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Soon after Jack A. Brown III quit his job at a private prison company, his former employer accused him of fraud. A few years later, after Mr. Brown started a nonprofit to run halfway houses, a federal audit found that it had failed to deliver key services. The New York State comptroller concluded in another review that Mr. Brown had shown “a disturbing pattern of ethical violations.”
None of that history seemed to bother officials in New York City.
Since 2017, as homelessness has risen to record levels, the city has awarded more than $352 million to a nonprofit run by Mr. Brown to operate shelters. The money is meant to help homeless people regain their footing in life, but it has benefited Mr. Brown, too.
The nonprofit has channeled contracts worth at least $32 million into for-profit companies tied to Mr. Brown, allowing him to earn more than $1 million a year, The New York Times found. Millions more have gone to real estate companies in which he has an ownership interest. He has also hired his family members and given employees perks such as gym memberships and cars.
When Mayor Bill de Blasio came into office, he criticized a small group of landlords for charging the city exorbitant rates to house people in squalid rooms while doing little to curb homelessness. In 2017, the mayor pledged to open dozens of new shelters that would be managed by nonprofit groups. Their mission, he said, would be altruistic rather than driven by financial gain.
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