution of FTNO,” Henry said.
Kennedy backed out of an interview with WWL-TV last week and referred questions to Henry. Griggs hasn’t responded to requests for comment. A third board member, pollster Silas Lee, said he resigned from the board in July.
It’s not unusual for nonprofits aligned with city government to help pay for programs. Financial records show FTNO raised more than $3 million in private donations from 2020 to 2022, and used that money to help residents during the pandemic and to back some of Cantrell’s most ambitious programs. It was able to pay for those programs without charging the kinds of double-digit administrative fees charged by more established fiscal agents.
But the Cantrell administration also sent more than $1 million in city funds to FTNO to serve as a fiscal agent for programs already being run by the administration. Cantrell used one-year agreements with FTNO — which do not need City Council approval — to transfer over about $850,000 from the Wisner Trust account and another $215,000 from the city’s general fund. FTNO earns administrative fees between 5% and 8% for serving as the city's fiscal agent on those contracts.
Randolph, a Los Angeles native who was hired as FTNO’s executive director in November 2021, alleged a majority of FTNO’s board members agreed to cycle off the board in July, but reversed course in August to fire him in a move he said was improper.
Randolph further alleged in emails to the City Council and OIG that public money sent to FTNO was misspent. But Henry said all $1 million in city money is still in the bank, untouched since Randolph deposited two city checks, one in May and the other in July.
Roughly $430,000 in private funds also remain in the nonprofit's operating account, according to figures provided by Henry.
Council President Helena Moreno has questioned why the City Council hadn’t been informed about the city money being sent to Forward Together New Orleans.
“We weren't getting any type of information from the mayor's office as to...why was money being sent to the mayor's nonprofit,” said Moreno, who along with council members JP Morrell and Eugene Green sponsored a resolution in April asking the city’s inspector general to look into the nonprofit’s activities.
The inspector general “will want to know... where did this money come from, where did it go, and who was directing the expenditure of those funds,” said Matt Coman, a former federal prosecutor who reviewed public emails and FTNO financial records obtained through public records requests.
Inspector General Ed Michel declined to comment on a pending investigation.
While the nonprofit is not directly controlled by Cantrell, hundreds of emails reviewed by WWL-TV show the mayor, her campaign director and several senior City Hall staffers helping FTNO raise private donations and helping decide how it should spend the money.
For example, after Cantrell made the difficult decision to cancel Mardi Gras parades in 2021 because of the pandemic, she told her staff in an email that she wanted to issue proclamations to Mardi Gras Indian chiefs to thank them for their leadership. On the same email, Cantrell asked FTNO’s manager at the time, her former political director Trent Butler, to use FTNO funds to pay the chiefs $500 each.
“Do we have some FTNO checks we can cut for support, $500 each(?) No pressure just let me know. It can be housing expense,” Cantrell wrote.
Asked about the mayor suggesting the support payments be labeled a “housing expense,” Cantrell’s communications director Gregory Joseph said it made sense because the nonprofit had already been supporting some housing assistance programs.
“It's a grant, so you can put it under anything," he said.
Joseph also defended city employees’ work on FTNO’s behalf. He said the nonprofit, with no full-time employees, was called into action shortly after it was formed to get critical aid to those in need during the Covid-19 shutdown.
He said critics could quibble with employees using their city email to craft proposals or collect donations for the nonprofit, but that was often the most efficient way to get aid to desperate people. For example, Cantrell deputy Emily Wolff used her city email in 2020 to send an FTNO invoice to United Health Care to collect a $25,000 donation. Joseph said that paid for 250,000 diapers and baby food for families in need.
“Isn’t that what the director of youth and families should be doing?” Joseph said.
Carroll, Cantrell’s campaign manager, was regularly involved in FTNO’s board meetings and financial decisions in 2020 and 2021, records show. She used an FTNO email address as recently as last month and received bank notifications for the nonprofit until Randolph had that changed in February.
Carroll said it was partly her idea in the first place to create a mayor’s fund that would help Cantrell and all future mayors of New Orleans, based on models already used in Philadelphia and New York.
She said she never had a formal role with the nonprofit after setting it up, but stepped in to help until Randolph was hired because it was “all-hands-on-deck” during the pandemic.
“I was thrilled when they hired an executive director because we knew the organization needed strong leadership and I believed the organization was in good hands,” she said. “My advice was no longer needed. I was not aware of any of the problems the organization was having with the executive director or any concerns he shared with them.”
Randolph said he started raising concerns about FTNO’s finances and operations in May, when the city’s first check for the Learn and Earn program, for $505,310.40, was mailed to the St. Charles Avenue mansion of the president of Cantrell’s inaugural fund. The city said it was a simple clerical error: The inaugural fund was also named “Forward Together New Orleans” and the city’s procurement office had sent the check to the wrong FTNO address.
After that, Randolph said he tried to “clean house” by hiring a New York attorney to help revise the bylaws and bring in new board members, but the current board dismissed his concerns.
“I felt like if I didn't speak out, then people could start pointing the finger at me and saying, ‘Oh, you're part of this as well.’ I wanted to make it abundantly clear by speaking out, I have nothing to do with this,” Randolph said.
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