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City official: Mayor Lenny Curry’s office pressured him to steer grant money to 'preferred' groups

Kids Hope Alliance CEO Joe Peppers said Mayor Lenny Curry’s two highest-ranking officials told him to give certain grant applicants “preferential treatment."

In the waning hours of a Saturday night last September, the CEO of the Jacksonville Kids Hope Alliance typed on his smartphone a memo leveling an explosive allegation: Mayor Lenny Curry’s office was exerting “undue influence” on him to give preferential treatment to a hand-picked group of organizations that would soon seek grant money from the city agency.

In the memo, Joe Peppers described a tense meeting with Brian Hughes, Curry’s political operative turned chief of staff, and Sam Mousa, then the city’s top administrator, that happened the previous week to discuss the city’s Stop the Violence initiative, a bundle of small grants Curry and the City Council funded in response to a deadly shooting at a Raines High School football game, a tragic low point to an already violent summer.

The $10,000 “micro” grants were to be awarded to dozens of nonprofits and faith-based organizations, which would have free reign to spend the cash on whatever programs they believed would steer kids away from violent crime.

Peppers planned to hire a contract manager to oversee the $364,000 program. Hughes and Mousa didn’t like that idea, according to the Sept. 8 memo, which the Florida Times-Union obtained a copy of this week.

Hughes asked another KHA employee attending the meeting, Damien Cook, to step out of the room, according to the memo. He then told Peppers he “didn’t understand” why he was trying to hire a contract manager.

Mousa spoke next, explaining to Peppers there wouldn’t be any need to do that, according to the memo. Instead, Mousa said he wanted Peppers “personally involved” in scoring the grant applications.

″This is family talking; this is political!” Mousa said, according to the memo. “To reiterate, both Brian and Sam stated that there would be designated applicants that would get preferential treatment during the application process.”

Peppers didn’t mention any specific organizations in his memo. The Times-Union has requested an interview with Mousa, Hughes and Curry. Mousa, who is now retired, hasn’t responded. City spokeswoman Nikki Kimbleton hasn’t said whether Hughes and Curry would be available for comment, and she said she hasn’t seen a copy of Peppers’ memo.

“Regardless, I can assure you the Mayor’s office follows all ordinance and law related to procurement. Any implication or inference of “undue influence” or “preferential treatment” in the procurement process is not factual,” she said in an email.

Peppers wrote that he never agreed with or challenged Hughes and Mousa during the meeting, but the conversation left him feeling “very uncomfortable.” His discomfort grew when he later heard rumors that a group of local pastors were conspiring to blackmail him over a purported picture of him attending a rally for President Donald Trump.

Peppers shared some of his concerns with Lawsikia Hodges, an attorney with the city’s office of general counsel, after his meeting with Mousa and Hughes. She instructed him to “not make a big deal” about it, according to the memo.

“She stated that the $350k was insignificant compared to the $32 mm we received and that I shouldn’t ‘openly question the mayor.’ That I shouldn’t ‘bite the hand that feeds me,‘” he wrote, referencing the total amount of the grant program and the $32 million KHA received from the city that year. “I didn’t tell her about my conversation with Brian and Sam, but I did ask what I should do if I felt like I was under undue influence. She said ‘we will cross that bridge if we get to it.’”

Those interactions left Peppers so unsettled that he emailed the memo to two members of his executive team, Mary Tobin and Jennifer Blalock and instantly transformed his detailed recollection of the meetings into a public record.

“I am stating for public record that I do not agree with the approach dictated to me by the mayors (sic) office,” he wrote. “Two of the mayor’s direct reports have intimated to me that they expect me to pass certain applicants based on their discretion regardless of how they score on the (request for proposals.)”

A year after putting those troubling accusations into writing, Peppers remains at the helm of the agency, which oversees city-funded children’s services and is controlled by a board of directors appointed by the mayor.

Peppers didn’t return a message seeking comment, and a KHA spokesman didn’t respond to a request to interview him. It’s unclear how the organizations that received the city funding were selected. The Times-Union has requested a copy of the scoring results and a list of groups that received the grants.

