Alarmed by recent media coverage about the St. Louis Development Corporation preliminarily awarding grants to North City businesses in vacant, boarded-up buildings, state Rep. Steve Butz (D–St. Louis) last week asked State Auditor Scott Fitzpatrick to give the agency a closer look.
“I said, ‘I’m sure I’m the 50th person who brought this to you,’” Butz recalls of his October 1 meeting with Fitzpatrick’s chief of staff. “He said, ‘Actually, you’re the first.’”
Get a fresh take on the day’s top news
Subscribe to the St. Louis Daily newsletter for a smart, succinct guide to local news from award-winning journalists Sarah Fenske and Ryan Krull.
One may be good enough; Fitzpatrick’s office says the office is treating Butz’s information as a whistleblower complaint and will investigate to see whether there’s enough suggestion of impropriety to launch an audit. Trevor Fox, director of communications for the Missouri State Auditor’s Office, stresses that this is still preliminary: a review to see if there should be an investigation to see if there should be an audit. But he says that review is now underway.
Interestingly, the auditor’s potential involvement recently got a whole lot simpler. Fox says the agency was able to get legislation signed into law this past July that allows it to follow up on tips like Butz’s—and commence an audit if an investigation suggests improper activity has occurred.
Says Fox, “Prior to HB 2111’s passage we would have only been able to start an audit like this with an invitation from the Board of Aldermen or by a citizen petition. With HB 2111 we can now initiate an audit on our own, but we first have to investigate and find improper government activity.” In short: They can’t audit without first investigating, but under the new law, it only takes a tip like the one from Butz to launch an investigation.
Butz, who represents a swath of deep South City, says there’s plenty to suggest that SLDC and its contractors screwed up. “There’s no shortage of legitimate small, medium, and large businesses in North St. Louis,” he says. “They could have just started with an intern using Google Earth on these addresses. They didn’t come close to passing the smell test.”
Contacted Friday, a spokesperson for the St. Louis Development Corporation said she wasn’t able to provide a statement addressing the auditor’s involvement by Monday morning. However, she did provide an older statement by the agency’s president and CEO, Neal Richardson.
“SLDC is currently conducting an internal investigation to clear up any appearances of impropriety and conflicts of interest surrounding the North St. Louis Small Business & Non-Profit Grant Program,” the statement read in part. “At this time, less than $2.5 million of the $33+ million in grants have been funded. Given the Comptroller’s challenges to the program, and to allay the public’s concerns, no additional funds will be disbursed until our investigation is complete and SLDC compliance staff concludes their verification and confirmation process to ensure all conditional awardees are eligible under program guidelines and that all applications were scored and evaluated appropriately.”
Why It Matters: The city of St. Louis was awarded $498 million in American Rescue Plan Act funds. Mayor Tishaura Jones intends to use the money to help address a backlog of issues plaguing the city—from potholes to evictions. But the $37 million earmarked to help North City has been the most personal for Jones. She’s banked her political future on being able to help the majority Black neighborhoods long subject to disinvestment by the city. News stories suggesting some of the funds were earmarked for businesses that aren’t viable or have ties to political insiders represent not just a political headache, but a threat to her legacy.
What’s Next: Just two months ago, Fitzpatrick launched an audit of the St. Louis Public Schools. Now he’ll have to decide whether he wants to take on a second sprawling government agency in St. Louis in short succession.
Editor’s note: This story was updated after publication to make more clear that the auditor is currently in the review stage, which precedes any potential investigation.
