Pubdate: Sat, 25 Oct 2003
Source: News & Observer (NC)
Copyright: 2003 The News and Observer Publishing Company
Contact:  http://www.news-observer.com/
Details: http://www.mapinc.org/media/304
Author: Dan Kane
Bookmark: http://www.mapinc.org/corrupt.htm (Corruption - United States)

ACCOUNTS ORDERED FROZEN

Hyman Foundation Told Not To Spend State Money In The Aftermath Of A 
Critical Audit

Attorney General Roy Cooper has ordered the John A. Hyman Memorial Youth 
Foundation to freeze its accounts as he tries to recover $239,000 in state 
money the foundation has yet to spend. Cooper's senior deputy, Grayson G. 
Kelley, warned the foundation in a letter sent late Thursday that if it 
spent any remaining money, he would take action to have a judge dissolve 
the foundation.

"No further expenditures of state appropriated funds should be made without 
the express consent of this office," Kelley wrote.

The order comes after a blistering state audit released Wednesday that 
found the foundation's chairman, U.S. Rep. Frank Ballance, a Warrenton 
Democrat, had paid his family, church, campaign staff and political 
contributors foundation money for their work with counseling and prevention 
programs for substance abuse.

State Auditor Ralph Campbell questioned about $325,000 in expenditures over 
the past three years and said the foundation was "riddled with conflicts of 
interest." He recommended that state officials collect the foundation's 
remaining assets.

The next step, according to Kelley's letter, is a financial audit to 
determine how much the foundation owes the state. In the interim, Kelley 
told the foundation to move all its money into an escrow account and 
provide him with the account information.

Ballance helped secure for the foundation more than $2.1 million in state 
money over the past decade while he was a state senator. He served as vice 
chairman of the subcommittee that oversaw justice and public safety 
spending, and advocated money for the Warrenton foundation each year.

The spending and lack of accountability by the foundation have triggered 
inquiries by the FBI and the State Bureau of Investigation. Ballance and 
the foundation have retained lawyers Joseph B. Cheshire V of Raleigh and 
James Ferguson of Charlotte.

Ballance and other Hyman Foundation officials could not be reached for 
comment Friday. On Wednesday, Ballance said no decision had been made about 
the foundation's remaining assets. It closed its doors last month after the 
state cut off money.
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MAP posted-by: Jay Bergstrom