Within the accepted canon of the Christian New Testament Gospels, the Book of Luke contains a passage describing the death of Jesus Christ, wherein Jesus is crucified alongside two thieves, both unnamed.
According to Luke 29: 39-43:
Now one of the criminals hanging there reviled Jesus, saying, “Are you not the Messiah? Save yourself and us.” The other, however, rebuking him, said in reply, “Have you no fear of God, for you are subject to the same condemnation? And indeed, we have been condemned justly, for the sentence we received corresponds to our crimes, but this man has done nothing criminal.” Then he said, “Jesus, remember me when you come into your kingdom.” He replied to him, “Amen, I say to you, today you will be with me in Paradise.”
The “other” criminal who defended Jesus, who was ultimately given the name “Dismas” by the non-canonical fourth-century Gospel of Nicodemus, has become known throughout the Christian world as “The Good Thief” because of his repentance alongside the dying Christ, and has since been recognized as an uncanonized saint by the Roman Catholic Church, which celebrates his feast day on March 25.
Two-thousand years later, Catholic priest and Kentucky State Reformatory Chaplain William Diersen founded a charity in St. Dismas’ name — Dismas Charities Inc. — to provide offenders in the penal system with job-training services to prepare them for life beyond prison.
“(Diersen) understood — like few others at the time — that without the necessary survival skills and support structure, individuals tend to return to a life of crime, more victimization would occur and the cycle of returning to prison would begin again,” reads the charity’s website. “Father Diersen also knew that to effect change would be no easy feat. The criminal justice system itself was rife with abuse and offenders were feared and stigmatized by the public. But Father Diersen’s character, focus and unbending will persisted.”
Thus, in 1964, Dismas opened its first 15-bed halfway house in Louisville, and in the ensuing decades, the 501(c)(3) nonprofit has expanded its scope of operations to provide “alcohol and drug treatment, job training, domestic violence intervention, mentoring to at-risk adolescents, juvenile delinquency, and a vast array of other programs and services” in 29 facilities across 12 states, according to its website.
But that expansion — and the millions in state and federal dollars that now comprise more than 95 percent of the charity’s operating budget — has come at a cost to Dismas’ founding mission. A recent state audit reveals the organization once founded to help society’s lowest has been hijacked by its executive board members, who are among the highest-compensated nonprofit board members in the state and who have seemingly exploited its vast reserve of indentured inmates and public monies as a means of personal financial gain.
It all began with the Yum! Center.
Specifically, the news that Dismas executives had purchased a $92,000 lease to a 20-seat suite in the $238 million basketball arena.
Suddenly placed on the defensive, Dismas President and CEO Ray Weis told The Courier-Journal in an Aug. 21, 2010, story that the board “made a decision to … partner with the university and use (the suite) to promote our organization here in the community.
“We haven’t done anything like this before,” Weis said.
However, the statement was less than truthful. A week later, the C-J reported that Dismas had not only leased a $45,000 suite at Papa John’s Cardinal Stadium, but for the past 12 years has rented out a converted caboose housed at the stadium for partying purposes.
According to state Auditor Crit Luallen, she received a phone call from Weis shortly after the expenditures became public.
“I believe he called me because he saw my quote in the paper,” Luallen tells LEO Weekly. “He said he wanted an opportunity to explain the situation to me, and he also — in that conversation — invited us to come in and look at his books. So then when we met (with Dismas executives) here in our offices shortly after that, we began to explain to them how we would have to design the perimeters of a review that would be comprehensive. I believe their initial call to me was to only look at this particular transaction for the (box money), and I think once they realized that for us to get involved and put our name on a review it would have to look at all of their policies that govern this type of expenditure, I think that is when they began to throw up concerns about how much of their information was proprietary in nature and so forth.”
Last month, Luallen’s office released a 60-page audit outlining the various weaknesses in oversight and fiscal transparency with Dismas’ $7 million annual contract with the state Department of Corrections. The auditor-in-chief admits that review is incomplete due to stonewalling tactics employed by the nonprofit’s executive board, which included prohibiting any contact between Dismas staff and Luallen’s team. All inquires were instead deferred to Dismas’ outside legal counsel.
“We believed that there was a lack of cooperation in providing adequate information, adequate access to staff and adequate documentation,” Luallen says. “Now having said that, in their response they did this in the interest of efficiency. The end result, however, as you can see in the audit, is that we were not able to access the information we needed to give a full and complete picture.”
Indeed, the documents requested by Luallen’s office but not provided by Dismas include lists and records of expenditures made by its corporate headquarters; lists of gift and entertainment expenses; budgets approved by the board for 2008, 2009 and 2010; information regarding gala expenses, including the company’s Christmas party; documentation of reimbursements for corporate office employees — virtually any and all information needed to discern how money is being spent.
Yet despite the audit’s shortcomings, its findings are multifold:
In addition to the Yum! Center and Cardinal Stadium luxury purchases, the charity spent funds in support of Bellarmine University’s men’s basketball program for its 2010 season as well as “hosting various social events including an annual Derby Gala, an annual Holiday Open House, and golf outings,” all with taxpayer money.
