Key figure in Modesto’s SCAP fiasco is manager of Merced food bank

He was Joe Gibbs to colleagues and people who followed the turmoil five years ago with the Stanislaus Community Assistance Project in Modesto, a government-funded nonprofit housing agency commonly known as SCAP.

Today, he goes by Bill Gibbs as executive director of the Merced County Food Bank.

The nonprofit food bank gave its top management job to Gibbs in February, five years after he and his wife, Denise Gibbs, dominated headlines in Modesto with their controversial management of SCAP.

A week after they were suspended by SCAP’s board, FBI agents searched their Riverbank home and SCAP’s office on Coffee Road in late 2011, seizing files and computers. The Gibbses left a trail of allegations of forgery and mismanagement of government-funded housing when they were ultimately fired in late December that year.

At least one supporter of the Merced food bank wondered if Joe, or Bill, Gibbs was a good choice to manage a nonprofit that supplies dozens of food pantries across Merced County that provide nutrition for the poor.

“I would be leery of it,” said Phyllis Legg, a former volunteer executive director of the food bank. “You have to have an honest person in that job. You need a good ethical person.”

Gibbs did not return calls for this story and said through a secretary he would not consent to an interview.

Denise Gibbs was SCAP’s executive director and Joe Gibbs was development director for an agency that housed people with AIDS, the disabled and others who met qualifications for government programs in Stanislaus County.

In May 2011, The Modesto Bee revealed an arrangement that gave Joe Gibbs a 4 percent commission on the assets and income he produced for SCAP through grant writing and other activities. That compensation for Gibbs soared to $627,000 in a single year when the agency’s income spiked in 2010.

Joe and Denise Gibbs were never charged with crimes for their SCAP activities. In 2010, Joe Gibbs was convicted of felony hit-and-run and misdemeanor vehicular manslaughter in the death of Mario Martinez, a Modesto man who died following a confrontation with Gibbs in 2008. The Gibbses later settled a lawsuit brought by Martinez’s family.

Joe Gibbs and his wife also were major players in Modesto’s neighborhood stabilization program, or NSP, and became a source of embarrassment for the city, which received $36 million in federal funds to stabilize neighborhoods rocked by home foreclosures amid the Great Recession.

Mark Seivert, chairman of the Merced County Food Bank, said he was not aware of many details of Gibbs’ history with SCAP and asked, “What is SCAP?” during an interview last week.

Seivert said the food bank’s attorney looked into Gibbs’ background before he was hired, and the chief concern was the agreement with a former employer to pay him commissions for grant writing.

“One of the former agencies he worked for had an agreement to pay a percentage and they reneged on it,” Seivert said. He added that the food bank would never agree to such an arrangement; Gibbs is paid a salary of $75,000 a year with no benefits.

“The (food bank) has brought in $600,000 since he was hired six months ago,” Seivert said. “He is doing a tremendous job for us.”

Over a seven-month period in 2011, The Bee reported that:

▪ Joe and Denise Gibbs earned more than $1.32 million over four years, including $712,000 in one year, which was almost 10 percent of SCAP’s revenue in 2009-10. After the story was published, Joe Gibbs chose to waive $436,500 in compensation in a June 3, 2011, letter emailed to The Bee, though Gibbs claimed in a lawsuit the next year that he did not recall signing the letter.

▪ The United Way cut off funding to SCAP in June 2011 after the agency failed to adequately explain Gibbs’ extraordinary compensation.

▪ SCAP spent almost $340,000 in taxpayer money to purchase and lavishly remodel a foreclosed home on Rumble Road and then placed Denise Gibbs’ parents in the home. It was one reason why Modesto stopped giving federal NSP dollars to SCAP in June 2011.

▪ SCAP, which received $8 million in NSP funds, spent far more than other developers in renovating foreclosed homes with expensive countertops, costly roofing and a designer bathtub for a home occupied by its housing director.

▪ A city review in October 2011 blasted SCAP for “egregious mismanagement” of the foreclosed properties purchased and renovated with NSP funds and for violating regulations by placing employees and relatives of employees in eight of those homes. The agency failed to verify the income of tenants, overcharged tenants and kept incomplete eligibility records. It was ordered to have an outside firm manage its properties.

▪ The FBI raid, on Dec. 7, 2011, was assisted by the Office of Inspector General for the Department of Housing and Urban Development and came a week after Denise and Joe Gibbs were suspended by SCAP’s board.

▪ After the board meeting that resulted in their suspension, someone entered SCAP’s office that night or early the next morning and took the agency’s computer server. It was not determined who took the computer equipment.

▪ SCAP’s board of directors announced Dec. 30, 2011, that Denise and Joe Gibbs had been terminated.

