Charlotte council member faces conflict-of-interest questions over COVID-19 relief money

When the federal government sent millions of dollars to Charlotte to give relief to businesses and workers devastated by the economic shutdown caused by the coronavirus, City Council member Tariq Bokhari agreed to help city administrators decide how the money should be used.

Bokhari said Charlotte City Manager Marcus Jones asked him to take part because of his experience with workforce development and connections with businesses. Bokhari is executive director of the Carolina Fintech Hub, a nonprofit designed to turn the region into a hub for financial technology.

But some City Council members and others say they were alarmed that administrators proposed $1.5 million go to support participants in the nonprofit’s advanced technology jobs program. The proposal would have allowed Bokhari’s organization to potentially benefit from taxpayer money he is responsible for helping oversee, City Council members warned.

In a committee meeting Tuesday, council members will seek new community partners and reevaluate criteria for the program, which now disqualifies Bokhari and Carolina Fintech Hub from participating.

“It’s not saying he’s guilty of anything unethical,” said City Council member James Mitchell, who introduced the shakeup during Monday’s meeting after hours of contentious debate. “It’s about protecting this Council when there’s a real conflict of interest.”

Nonprofit executive directors typically play a major role in fundraising for their causes. The Carolina Fintech Hub paid Bokhari $200,000 in salary and had roughly $813,000 in net assets or fund balances at the end of 2018, the latest year figures are available from the Internal Revenue Service.

Bokhari declined the Observer’s request for an interview ahead of Monday’s meeting, but answers written questions.

In written responses, Bokhari said he has done nothing wrong, and that he did not attempt to exert undue influence over city staff.

“No, I did not lobby or try to influence city administrators in any way,” Bokhari told The Observer.

Monday night, he spoke to his council colleagues.

“It was just the right thing to step up and try to help the needs of our workforce,” Bokhari said at Monday’s meeting. “The stipends the city would be providing these participants is of critical importance.”

Charlotte City Attorney Patrick Baker told city leaders that it is legal under state law for the city to give financial support to Carolina Fintech Hub’s job program, according to an email obtained by the Observer.

Bokhari would not get any income or commission directly from the agreement, Baker wrote.

To help avoid conflicts of interest, Charlotte City Council members sign a “statement of economic interests” that requires they declare if they, their spouse or an immediate family member works for a nonprofit seeking to do business of any kind with the city. It also asks if the nonprofit’s finances could be impacted by the council member’s public duties.

“I am executive director of the Carolina Fintech Hub, but it does not meet any of the criteria in this section,” Bokhari, a Republican, wrote on the statement dated Jan. 6, 2020. “Listing it anyway for complete transparency.”

City Council on Monday charged a committee with reviewing its ethics policies, particularly how elected officials are notified of possible conflicts of interest.

‘This is about transparency’

In a July 20 email to City Council members, Bokhari said Jones came to him in March and asked him to design a program meant to aid struggling businesses and workers. The email came in response to questions raised by some City Council members about proposed city funding for Carolina Fintech Hub’s job training participants.

Jones told City Council members Monday that he didn’t think the arrangement was unethical. Still, he acknowledged city officials had to move quickly to distribute federal COVID-19 relief funds.

Mitchell, a Democrat, said it’s disturbing that city staff recently recommended that the City Council give $1.5 million to support a jobs training program run by Carolina Fintech Hub without seeking bids from other groups that offer employment services.

Mitchell said he also heard concerns in April when city staff considered giving $500,000 to a program overseen by a Colorado-based business accelerator operator. It would provide access to mentors, investors and other resources to boost new technology businesses in Charlotte. City administrators did not initially seek a request for proposals from different organizations, he said.

“It doesn’t look good,” Mitchell said. “I’m frustrated with city staff. I’m mad with (Carolina Fintech) for not taking the high road.”

City Council member Dimple Ajmera criticized Bokhari and city staff, saying they failed to fully disclose a potential conflict of interest.

“This is about transparency, accountability, the public trust and good stewardship of our public dollars,” Ajmera said.

