The Philadelphia School District is investigating why it gave tens of thousands of dollars to a company run by a man who served nearly two years in jail for fleecing the federal government.
The Nu-Juice Foundation received about $150,000 from the district and $720,000 from the state between 2007 and February for, among other things, mentoring services and after-school programs. It has received more than $1 million from public and private entities in that time, according to a review of public documents by the Daily News.
The nonprofit's president is Eric Ward, who pleaded guilty in August 1990 to embezzling $184,000 from a methadone clinic he ran in Parkside, retaliating against a witness and filing a false tax return.
Civic leaders, teachers and students have praised Nu-Juice and Ward, but the district's chief watchdog says Ward's record with public money should have barred him from district contracts and questions have been raised about the usefulness of Nu-Juice's programs.
"Stealing tax dollars is stealing tax dollars, no matter when you commit the crime," said Inspector General John Downs, who launched an investigation into why the district gave Nu-Juice contracts after questions from the Daily News. "The school district is supposed to do due diligence. It's a system failure."
Ward, 58, paid his debt to society by serving time in jail, accounted for his crimes "and successfully reentered the larger community as a productive citizen all while giving back," Nu-Juice spokesman Joel Avery said in an email to the Daily News.
"Why should the organization be punished and denied grants because of something its president was convicted of doing so long ago, which was completely unrelated to Nu Juice, education, students or academia?"
The Nu-Juice Foundation has received at least $1.1 million from public and private entities since 2006, according to a review of public records by the Daily News, but the agencies that have given them out have sometimes been left with questions about how some of the money was spent.
Ward was paid $67,000 to serve as Nu-Juice's president in 2008, according to the nonprofit's only 990 tax form filed with the state. Federal law requires nonprofits to file a 990 every year and make them available to the public. Avery said that Nu-Juice has prepared forms for 2009, but not filed them yet, and forms for 2010 and 2011 are being prepared now. He said that Nu-Juice wasn't "interested" in releasing any of the forms to the Daily News.
The $70,000 contract for youth mentoring services at West Philadelphia High School, which began July 1, 2011, was nixed by Chief Recovery Officer Thomas Knudsen in March 2012. West's new principal, Mary Dean, wasn't impressed by Nu-Juice's plans, said schools spokesman Fernando Gallard.
"They couldn't demonstrate through hard data that the work was having an impact on students," he said.
Gallard said Dean told Nu-Juice she didn't want their services in July 2011 before Nu-Juice began work, and informed the district officials that oversaw the contract.
"She made it clear that their services were no longer needed, but they continued to call and ask for meetings," Gallard said. "In her opinion they were unable or unwilling to accept her decision to not continue with their services."
The district didn't put the termination in writing until February when Knudsen sent a letter officially ending the contract in March. Nu-Juice, nonetheless, received $33,016 from the district. Gallard said the district will probe why the district still paid the nonprofit.
Avery said in an email that Nu-Juice was paid for "its work confirming prominent and influential professional men and women in the private and public sectors to participate as mentors in the program." Avery, though, wouldn't name a single person that Nu-Juice had confirmed as mentors.
Nu-Juice received an additional $80,000 from the district since 2007 to work with students and parents teaching business and entrepreneurship and hip-hop dance instruction, along with increasing parental involvement at South Philadelphia High School.
Nu-Juice received 10 grants totaling $720,000 from the state Department of Community and Economic Development between 2006 and 2009, said spokeswoman Theresa Elliot. She said that $54,000 of that money "was not spent within the line-item expenditures that [Nu-Juice] provided in the application."
DCED notified Nu-Juice officials that they would need to return that money, but Nu-Juice hasn't complied with an agreed to payment plan "and the matter has been turned over to our legal department for collections," Elliot said.
Nu-Juice blamed the problem on the lack of "a financial expert," Avery said. It has since hired Alan Brown, former city deputy commerce director to manage its finances. "Nu Juice apologizes for the mistake and deeply regrets it," Avery said.
