A Kansas City nonprofit with the mission of promoting economic development in the city’s urban core is now under federal investigation, reports KSHB Channel 41. A 41 Action News Investigation reveals federal officials are looking at how the Black Economic Union of Greater Kansas City spent tax dollars.
At the center of the investigation is the historic Lincoln Building, one of the crown jewels of the city’s 18th and Vine District, and specifically how BEU spent – or did not spend – money on the building prior to selling it to attorney Henry Service in 2017.
“I can confirm the Office of Inspector General (of the U.S. Department of Housing and Urban Development’s Office of Inspector General) did sit down and talk to me and I can confirm that I’ve got information that the FBI is looking into that organization,” Service said in an interview.
The BEU is one of dozens of non-governmental agencies that receive funding through the city. In BEU’s case, the city money in question comes from the federal community black grant program. The program gives money to cities with relatively few strings attached to help improve communities. Oversight of the funding is done through a combination of local and federal officials.
Investigators obtained a series of emails between Special Agent Joseph Lorek from HUD and Stuart Bullington, the now former assistant director of Kansas City’s Neighborhoods and Housing Services Department. In an August 2018 email, Lorek asks Bullington for an accounting of all federal money given to BEU. Bullington responds by sending a 2014 contract between BEU and the city to improve the Lincoln Building. The original contract included $100,000 of federal money, with $75,000 of those funds budgeted to upgrade the elevator. According to Service and former BEU Board Chairman William Harris, no elevator work was ever done.