Baker told City Council members Monday night that multiple citizens have raised ethics concerns.

“I think you should assume there will be an investigation of the subject matter coming forward,” Baker said. “I believe that very soon a valid complaint will be in front of my desk.”

Corine Mack, president of the Charlotte chapter of the NAACP, sent city officials an email last week demanding an investigation.

Mack said NAACP leaders are upset city staff recommended granting public money without giving Black-run organizations a chance to bid for the project.

“It is disgusting to me,” Mack said. “This is so blatant. Every action you’re taking tells me you don’t care about us.”

City Council member Ed Driggs said Monday he was disappointed the perceived conflict wasn’t discussed sooner.

“This whole thing needs more work,” Driggs said. “I think this work needs to be conducted under a bright light in public.”

Two people who research North Carolina government ethics said they did not have enough information to say whether giving public money to the jobs training program overseen by Carolina Fintech Hub would violate the state’s conflict-of-interest law, which forbids elected officials and public employees from taking actions that would directly benefit themselves.

But they said city administrators and Bokhari have a responsibility to avoid the appearance of impropriety.

“This does not pass the smell test,” said Jane Pinsky, director of the Coalition for Lobbying and Government Reform. “It doesn’t do anything to make people have more confidence in local government.”

Charity or conflict?

Private companies have agreed to hire up to 90 people who complete the five-month training through Carolina Fintech Hub. Money from the city would go to pay participants a salary during the training, roughly $2,900 a month, Bokhari said.

City money would go directly to trainees and not the Carolina Fintech Hub, he said.

“I was asked by the City Manager to provide my input and expertise as the City was designing a small business and workforce recovery program because of my experience,” he told The Observer in written answers. “The City took that input, incorporated what elements they felt had value, and maintained the ability to perform further diligence and decide the level of their participation.”

In a written statement, he said a “colleague” is attempting to use the issue to retaliate against him for his vocal support for police, but did not identify the person by name.

“It’s tragic they would be willing to sacrifice those in need of recovery help by attacking an innovative public/private partnership that doesn’t have a single taxpayer penny going anywhere other than in the pockets of individuals in need,” Bokhari said. “I guess it’s just another sign of the times we are in.”

Charlotte officials did not make Jones, the city manager, available for a requested interview with the Observer.

In written responses to questions submitted by the Observer, they said Jones did ask Bokhari to assist staff.

Who can give advice on money?

Charlotte received more than $154 million from the federal government earlier this year under the CARES Act, a rescue and relief package approved by Congress in response to the coronavirus. City leaders set aside $50 million for small business recovery and workforce development plans.

At a Small Business Recovery Task Force meeting this month, Emily Cantrell, assistant director of talent development for the city of Charlotte, said officials planned to direct $1.5 million to the advanced technology jobs program overseen by Carolina Fintech Hub.

City Council member Julie Eiselt and Ajmera, who attended the meeting virtually, raised questions about whether it is appropriate for the city to grant money to the effort.

Ajmera asked how leadership of the program was being compensated for their work on the initiative. “That question doesn’t even compute or make sense to me,” Bokhari responded.

Under North Carolina law, elected officials and public employees are prohibited from taking action that would directly increase their salary, give them a bonus or a commission, said Norma Houston, a professor at the UNC Chapel Hill School of Government.

“You have to start parsing and splitting hairs to determine whether someone’s income is impacted,” Houston said. “It raises questions, especially for an executive director. That can be difficult to parse out.”

Bokhari has emphasized there is no conflict of interest.

“City Staff and the Manager relayed that they liked the program,” Bokhari wrote in the July 20 email to council members. “..... They were clear that this approach was pending further diligence and design that needed to occur.

“... I was, and still am, in complete support of any other program designs that could deliver the end outcome of changing lives – there just haven’t been this unique combination of job commitments, overhead investments and salary ‘learning stipends’ that could all come together on such a condensed timeline. “

This story was originally published July 27, 2020 at 3:59 PM.