Mount Vernon Mayor Ernie Davis: 'I didn't take any money'

Mount Vernon Mayor Ernie Davis speaks during a Mount Vernon Mayor Ernie Davis speaks during a news conference. (Dec. 31, 2012) Photo Credit: Faye Murman

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Mount Vernon Mayor Ernie Davis is denying any wrongdoing amid a federal probe of a disaster relief fund he created in the wake of Hurricane Katrina that has seen at least two city employees subpoenaed to testify before a grand jury.

Davis said Wednesday that two of his former administrative assistants -- Ruby Lohse, who works in the city's Human Resources Department, and Dulce Lima, who works for the Fire Department -- were subpoenaed. They were expected to testify before a grand jury in White Plains on Wednesday, but the proceedings were abruptly canceled. Federal law enforcement officials declined to comment.

Davis criticized the investigation as politically motivated and said he expects to be exonerated.

"There's nothing to investigate because I didn't take any money from the fund and there was no mismanagement," the mayor told Newsday. "I don't know what they think they'll find, but we didn't do anything wrong."

Initially, sources had suggested that several high-ranking officials also had received subpoenas, but Davis and several city officials said they weren't aware of others being asked to testify. The mayor said he has not been asked to appear.

Lohse couldn't be reached for comment Wednesday, and Lima referred a reporter to her boss, Fire Commissioner James Gleason, who confirmed that she had been subpoenaed but declined to elaborate.

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"It's a bunch of malarkey," Gleason told Newsday. "This has nothing to do with me or the Fire Department."

Davis, 74, started the fund in February 2006, nearly six months after Hurricane Katrina charged ashore along the Gulf Coast as a Category 3 storm, killing more than 1,800 people and devastating the region. He said the only person who received money from the fund was Silvina Montana, who had relocated to Mount Vernon from New Orleans with her daughter. She got $1,500 in July 2012.

"She fell behind on bills and we decided to help her," Davis said. "That's what this fund was intended for."

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Montana, who lives in the Levister Towers apartment complex near downtown Mount Vernon, couldn't immediately be reached for comment.

Davis said only $12,000 was raised from donations, from a few fundraising events he hosted, and he produced bank account records showing the fund had $11,167.74 as of Dec. 31, 2012, and a photo copy of the cashed $1,500 check to Montana.

He said only two people were authorized to issue checks from the fund: Nichelle Johnson, the city's corporation counsel, and Thomas Terry, the commissioner of the city's Department of Management Services. Neither was available for comment Wednesday.

"I can't write a check out of that fund because that would be a conflict of interest," Davis said.

The account is labeled "Mount Vernon Disaster Relief Fund" in care of Mayor Ernest Davis, with Mount Vernon City Hall listed as the address. The account was co-signed by Helen M. Blackwood, former corporation counsel for the city who later became a city judge. She also is the daughter of former Mayor Ronald Blackwood. She couldn't be reached for comment.

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The fund was stripped of its tax-exempt status three years after it was created because Davis hadn't filed required financial reports with details of revenue and expenditures, along with other information.

IRS officials declined to comment on the status of the relief fund or the possibility of wrongdoing or a criminal investigation.

The allegations first surfaced in 2011, when city Comptroller -- and then-mayoral candidate -- Maureen Walker and her opponent, Davis, swapped allegations of mismanaging the relief money. Davis maintained that Walker was the custodian of the fund after he was voted out of office in November 2007, a charge that she denies.

"To my knowledge, that money was never used," Walker said Wednesday, reiterating her previous allegations against the mayor but denying that she had access to the fund. "It's not a city account, so I wouldn't have had access to it."

Davis, one of Mount Vernon's longest serving mayors, has had brushes with the feds before. In 2009, he was voted out amid a flurry of federal investigations of City Hall prompted by a scathing 2006 audit of the Mount Vernon's affordable housing program.

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In one case, his former planning commissioner, Constance "Gerrie" Post and Wayne Charles, a Mount Vernon entrepreneur, were accused of overbilling the federal government by $1.7 million in Section 8 subsidies between 2003 and 2004. Both were convicted of fraud and the state took over the city's Section 8 program.

Another case involved trash haulers overbilling the city by $1.25 million. James Castaldo, a public works supervisor, was sentenced to five years in federal prison in 2008 after admitting that he took $50,000 in bribes from waste collectors.

He never was formally accused of wrongdoing, but the allegations cost him his re-election bid. Davis says he was scapegoated and alleges that race was a factor.

"I'm a high-profile black mayor," he said. "That's why they're trying to take me down."

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