Article appeared July 23, 2006 on page 1A

A Google search on the city's newly appointed planning director led me to an article on the now-defunct non-profit he ran for 20 years. After several phone calls, I discovered that the company was under federal investigation.

BINGHAMTON -- The federal government began an investigation in November into a now-defunct non-profit formerly headed by Jim Dessauer, the city's recently appointed planning director. The investigation has prompted some concerns on Binghamton City Council.

"I don't know where he (Mayor Matthew T. Ryan) finds these people from," John Cordisco, D-9th District, said.

Ryan, who appointed Dessauer July 13, said Saturday he had looked into the matter and found that "Jim (Dessauer) didn't do anything that he wasn't authorized to do by higher-ups."

"I'm confident that Jim (Dessauer) did everything he was supposed to do and was upfront with everybody and gained approval for what he did," Ryan said.

Officials from the Office of the Inspector General at the Corporation for National and Community Service on Thursday declined comment on specifics of the case.

Eastside Neighbors in Partnership, a Syracuse-based economic development organization, collapsed in 2005 amid financial stress and allegations that the company, under Dessauer's leadership, misappropriated funds from a $472,000 federal grant. Ryan appointed Dessauer to serve as the city's director of Planning, Housing and Community Development, a job that carries a starting salary of $52,544.

The inspector general's investigation stems from the $472,000 federal grant given to ENIP in 2003 to run a community organization program with 36 AmeriCorps VISTA volunteers. Several of the volunteers working for ENIP complained that they were not receiving payment, said Dan Gage, a spokesman for U.S. Rep. James T. Walsh, R-N.Y., prompting some to speculate that the money for the volunteer program was going to pay other expenses.

Dessauer said no action had been taken on the investigation. "I've heard nothing from them (the inspector general's office) for a very long time," Dessauer said.

After complaints from VISTA volunteers, Gage said, Walsh's office began another investigation into ENIP's past expenditures. The investigation found no wrongdoing, Gage said.

Dessauer started the organization from his living room nearly 20 years ago and saw its expansion into a multi-million dollar organization. Funding cuts, he said, near the end of the organization's life made its operation impossible.

"The fiscal difficulties of the City of Syracuse trickled down to us," Dessauer said Friday. "We ended up over a period of four years losing in the range of $500,000 and no housing organization can sustain that kind of cut. We certainly couldn't."

ENIP had financial problems almost from its inception, said Vito Sciscioli, a member of the Syracuse Home Headquarters Board of Directors and the Syracuse think tank 20/20. Dessauer, though well-intentioned, had concentrated his efforts on ENIP's community organization arm at the expense of its financial viability, Sciscioli said.

"We were trying to work with people and assist them and recognize the difficulties people have in paying rent at the same time we were trying to run a business," Dessauer said. "We learned that we needed to run the business part of things as a business."

That lesson, Dessauer said, prompted the organization to reorganize, boosting its occupancy from 60 to 90 percent.

ENIP held deeds on about 50 rental units on 25 properties throughout the east side of Syracuse, an economically strapped mix of residential and commercial properties. The organization maintained about $2.8 million worth of property, according to a 2003 tax exemption filing, the last year information was available.

Binghamton City Council member Chris Papastrat, R-5th District, was on the east side of Syracuse, he said Friday. The section of the city, Papastrat said, remained in disrepair.

"The neighborhood didn't look any different than the neighborhoods they're trying to revitalize here," Papastrat said. "Why would we take a failed plan in Syracuse and try to implement it here?"

ENIP would rent the properties to low-income tenants -- a business model, Sciscioli said, that conflicted with Dessauer's community organization aspirations. A weak housing market and tenants who did not pay rent threatened ENIP's finances.

"A soft heart will get you into a lot trouble in that business," said Sciscioli, noting that Dessauer would not evict tenants who were delinquent in their rent payments. "At the end of the day, when revenues don't meet expenses, you go broke whether or not you're a non-profit."

ENIP's dual role as a community advocacy group and a housing provider made for a "difficult combination," said Syracuse Home Headquarters Executive Director Kerry Quaglia. Home Headquarters took control of 13 of the properties managed by ENIP, which were financed through the Syracuse Cooperative Federal Credit Union. Since taking over the properties in late 2005, Quaglia said, Home Headquarters has been able to secure purchase contracts on eight of the properties.

"In order to maintain solvency," Quaglia said, "you have to be a tough landlord."

While questioning Dessauer's ability to manage properties, Quaglia praised Dessauer on his skills as a community organizer.

"I believe Jim (Dessauer) does some things extremely well," Quaglia said. "He's a great organizer, and an exceptional grant writer, and he's great at finding creative solutions."

Ryan on Saturday echoed Quaglia's sentiment. "He (Dessauer) had tremendous success bringing organizations together," Ryan said.