Was WyCo’s Hollywood Casino Grant Fund defrauded?

More casinos, more money. More money, more problems.

It took less than a year for Wyandotte County’s Hollywood Casino Grant Fund to devolve into dispute.

The grant program started as a fairly straightforward method to disburse a sliver of Hollywood Casino’s revenues toward local nonprofits, under the broad mandate of improving community health. In 2013 and 2014, the call for potential grant recipients drew, respectively, $1.6 million and $1.9 million worth of applications. Those were stacked up against $500,000 in available funds each year. A six-member committee, appointed by a rotating set of Unified Government of Wyandotte County/Kansas City, Kansas, commissioners, reviewed those applications and determined which entities would receive proceeds, and how much. By the usual standards of UG politics, the process seemed serene.

The peace didn’t last.

Earlier this year, after a group of UG commissioners criticized the program — saying it wasn’t transparent enough and that certain commission districts weren’t getting their shares — the UG Board of Commissioners decided to do away with the review committee. Over protests from UG Mayor Mark Holland, 8th District Commissioner Jane Winkler Philbrook and several nonprofit groups, the UG Commission elected to handle the casino grants itself.

Now the UG Commission is trying to unwind a mysterious grant, earmarked for an obscure foundation whose leadership says it didn’t ask for the money.

The Pitch has learned that the Wyandotte County district attorney is investigating what appears to be some sort of nonprofit identity theft. Who’s responsible? That depends on whom you ask.

“This is the sort of thing I was concerned about,” Holland tells The Pitch. “And we will have to see how this plays out.”

John “Tiny” McTaggart called an emergency meeting of the Wyandotte County Parks Foundation June 2.

The Wyandotte County Parks Foundation is a small 501(c)(3) organization that raises money privately to provide extra support to the county’s parks program. McTaggart, also the longtime mayor of Edwardsville, runs it. “We are all about building accessible playgrounds for disabled and handicapped children,” he tells The Pitch. Board meetings for this foundation aren’t all that common, occurring quarterly. Emergency meetings are rarer still.

McTaggart had summoned the rest of the board to ask if anyone knew why the foundation’s name and tax identification number were on a $27,000 grant from the Hollywood Casino Grant Fund. That figure amounted to far more than a blip; the foundation ended 2013 with just $121,376 in the bank.

None of his fellow board members had an answer for him — and the board had not yet seen the application for the grant that would have sent money to the Spring Valley Neighborhood Association, a small neighborhood group near the Rosedale and Hanover Heights neighborhoods in southeast Wyandotte County. The application asked for $20,000 to repair sidewalks and gutters along Eaton between 43rd and 45th streets — where there are no parks in sight.

The Spring Valley Neighborhood Association’s president is James Milligan, an architect. Milligan’s ties to the UG Commission seem to be limited to his working for Populous, the firm that 7th District Commissioner Jim Walters founded.

Milligan tells The Pitch that he applied for the grant because because he was told to do so by 3rd District Commissioner Ann Murguia. “For the casino grant, Ann approached me and said, ‘Here’s an opportunity to continue improving the sidewalks and curbs and aprons at the end of your driveway,'” he says.

So Milligan applied online, through the Greater Kansas City Community Foundation, the conduit for accepting casino-grant applications. Casino grants have to go directly to 501(c)(3) organizations, however, and the SVNA isn’t that type of nonprofit.

E-mails obtained by The Pitch show that UG employees urged Milligan to use the UG’s federal tax identification number, rather than the SVNA’s, to apply for the grant. He tried that. The GKCCF’s website rejected the application.

“Deep sigh … this really is not that hard,” reads a March 16 e-mail from Murguia to UG employees. “Both these groups simply want to use the UG as their fiscal agent since they are the primary partner in the grant applications. We need a 501c3 number from the UG that the GKCCF computer application system will accept.”

The following day, UG Public Works director Mike Tobin responded to Murguia’s e-mail: “We sent the information for the Park Foundation 501c3 to James Milligan yesterday, copied you on the email, but have not received a response back from him. I am assuming the # worked for him.”

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That assumption was correct. The application went through, and the SVNA ended up with more money than had been requested on the paperwork. Murguia awarded the neighborhood association $22,000, and At-Large Commissioner Hal Walker chipped in another $5,000.

Murguia says it was Tobin who was put in charge of finding a tax number that would work. “Mike Tobin was charged with the task of finding a UG 501c3 number so the money could stay with them and do the work this summer or fall,” she tells The Pitch.

Tobin did not respond to several phone calls seeking comment.

Meanwhile, nobody told the Parks Foundation that its tax information had been used to grease the SVNA grant application. (Milligan’s application itself was full of errors. For example, it listed David Hurrelbrink as the president of the Parks Foundation, though he hasn’t served in that capacity for at least three years.)

By the time the Parks Foundation board found out about the zombie grant, so had the Wyandotte County District Attorney’s office. Ed Brancart, chief deputy under WyCo District Attorney Jerome Gorman, attended McTaggart’s emergency meeting — during which the foundation voted to reject the grant.

“The casino grant was applied for fraudulently without the consent of the Foundation to improve sidewalks in neighborhoods,” reads McTaggart’s letter to UG Assistant County Administrator Joe Connor. “Although a good cause, improving sidewalks does not fit into the mission of the Wyandotte County Parks Foundation.”

Murguia says she’s “stunned” that the Parks Foundation sent the money back.

“Since this incident, I’ve taken a look at the Wyandotte County Parks Foundation website, and their mission includes partnering with community organizations,” she tells The Pitch. “I think this was a great opportunity to partner with a grassroots community-based organization and I think they missed that opportunity.”

So why use the tax ID of a different grassroots community-based organization to do it?

“I really don’t know who made a mistake,” Murguia says. “Or if a mistake was even made.”

In fact, Murguia says the Parks Foundation should have taken the money, no matter who asked for it. She blames politics for the foundation’s refusal to accept the grant.

Mark Mohler, once a political ally of Murguia’s who has since become an adversary, is a member of the foundation’s board. He campaigned for Murguia in Rosedale when she first ran for office, in 2007, but the two have since fallen out. “I think there are more than one person on the Parks Foundation that does not like the new system,” Murguia says. “But I do think in particular, Mark Mohler, who is on the Wyandotte County Parks Foundation board and also president of Rosedale Development Association, is upset that RDA did not receive more funds and as a result has been part of creating these problems.”

Mohler says that’s hooey.

“What I’m concerned about is not whether one process is better than another,” he says. “I’m concerned about any process by which someone was able to apply for a grant using the foundation’s name without first getting permission.”

Murguia, who supported the idea of commissioners having a closer role in doling out casino grants, counters that there’s nothing wrong with the new process. “I don’t think the new system has caused this political problem,” she says. “I think people that don’t like the new system have made this a political problem.”

McTaggart says this episode is a black eye for the casino grant fund. “It’s one of the dangers of this kind of a process, that projects get approved that ordinarily wouldn’t have,” he tells The Pitch. “If it had been in the old process, they would have nipped this in the bud.”

Milligan, who seems like a man who wanted a few bucks for his neighborhood, instead got a visit last week from a district attorney. Milligan was at work at the time but later met with Gorman and another prosecutor for about an hour in downtown KCK.

“Especially with somebody like me, the president of Spring Valley Neighborhood, it’s all volunteer,” Milligan says. “This is the first time I’ve ever done it. It’s a negative in my box for something like this in the future, which is unfortunate…. I thought I was doing a good thing.”

What, if anything, the DA plans to do next is unknown. Gorman didn’t respond to a call seeking comment. For now, that $27,000 sits unused.