The Nu-Juice Foundation said it used the DCED grants to pay for its Keepin' It Real Tour program, which combines entertainment and inspirational discussion to youth.
The show was performed 38 times in the 2008-2009 school year, according to Nu-Juice. The show includes motivational guest speakers from different professions who discuss their careers and musical performers.
The tour sometimes had "Dress for Success Days," in which adult mentors discuss how to dress in the business world. Boys at the events received free neckties from the Eric Shareef Tie Collection, which was founded by Ward's son Shareef. Eric Ward himself invested $10,000 into the business, Avery said.
Avery said Nu-Juice paid Shareef Ward less than $5,000 "to develop and implant the 'Dress For Success' program," which included the donation of ties. He said Nu-Juice is unsure which funds paid for the program, but that it could have been paid for with state grant money.
Many civic leaders have supported Nu-Juice, giving it accolades for the Youth Law Enforcement program and also for a job training session for adults paid for by the Philadelphia Workforce Development Corporation. Nu-Juice got a $131,966 grant from the PWDC, while the law enforcement program was paid for with a $42,000 grant from the nonprofit Philadelphia Foundation.
Chad Dion Lassiter, president of the Black Men at Penn School of Social Work, said he met Ward when they both served on the board of the Leadership Learners Partner Charter School.
"I've seen organizations with funding from [former U.S. Sen. Arlen] Specter, [U.S. Rep.] Chaka Fattah, whomever and I have not seen them produce the outcomes comparable to what I've seen Nu-Juice do with limited resources," Lassiter said. "Eric Ward would still do Nu-Juice if he wasn't receiving any funding because that's how committed he is. He's committed to young people."
In May 2007, City Council honored Nu-Juice, citing Eric and Shareef Ward "for its dedicated service and commitment to the people of Philadelphia as exemplified through the Keepin It Real Tour." In November 2009, Nu-Juice was named recipient of the FBI Director's Community Leadership Award. The agency cited the youth law enforcement program that helped "bridge the gap between urban youth and the law enforcement community."
Ward began his rise to prominence as a volunteer for the late state Rep. Hardy Williams' 1971 mayoral campaign and later became a community organizer for the Philadelphia Psychiatric Clinic, which ran the methadone clinic in Parkside. When the clinic's chief announced he was retiring, Ward established a nonprofit, invited powerful politicians like Williams and former U.S. Rep. William H. Gray III onto the board, and won a $454,000 contract from the city to take over.
A Daily News investigation in 1990 found that Ward used clinic money to lease a Cadillac, Porsche and Mercedes and charged $5,200 worth of personal meals and trips to the clinic's American Express card. Ward also had a financial interest in the testing lab used by the clinic and sold office supplies at inflated prices to Parkside through two businesses he then owned.
The school district is looking into how someone with such a checkered past managed to land contracts and also get into schools to work with students.
Gallard said there's no record of a background check of Ward, even though his name figures prominently in the bid submitted to the district, obtained through a Right to Know request. The district conducted clearances on other top Nu-Juice associates, clearing them to work inside schools.
Avery said that Ward and the others who participated in the Keepin' It Real Tour weren't subject to background checks because the tour participants themselves aren't considered vendors.
"Eric Ward has informed me that he, personally, never directly engaged in any consistent or regular interaction with students as a part of any scope of services the Nu-Juice Foundation was contracted by the school district to perform as a vendor," Avery wrote in an email. "Nu-Juice believes this clearly explains why Mr. Ward was never required or asked by anyone within the school district at any time to submit to a background check."
Avery said Ward "would have been happy to" submit to a background check if he was asked to.
Gallard said clearances aren't needed for one-time visits — say by a sports celebrity — but when an adult is entering schools consistently they are subject to a check.
Downs said he'll also investigate why Ward and others who visited schools for the Keepin' It Real Tour weren't subject to a background check.
"If he's going to continue to come in and out of schools, he needs one," Downs said. "In my opinion, he should have a criminal history background check and that would bar him from getting a contract because of his conviction for stealing tax dollars."