Modesto nonprofit fires executive director, husband

jnsbranti@modbee.comDecember 31, 2011 

— The Stanislaus Community Assistance Project has fired its Executive Director Denise Gibbs and her husband Joe Gibbs, SCAP's director of business and development.

The Modesto charity's board of directors announced Friday afternoon that it unanimously voted to terminate the Gibbses "for cause" effective immediately but board didn't reveal the exact reason for its action.

The Gibbses had been on paid administrative leave since Dec. 1, but that is over. A SCAP spokesman said neither Gibbs would be paid any severance.

The termination vote was made during a closed-door board meeting Wednesday, but the agency "needed to serve the Gibbses notice before it could release a statement," spokesman Leo Briones said Friday.

The Gibbses did not respond to The Bee's e-mail request for comment Friday.

The employment fate of SCAP's housing director, Caryl Prunty, has yet to be decided. She also has been on paid administrative leave since Dec. 1. The board announced Friday that it will consider her employment status next month.

Prunty and the Gibbses have been at the center of inquiries about how the city of Modesto spent millions in federal stimulus funds. After months of investigating, city officials Oct. 28 sent SCAP a scathing letter outlining "egregious deficiencies" in how it had been managing 46 rental units purchased with taxpayer funds.

On Dec. 7, FBI agents executed search warrants at the Gibbses' home in Riverbank and the SCAP offices in Modesto. They seized computer files related to government grant funding. The FBI, however, has not revealed exactly what it is investigating.

Some questions may be answered next week when the U.S. Department of Housing and Urban Development's Office of the Inspector General releases its audit of Modesto's Neighborhood Stabilization Program. SCAP spent more than $8 million of that taxpayer money, including lavish expenditures on homes that Denise Gibbs' parents and assorted Prunty family members ended up living in.

Joe Gibbs also came under fire after a Modesto Bee story last May revealed SCAP in 2010 had agreed to pay him more than $627,000 in compensation. Gibbs, who was convicted of vehicular manslaughter and hit-and-run in 2010, reportedly earned that much in commissions for having garnered so many government grants for SCAP.

After his earnings became public, Joe Gibbs agreed to forego more than $400,000 of what he claimed SCAP owed him.

Former SCAP board member Ken Hanigan said he is glad the Gibbses were ousted. Hanigan joined the charity's board last February, and he was outraged when he discovered how much Joe Gibbs was earning. When he questioned Gibbs' compensation package and other SCAP spending, the other directors voted him off the board. SCAP then hired an attorney to write Hanigan a letter warning him not to reveal anything he had learned while on the board.

Because so much of what SCAP was spending had come from the city of Modesto's Neighborhood Stabilization Program, Hanigan took his concerns to Modesto City Councilman Dave Lopez.

Lopez shared that information about SCAP's questionable spending with the city's administrative staff. But after several weeks passed without administrators taking action, Lopez asked The Bee to investigate SCAP.

Following The Bee's stories about Joe Gibbs' salary and SCAP spending, all but one of the SCAP board members – Patrick Pokorny – resigned.

"I knew in my heart, (the Gibbses) were abusing the system," Hanigan said Friday. "I do not wish anyone ill will, but I knew they were taking advantage, and it needed to end. … It is nice to know justice is served."

Lopez also said he is pleased SCAP has terminated the Gibbses.

"To have any hope of restoring the public's trust in SCAP, Joe and Denise Gibbs had to go away," Lopez said. "This is the beginning of the healing process."

The current SCAP board members are Roger Sterlin, Dan Malakaukaus, Tom Drury, Carlos Villapudua and Pokorny.

In its written statement Friday, the SCAP board said it is "both optimistic and enthused about the implementation of organizational reforms now taking place."

The board said SCAP "serves Stanislaus County's special needs community, and we take that responsibility and commitment seriously. In as much, we believe it is our moral and ethical duty to provide those services in a manner that represent the highest level of procedural competence and ethical behavior."

Bee staff writer J.N. Sbranti can be reached at jnsbranti@modbee.com or 578-2196.

Video I from FBI raid


Video II from FBI raid

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