According to court records, one cause for firing Gibbs was his involvement in Echo Haven, a competing nonprofit that he created while working for SCAP. Echo Haven acquired seven foreclosed homes in Northern California that were donated by banks or provided at discounted prices.

Gibbs said Echo Haven made $179,000 in profit selling the houses and he earned $43,000 in salary from the nonprofit.

A former SCAP board president, Darryl Fair, insisted he did not sign a document used to create Echo Haven. “It was all fraudulent, forged and made up,” former SCAP board member Patrick Pokorny told The Bee in 2012.

Joe Gibbs has continued to seek $477,000 in unpaid bonuses from SCAP in a lawsuit filed in Stanislaus Superior Court. In 2012, SCAP changed its name to Community Impact Central Valley and moved the office downtown, part of an attempt to remake the nonprofit group and repair its image.

Hired by other nonprofits

The Gibbses mostly disappeared from the spotlight in the last four years. After he was fired by SCAP, Joe Gibbs worked for the San Joaquin AIDS Foundation in Stockton, where he helped the foundation with grant writing, Executive Director Robert Lampkins said.

Asked if the FBI probe was a concern before Gibbs was hired, Lampkins said he was not put in a position of managing funds.

The nature of the work that Gibbs performed for the AIDS Foundation was unclear. On his public page on the LinkedIn business social media site, Gibbs said he was chief operating officer, responsible for managing business operations and the budget, overseeing human resources and accounting, plus myriad other duties.

Lampkins did not respond to calls seeking clarification. Seivert said he understood Gibbs’ previous work was grant writing.

According to the LinkedIn page for Bill Gibbs, he also did grant writing and fundraising for the Farmer Veteran Coalition in Davis from March 2014 until February. His name appears as Joe Gibbs in a Davis Enterprise article on a grant awarded to the coalition.

Gibbs now manages a nonprofit that distributes food to neighborhood pantries, schools and hot meal kitchens, providing nutrition for an estimated 10 to 20 percent of Merced County’s population. A network of more than 80 organizations provides the food to people in need at churches, community centers and senior centers, the food bank says.

On its most recent statement to the Internal Revenue Service, the food bank reported it took in $5.5 million in contributions and grants in 2013.

Former Modesto Councilman Dave Lopez said he was shocked Gibbs was hired for the position, “because of all the questionable stuff that was investigated here in Stanislaus County. I am surprised they would hire someone like that to get involved with a food bank.”

In a second interview Thursday, Seivert said Gibbs was upfront about his previous issues, including the felony conviction in 2010. Seivert said he was convinced that investigations and audits had cleared Gibbs of wrongdoing in the scandal over SCAP.

Case set for hearing

According to court documents, Gibbs has said he would invoke the Fifth Amendment privilege against self-incrimination if he is deposed in his civil case seeking unpaid bonuses. A judge put a stay on the case more than two years ago because of the FBI investigation, which put records pertinent to the case in the hands of federal authorities.

On July 28, an attorney for Community Impact Central Valley will ask Judge John Freeland to lift the stay on Gibbs’ lawsuit, so the organization can leave the case behind.

Michael Farbstein, the Bay Area attorney representing CICV, said the original lawsuit included a wrongful termination complaint by Joe and Denise Gibbs but it was dropped, leaving the bonus compensation issue.

Minutes from a SCAP board meeting more than 10 years ago refer to a 4 percent bonus agreement for Gibbs, but it is hard to understand if that meant a percentage of grant income or something else, Farbstein said.

“The case has been stalled for a long time due to the FBI investigation,” Farbstein said. “We are making a motion to lift the stay. We continue to take the position that Mr. Gibbs received all the compensation that was due to him and that his lawsuit is unfounded.”

Gibbs’ current position on the case was hard to ascertain. His attorney in the civil case, Alonzo Gradford of Modesto, did not respond to calls regarding the lawsuit. Last week, The Bee received an email attributed to Gradford, which said the FBI probe was completed and no charges will be filed against Gibbs. It could not be confirmed if Gradford wrote the message sent on a Gmail account.

An hour before the email was sent, an unidentified person called a Bee reporter at home and said the FBI probe was completed. The person then hung up.

Gina Swankie, an FBI spokeswoman in Sacramento, said the agency does not generally offer updates on investigations. Farbstein said he had no information the investigation was concluded.

CICV Director Kathy Lee, who endured the crazy times at SCAP, said she and the staff have worked to clean up the problems left by the Gibbses.

The agency, providing housing for eligible tenants in more than 200 units, is involved with Stanislaus County’s Focus on Prevention Initiative, which is looking into expanding supportive housing for the homeless.

“Our units are full, with a waiting list,” Lee said. “We have been working at this quite a few years, making sure the organization is doing what it needs to be doing.”

This story was originally published July 16, 2016 at 4:40 PM with the headline "Key figure in Modesto’s SCAP fiasco is manager of Merced food bank."