Curry was gearing up for his reelection campaign at the time of the Raines shooting, although a challenger had not stepped forward yet.

Still, Curry was elected in 2015 on a campaign promise to lower violent crime, and violent crime numbers were moving in the wrong direction. The number of murders in the previous two years — 106 and 112, respectively — were the highest recorded since 2008, and the number of rapes during the same years hadn’t been higher since 2000.

The 19-year-old killed during the Aug. 24 shooting at the Raines football stadium pushed the 2018 homicide rate to 82. Two other teens were injured during the shooting.

According to Peppers’ memo, Hughes and Mousa expressed a keen interest in the micro-grant program during their meeting. It’s unclear when the meeting occurred: In one part of the memo, Peppers said it occurred the week before he wrote it on Sept. 8. In another part, he says the meeting occurred on Thursday, Aug. 6. (Aug. 6 fell on a Tuesday, although Sept. 6 fell on Thursday.) The Times-Union has requested calendars for that time.

Hughes told Peppers that he’d normally expect him to measure the outcomes of any programs the agency funded — a talking point Curry often mentioned when discussing children’s services — but this case was different.

″‘We want this to be something that happens fast,’” Hughes said, according to the memo.

Mousa then asked Peppers why he met with Councilman Danny Becton and planned another meeting with Councilwoman Anna Brosche, according to the memo. Mousa erupted after Peppers asked whether he should cancel the meetings.

“He said no and got very angry with me,” according to the memo.

Marlene Russell, another Curry aide, also attended the meeting but said “very little,” according to the memo. The Times-Union requested an interview with Russell on Wednesday morning. Kimbleton hasn’t said whether she would be available for comment.

Peppers wrote that he shared his concerns with other people, including KHA board members Kevin Gay and Barbara Darby, and told parts of the story to then-Councilman Matt Schellenberg, who he wrote encouraged him to “do the right thing.”

“I have a meeting Monday morning with Brian where I will let him know that I do not plan on supporting preferential treatment of applicants,” Peppers wrote at the end of the memo.

A month after Peppers’ purported meeting with Mousa and Hughes, 100 local organizations applied for the micro-grants. KHA later awarded a total of $364,000 to 37 groups.

Peppers has led the agency since April 2018, and the board’s decision to hire him was a controversial one.

Curry appointed Peppers to the agency’s board in November 2017. A few months later, Peppers applied for the CEO position while he was still a board member. He resigned before receiving the job after the move was criticized as a potential conflict-of-interest.

The board later chose Peppers to lead the agency in a split vote and gave him a salary that was $30,000 higher than the executive director of the agency that the KHA replaced when it was formed in 2017.

Earlier this year, Peppers took a leave of absence due to “long-standing health issues,” according to an Action News Jax report. Peppers has returned to work, although Tobin and Blalock both resigned this summer. Peppers hired Tobin, a long-time friend, and Blalock, who also applied for the CEO position, to help him oversee the agency.

Peppers is the latest person to accuse Hughes of using his position to pressure or intimidate them while conducting city business. In early 2018, an aide to City Councilwoman Anna Lopez Brosche filed a complaint against Hughes, claiming she felt unsafe after he angrily confronted her on the fourth floor of City Hall. An internal review by the general counsel’s office cleared Hughes of breaking any laws or city policy.

In April, Schellenberg said Hughes threatened retaliation after he publicly criticized an incentives-rich deal to redevelop downtown’s vacant Berkman II property that soured after the Mississippi-based developers walked away.

Hughes sent Schellenberg a screenshot of a comment he made in the Times-Union expressing disappointment that the city’s Downtown Investment Authority didn’t discover more than $11 million in financial judgments filed against companies tied to the developers before asking the council to approve the deal.

Hughes followed up with a cryptic statement: “I hope Matt gets everything he needs prior to June 30.”

June 30 was Schellenberg’s final day in office.

Click here to read the full story from our partners at the Florida Times-Union.