SCAP suspends 3 top managers over Modesto housing controversy

local@modbee.comDecember 1, 2011 

The husband-and-wife team that has led the embattled Stanislaus Community Assistance Project has been suspended, the Modesto nonprofit announced Thursday.

Executive Director Denise Gibbs and her husband, Joe Gibbs, the development director, were placed on immediate suspension. Also suspended was housing director Caryl Prunty, according to a statement released by the SCAP board.

The three were put on one month's paid leave, a spokesman said.

SCAP's board of directors took the action at its meeting Wednesday night, when it also accepted the resignation of board chairman Jonathan D'Attilio.

Denise and Joe Gibbs did not respond to requests for comment Thursday; Prunty could not be reached.

In another twist, SCAP officials confirmed that a computer server at the agency's Coffee Road office was taken during a break-in late Wednesday or early Thursday.

Leo Briones, a Los Angeles-based consultant who has returned as SCAP's spokesman, said employees arrived Thursday morning to find the front door held open with a rock. The server was the only thing missing from the office, he said.

"It's been reported to Modesto police," Briones said. "The server has a lot of information that SCAP needs to function with and needs to get it back."

Modesto police received a report about 9 a.m Thursday that electronic equipment was taken in the burglary. The timing of the incident should be of interest to detectives, Sgt. Steve Hinkley said.

"Since they were suspended, the detectives will have to look at anybody who was working in the business and had a reason to go in and take it," he said.

SCAP's new board chairman, Patrick Pokorny, and another board member worked Thursday with remaining staff to run the agency.

The three suspended managers have been at the heart of the controversy swirling for months around the agency, which received more than $8 million in federal money to rehabilitate and rent foreclosed homes and apartments in Modesto.

Since late May, The Bee has reported that SCAP awarded Joe Gibbs $627,331 in compensation last year, that Denise Gibbs' parents moved into a remodeled home SCAP paid for with tax dollars, that Prunty and members of her family lived in other SCAP homes, and that the agency used taxpayer money to lavishly remodel properties.

The city of Modesto, which oversaw the distribution of federal Neighborhood Stabilization Program money to SCAP and other developers, also has been critical of the nonprofit. City Manager Greg Nyhoff sent the SCAP board a letter in late October faulting the agency for "egregious management and performance deficiencies" in managing NSP housing.

The city also froze all NSP funding for SCAP and other recipients over the summer, pending an investigation by the federal Housing and Urban Development's Office of the Inspector General. Those results are expected within the month.

Nyhoff said Thursday that any management changes at SCAP "are their decisions."

He added: "We are going to look at their performance under HUD and program requirements. Those are the issues of utmost importance to us."

Modesto Councilman Dave Lopez said he hopes SCAP's board action is a start to making significant reforms at the nonprofit.

SCAP's statement said, "There are remaining managerial and structural issues that must first be addressed before reinstatement (of the managers) will be considered. In that spirit, the SCAP board is strongly committed to establishing procedures to ensure a culture of transparency, best practices and ethical guidelines for our agency."

As recently as two weeks ago, D'Attilio said the agency would wait until it had "all the information" before making personnel changes.

Ethics consultants hired by SCAP over the summer also recommended personnel changes at the agency, which provides housing to AIDS and HIV patients and people with other disabilities or special needs.

Briones said there was a lack of coordination of reform efforts, which led to the board's decisions Wednesday.

"The board finally said, 'Decisions are being made that we are not privy to and it's not going to be tolerated any more,' " he said. "The board wants to make sure there is constant communication between parties to get to the bottom of all issues."

Briones said agency officials will search out the facts in the next several weeks before making decisions about SCAP's future management. He expected that ethics consultants Jude Barry and Tom Shanks will be involved with the process, after not being involved in recent weeks.

Thursday's statement thanked D'Attilio, who lives near Roseville, for his service, but stressed that clear and open communication within the agency was essential to establishing reforms. Board members apparently were confused about the role of a Bay Area-based housing expert who was hired to respond to the city's monitoring.

D'Attilio said he resigned because "it became apparent to me there is just too much to try to fix. … It became obvious I was fighting an internal battle. Things are so broken down there, I am not sure what it will take to right the ship."

Former councilman and mayoral candidate Garrad Marsh said he wasn't sure what to make of the action to suspend the managers.

"I would need to see something more definite than just suspensions to be comfortable with this," he said. "I've felt it was too great of a conflict of interest, with the Gibbses both working together. That is beyond what's normal for a nonprofit."

Even if new managers are brought in, Marsh said, SCAP needs to do more to verify it's properly managing NSP housing. SCAP used the federal money to buy and renovate foreclosed properties, which were converted to 61 units of rental housing.

"Unfortunately, the system we set up initially was one of trust," said Marsh. "We need to be much clearer in guaranteeing everything is done properly."

Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or (209) 578-2321.

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