Audit report: Former Wilmington council president violated ethics rules

A nonprofit group run by former Wilmington City Council President Theo Gregory received a $40,000 grant money from the city immediately after he left office, according to a state audit, violating ethics rules.

While still in office, Gregory earmarked money from a discretionary fund for the nonprofit. That’s one finding Delaware Auditor Tom Wagner noted in a report after investigating the city council’s discretionary fund spending.

“City monies that were appropriated initially by him and signed off by the person that took his position went to him, so, in essence, you’re appropriating money that goes to yourself,” Wagner said. “You don’t have to have a law degree to realize that that’s filled with conflicts of interests.”

Gregory is a lawyer and longtime member of the Delaware Bar.

The $40,000 grant was approved for the Police Athletic League of Wilmington in early 2017. The money was subsequently disbursed to Student Disabilities Advocate, a group founded by Gregory to support parents and students who have special needs or are homeless.

The audit was requested by current City Council President Hanifa Shabazz after Wilmington News Journal reports pointed to a conflict of interest in the way the funds were approved for Gregory’s nonprofit. Those newspaper reported Gregory used the discretionary fund to send $600,000 over four years to another nonprofit he founded, Education Voices, Inc.

“Obviously the appearance of that is very troubling,” said Wagner, whose report recommends a further review of spending going back to 2014.

Shabazz said she was “unaware of any conflict of interest” when reviewing the grant request from the Police Athletic League.

“In evaluating the application, we were focused on the merits of the program,” Shabazz said. “I was not aware to the extent of [Gregory’s involvement] at the time of approving this grant … I did not have that information at the time I went through the grant process.”

The audit report faulted Shabazz for not making any inquiries to avoid a conflict of interest.

Wagner said it “very difficult to reach a conclusion” in whether Shabazz was actually aware that the money was going to Gregory’s group.

Shabazz said city council has implemented measures to increase transparency and ensure grant proposals get more scrutiny.

“This incident and audit revealed the a need for greater scrutiny in our former policy,” Shabazz said. “We take the integrity of these grant requests very seriously, and I’d rather end the grant program altogether than cast any doubt in the minds of the people of Wilmington that we’re doing anything other than what we should be.”

Shabazz has also ordered the city’s auditor to review grants of $5,000 or more from 2014.

The audit report was forwarded to the Delaware attorney general’s office, the standard procedure.

Gregory did not return phone calls for comment.