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The fate of Citizens’ Alliance for Better Neighborhoods has been a mystery since the convictions of Vince Fumo — who co-created the nonprofit — and its former Executive Director Ruth Arnao. Weeks after the March verdict against the former state senator, Attorney General Tom Corbett filed a lawsuit against the organization once at 1137 Wharton St. to disband its board or revoke its nonprofit status.
Shortly after that, former Executive Director Christian DiCicco announced on the group’s Web site, www.citizensalliance.us, services would no longer be provided due to dwindling funds and continuous litigation.
As the new year rolls in, the 17-year-old nonprofit still has its works, such as street and sidewalk sweeping, graffiti removal, bulk trash pickup, vacant lot abatement and the like, on hold while the courts decide its fate, whether it be dissolution or reorganization, but the first step was naming an interim leader.
Dec. 2, the Attorney General agreed to drop some charges with the stipulation Center City District President/CEO Paul Levy be put in charge of advising the outcome of the nonprofit Fumo and Arnao, who are serving month No. 4 of their respective jail sentences, were found guilty of defrauding of more than $1 million.
“It’s his baby now,” Citizens’ Alliance lawyer Thomas A. “Buck” Riley Jr., of Riley Riper Hollin & Colagreco in Exton, said. “He’s the sole director. The court has appointed him the sole director.”
At the outset, the Attorney General’s mission was to preserve the charitable assets of Citizens’ Alliance and recover what had been mishandled, Mark A. Pacella, chief deputy attorney general of the Charitable Trusts and Organizations Section, said, adding they were open to suggestions from the nonprofit, such as who to appoint as the interim head.
“We did want to secure Citizens’ assets and we were able to do that in a relatively short period of time,” he said of Levy’s role. “Citizens’ assets are now secured.”
Riley joined Joe Lundy, in representing the nonprofit, setting out to accomplish three goals: Prevent its disbanding; hire someone to handle its assets; and keep those assets for the benefit of South Philadelphia, Riley said.
“It looks like this nonprofit has really done some great stuff down here in South Philly,” he said of his and Lundy’s thought process. “I think we ought to look at this on a collaborative basis and see if we can do something. It’s gone off the tracks. It’s obviously in a train wreck.”
The two brainstormed who would be suitable to put the organization back on track and approached Levy in August, the same month as Fumo’s sentencing, for the role of interim conservator, which he took on last month.
Separate from his Center City job, he will “oversee direct and implement all aspects of the organization’s day-to-day operations and affairs,” which includes leasing or selling properties, if necessary, according to the consent decree.
“There was a lot of good work that was done despite other problems,” Levy said. “The work on Passyunk Avenue has been very successful. Whether [Citizens’ Alliance} can afford to serve as large of an area remains to be seen.”
Levy, who will be compensated $225 an hour from the nonprofit’s resources, will be responsible for hiring an auditor to check the books dating from Jan. 1, 2007, to Sept. 30, ’09, in addition to assessing the remaining assets, which include real estate mostly on and around Passyunk, such as Christopher Columbus Charter School, 1242 S. 13th St., warehouses and a few properties outside the area, as well as equipment, such as street sweepers and trash trucks.
He also will recommend if it can be restructured and, if so, how. Related, necessary expenses such as attorneys’ fees, fines, settlements and consultant salaries also will be covered by the organization, according to the consent decree.
“At this point, we have the audits under way,” Levy said. “There were not audits completed after 2005 to 2006.”
Levy’s recommendations for the organization’s future are expected by May 31 and must be approved by the court before their implementation.
“We want to get it in the hands of the court as soon as we can,” Pacella said.
Once the Attorney General receives Levy’s report, it may be months before it goes to the judge for approval, but there is no timeline for a potential reorganization since it depends on the complexity of the recommendation.
“The ultimate result may be to create a new organization or sell off certain assets,” Pacella said. “It may not be all that dramatic.”
While the termination of the organization is still an option, a restructuring is more probable, Levy said.
“It is likely that it can restart up again, but probably not over such a large area,” he said.
Fumo was sentenced to 55 months for 137 counts of fraud, obstruction of justice, tax evasion and conspiracy, while Arnao is serving a year and a day for 45 counts of defrauding the nonprofit, obstruction of justice and filing a false tax return.
DiCicco, of the 1300 block of South Fifth Street; Joseph A. Russo, of the 700 block of Federal Street, a former chairman, president, secretary, treasurer and director; John J. Sfrisi, of the 2800 block of South Marvine Street, previously a secretary and director; Jeffrey R. Travelina, of the 1200 block of Shunk Street, a past treasurer and director; John P. Travelina, of the 2100 block of Sorrento Court, an ex-director; Amel M. Hammad, of the 1400 block of South 13th Street, an ex-director; Patricia A. Evers, of the 300 block of Tree Street, a past director; the Rev. Gary T. Pacitti, of the 1500 block of South 10th Street, a previous director; Todd L. and Kenneth L. Baritz, both of Center City and former directors; and Albert Mezzaroba of Quakertown, a past director, were named in the state’s civil suit, as were Fumo and Arnao.
Nov. 23, the state filed an amended complaint. The U.S. District Attorney’s Office estimated Fumo defrauded about $2 million from the Senate, and $1 million each from Citizens’ Alliance and the Independence Seaport Museum, 211 S. Columbus Blvd. However, the Attorney General estimates about $1.9 million in nonprofit funds were misused plus $1.8 million in investments lost, according to the updated court documents. Fumo already has paid $676,000 to the federal court pending the outcome of his appeal.
“We’re trying to recover as much as we can to the extent we can,” Pacella said.
Last month, all slapped with the civil suit denied the allegations, but agreed to a list of terms to settle the case “to avoid the costs and expenses of litigation in order to preserve Citizens’ Alliance’s important charitable assets and restore the public benefits,” according to the consent decree.
In addition to Levy steering the nonprofit, those who were on the board at the time — Russo, Sfrisi, John and Jeffrey Travelina, Evers and Todd and Kenneth Baritz — agreed to relinquish their positions, according to the court document.
The original complaint aimed to force the organization to account for its assets and to be liable for misused funds, as well as remove all of its officers, but with the terms set and signed by each defendant and his or her lawyer, all three of those counts were dropped. However, the charge calling for the revocation of the nonprofit status is pending per Levy’s assessment.
“I would hope that it would come back in some capacity, but I just don’t know. I don’t think it can come back in the way it was, but I don’t want to say no. Part of it was relying on grants that Fumo was able to get,” Riley said, adding 1st District Councilman Frank DiCicco, who was a co-founder of the group, also secured grants for the organization.
“It’s just necessary to focus on what’s good and to preserve what is good about the organization,” added Levy.
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