Dismas’ executive compensation relative to other transition care nonprofits ranks it in the 90th percentile, and in the 85th percentile when compared to all nonprofits nationwide. According to its 990 tax form from 2009, Weis received $602,648 in reportable compensation despite working an average of five hours per week. Its vice president, Jan Kempf, received the second-highest compensation, to the tune of $469,955. These amounts dwarf the salaries of other nonprofit executives; for example, Seven Counties Services’ Howard Bracco earned $192,610 in 2008 compared to Weis’ $600,546 for the same year.
Minutes from a 2008 board meeting reveal the “extreme” importance of corporate sponsorships to Dismas’ vendor selection. In March 2008, Dismas’ annual Derby Gala raked in more than $80,000, and after expenditures for the party were reported, the charity netted $33,000 in profits. Further, despite reporting a decrease in the gala’s sponsorships for 2009, the audit found that “Signature Sponsorships” on behalf of the law firm Stites & Harbison and software provider KiZAN technologies rewarded them with payments of $247,413 and $400,931, respectively.
“Without a solicitation policy to address the solicitation of vendors,” the audit reads, “there is an increased risk that the selection of vendors may be made on the size of a vendor’s donation to the organization, rather than on sound procurement policies, which may create a conflict of interest.”
The audit also listed numerous policy concerns ranging from a lack of sufficient whistleblower statutes and nonexistent fiduciary oversight training of executive staff to insufficient ethical standards and language in Dismas’ contract with the state Department of Corrections prohibiting Luallen’s office from probing Dismas’ books in any real depth.
“It’s my sense that a culture has developed around that sense that they are not subject to public scrutiny, and that they are very protective of any of the details of how they operate,” Luallen says.
“They took the position that once the state dollars move into their organization and become part of their corporate accounts, where money is mingled from other federal grants and contracts they have, that we no longer had the ability to have a right to those records. There was no language in the state contract that would allow us that access. I think that even if that language had been in the contract then perhaps they would have taken the position that not everything we wanted to see was pertinent to the contract. But I’m just speculating. I can’t put words in their mouth.”
Luallen compared Dismas’ executive culture to that of the Kentucky Retirement Systems, which manages the state’s pension system, insofar that the executive board utilized public monies for financial gain.
Dismas declined to comment for this story and ignored repeated requests for financial information.
However, Melinda King, chairwoman of the Dismas Charities Board of Directors, offered a two-page written response in which she emphasized the charity’s commitment to its original mission (“to end the cycle of (inmate) victimization”) and offered a mea culpa of sorts with regards to its executive compensation rates.
“As a nonprofit, our executives cannot be paid with the most highly valued compensation element in private industry: ownership in the company,” King writes. “For-profit companies simply can provide compensation packages that we cannot. Accordingly, we must rely on an attractive salary structure to hire and keep the skilled employees needed to manage a national, complex organization that employs more than 600 individuals and serves 5,600 residents a year across the country.”
King also states that the board “disagreed on certain requests for documents because we believed they were outside the scope of the review,” a point Luallen disagrees with.
As a result of the audit, the Department of Corrections has indicated it will renew its contract with Dismas to include greater fiscal disclosure requirements and oversight controls, but Luallen says she has yet to hear anything definite.
Dismas Charities’ halfway houses and drug treatment facilities, while representing the vast majority of their operations, only comprise part of their unique presence in Metro Louisville.
For years, Dismas has contracted with the city to provide workers to various Metro agencies via a “work-release” program, which affords inmates a daily allowance (63 cents) and commutation of their sentence. The program is only available to nonviolent, non-sex offenders, and their presence impacts virtually every wing of city government. Workers are culled from the charity’s five local halfway houses.
In essence, Dismas workers form a kind of backbone of indentured servitude upon which a great many city departments depend for cheap manual labor, supplementing their budgets as the city has faced perpetual multi-million dollar shortfalls.
Dismas’ workers can be found landscaping and picking up trash on behalf of Metro Parks, helping run the vehicle impoundment lot for Public Works, working the “road crew” for Metro Corrections, performing maintenance at the Louisville Zoo as well as Louisville Metro Animal Services, in addition to performing janitorial work for the Louisville Metro Police Department.
In 2008 alone, Dismas reported a combined 672,220 “man days” of rehabilitation.
Although the state audit reported the quality of its contract with the Department of Corrections wasn’t impeded by appearances of executive impropriety, the use of Dismas workers at LMAS sparked controversy last year after LEO reported that the characteristically lax oversight within the city’s animal control agency led to multiple instances of inmates engaging in drug abuse, sexual intercourse and misappropriation of city property while working at the shelter.
In an interview for a July 2010 cover story, former LMAS-interim Director Wayne Zelinsky admitted that such activity had taken place, and that Dismas had been notified.
“They know it happened, and they want to make sure that we do everything we can to make sure it doesn’t happen again,” Zelinsky said.
The admission proved contradictory to the claims of Dismas spokesman Bob Yates, who in a June 23, 2010, LEO story denied any knowledge of the illegal transgressions despite his organization receiving an email from Zelinsky written on June 3, 2009, that detailed inappropriate contact between inmates and government employees.
The about-face from Dismas echoes Luallen’s call for greater transparency.
“Auditors can’t audit to people’s assurances,” she says. “We have to audit an actual paper trail and written policies and documented procedures and expenditure records and board meeting minutes that clearly lay out the details of how these decisions are made. These are the critical pieces of performing a full and complete audit. Without those, we can only speculate.”
It calls to mind another passage from the Christian bible, also from the Book of Luke: “Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much.”