The revenge of Randy Howard was an expensive affair.
Howard is the former executive director of the nonprofit Dismas House of ºüÀêÊÓƵ. Based in north ºüÀêÊÓƵ, the organization runs the oldest halfway house for federal prisoners in the country. It was founded in 1959 by a Catholic priest, the Rev. Charles Clark, and a Jewish attorney, Morris Shenker. For nearly all of the nonprofit’s history, it operated under an Internal Revenue Service religious exemption, meaning it didn’t have to file public 990 forms that showed most of its expenses and payments to key executives.
In a series of columns in 2019, using tax records for a related nonprofit, I exposed Dismas House for using its lucrative federal contract with the Bureau of Prisons to pay bloated salaries to its board members, mostly John Flatley and his sister, Vivienne Bess, who is married to Gary Bess, the former city and county parks director, known for his deep local political connections. The family paid itself millions of dollars over a several year period, while other prison reentry professionals in ºüÀêÊÓƵ said Dismas House was failing to properly spend the federal dollars helping the former inmates get jobs and training and housing.
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Compared to the Flatley family, Howard said he was paid a pittance.
“I need a raise,†he lamented to me at the time.
That very year, he got one, and it was massive. In 2019, according to newly released tax records, Howard was paid more than $500,000 as the nonprofit’s executive director, a figure that is more than five times higher than what other nonprofit executives in ºüÀêÊÓƵ performing similar duties were making. The disclosure comes in the first IRS form 990 Dismas has ever filed, for the tax year 2019. It became necessary for the organization to file such a form after the Archdiocese of ºüÀêÊÓƵ pulled its umbrella religious exemption from Dismas in July 2019 after my reporting of the nonprofit’s massive payments to the family members who had taken over the board.
The ongoing tale of Dismas House exposes a troubling lack of oversight by the Bureau of Prisons, which earlier this year pulled the $43 million contract from Dismas and awarded it to another nascent nonprofit run by a disbarred attorney named Tom Utterback. After my reporting of Utterback’s past conviction for embezzling drug money, and his failure to execute the contract, the Bureau of Prisons temporarily transferred the contract back to Dismas. The Bureau of Prisons has said it intends to put the contract out for bid again.
In the meantime, Dismas has begun filing the tax records that show how much its former board members profited from their so-called public service. The large payment to Howard isn’t the only eye-opener from 2019.
Flatley was paid $154,000 in salary as a “retired board member†and another $545,000 in “other allowances.†His sister, Bess, was paid $386,592 in salary, also as a retired board member. Flatley’s wife, Pamela, was paid $210,000 in salary as a consultant. The board also transferred more than $2 million to another nonprofit it runs, called Forward Assist Inc. The Flatleys have used money transferred from Dismas to Forward Assist to make real estate investments.
According to Tara Barrett, a spokeswoman for the new board of Dismas House, the payments were all made by the former board of the organization, as “negotiated compensation agreements.â€
“John Flatley, Pamela his wife and their children are no longer involved with Dismas House. Vivienne Bess, Gary Bess and their children are no longer involved with Dismas House,†Barrett says.
But the reporting of the payments, she says, will continue in the 2020 tax filings, and likely 2021 as well, as that’s when Howard’s run as executive director ended. Barrett declined to say how much those payments will be. The new Dismas CEO, Kevin Walk, declined requests for an interview.
I asked Barrett whether the new board had any opinions on the extravagant payments using federal dollars made to the family members who used to run the organization.
“We won’t comment on the practices or decisions that were made by past leadership or Board of Directors,†she said. “Most of your original questions refer to activities and individuals of the prior administration and who are no longer connected to Dismas House of ºüÀêÊÓƵ.â€
That’s mostly true, except for, perhaps, the most important position of all, the president of the board. Currently, that’s Ron Howard, who has been involved in Dismas House for years, according to Missouri Secretary of State records. That includes in 2019, when the board agreed to give Howard’s brother, Randy, $500,000 or more in parting gifts.
Meet the new boss, same as the old boss. The Bureau of Prisons might want to keep any eye out for those 2020 tax filings. The accounting of the Flatley family retirement plan, funded by federal taxpayers, is not yet complete.
Editor’s note: Morris Shenker’s surname was misspelled in an earlier online version of this column.