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Tuesday, September 17, 2019

Former East St. Louis township officials diverted nearly $1M in youth program funds

Their View

By Vincent Caruso, Illinois Policy Institute | Apr 3, 2018

A summer jobs program for disadvantaged East St. Louis Township youths was fleeced by two township officials to cover township bills and illegal credit card payments.

Former township supervisor Oliver Hamilton and his sister June Hamilton Dean, a former township financial consultant, diverted nearly $1 million in funds intended for the program. At least $200,000 came in the form of fraudulent loans, according to a Belleville News-Democrat investigation.

Records examined by the Belleville News-Democrat show that between 2013-2014, the Illinois Department of Natural Resources, or IDNR, awarded East St. Louis Township $634,800 in grants for a youth employment program. However, the investigation discovered that only around $232,600 found its way to the program. Although these funds were intended for the program, most were transferred to the township’s general operating fund and used to pay for township expenses such as payroll and employer taxes, the investigation found.

A 2016 Belleville News-Democrat investigation found that Hamilton had spent more than $230,000 over a four-year period using a township American Express card. The investigation revealed that Hamilton had spent township dollars on “questionable purchases” such as trips to Las Vegas, supplies for his business, gasoline, car washes, and donations to friends.

Hamilton is currently serving a five-year prison sentence for wire fraud. Hamilton Dean was charged with felony bank fraud in October 2017. Both were among seven Metro East public officials arrested in December 2016 on corruption charges.

Weeks before receiving the first state grant payment, Hamilton and Hamilton Dean took out a $200,000 loan from First Illinois Bank in 2013, fabricating the township board’s authorization. Using the loan, the former officials created the Township Summer Youth Employment Fund, over which the two had exclusive access, according to the Belleville News-Democrat’s investigation. In 2014, an additional $100,000 was transferred to the account from a township certificate of deposit without the township’s knowledge.

According to the township, board officials were unaware of the account for the full duration of the two-year program, during which funds were routinely funneled from the account to the township’s general fund, often to cover illegal credit card purchases.

Ultimately, Hamilton and Hamilton Dean gained access to nearly $1 million, according to the Belleville News-Democrat.

Transferring money from the Township Summer Youth Employment Fund account into the township’s fund was often as simple as making a single phone call to First Illinois Bank, according to the Belleville News-Democrat.

The Illinois Youth Recreation Corps, or IYRC, was established in 2012 with the aim of supporting summer jobs for underprivileged Illinois youths. Overseen by the IDNR, the program offered seasonal jobs with a focus on conservation and recreation.

But for program participants in East St. Louis Township, a number of the jobs assigned under the purview of the IYRC were instead performed either in the township office or for a private company owned by Hamilton. Despite a contractual provision barring township officials from personally benefitting from the program, 31 youths were assigned work at Hamilton Construction and Hamilton Learning Center, owned by Hamilton and Hamilton Dean, respectively.

The program also barred administrators from financially benefiting from the IYRC program. But Hamilton Dean received two personal checks throughout the course of the two-year program. She received a $2,500 check from the 2013 grant as a “grant writer” in 2013, and a check for more than $6,900 from the township general fund with “youth grant 2014” written in the memo line in 2014, according to the Belleville News-Democrat.

The state and the township agreed to a monthly installment plan to repay unused funds in March 2015, after the state discontinued the program. The township has repaid a portion of the IDNR grants, as well as Hamilton and Hamilton Dean’s initial $200,000 loan, according to the Belleville News-Democrat. However, the township, and therefore East St. Louis Township taxpayers, still owe the state roughly $120,000.

More than 40 percent of the township’s residents live below the poverty line, according to the Belleville News-Democrat. That two public officials plundered funds devoted to youth job preparation from a community that could especially use it only heightens the scandal.

The St. Clair County State’s Attorney is currently pursuing a criminal investigation against the township’s mismanagement of the IYRC program. The attorney’s findings will have to wait, but transparency and accountability in local government ought to be delivered with urgency.

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