Metro-East News

August 1, 2014

Shimkus seeks investigation of federal disaster funds

Republican U.S. Rep. John Shimkus of Collinsville is seeking an investigation into millions in federal funds that Democratic Gov. Pat Quinn's administration used for an anti-violence program.

A fellow Republican, U.S. Sen. Mark Kirk, asked the U.S. Department of Housing and Urban Development last week to investigate how Hurricane Ike recovery funds were used.

Shimkus said: "I am deeply disturbed to learn that Gov. Quinn may have misused federal disaster assistance to boost Democratic voter turnout in Chicago. I join with Sen. Kirk in urging an immediate investigation and will work with the senator to arrange an Illinois delegation briefing when we return to Washington."

Shimkus said downstate communities like Harrisburg, which had a tornado, have been denied recovery funds from the Federal Emergency Management Agency.

Kirk said: "Illinois towns ravaged by natural disasters, like Washington and Harrisburg, have been denied federal funding and relief while millions in federal aid have disappeared. I expect the HUD Inspector General to learn who received the aid, were they victims of a disaster, and what was done with the money."

The money went to financial institutions to disburse loans to small businesses in struggling Chicago neighborhoods as part of the now-defunct Neighborhood Recovery Initiative.

A state audit found "pervasive" problems with the program, which Quinn started shortly before his 2010 election.

The Chicago Tribune reported Friday that $3.7 million in federal disaster funds went to three organizations through the anti-violence program. One organization previously misspent state grants. It never loaned any money, but kept $150,000.

Quinn says he addressed problems with the initiative, including abolishing the agency that ran it.

Shimkus said the group which kept the $150,000 was awarded money even though the Quinn administration was aware that the group had wasted $60,000 in state money from a previous grant.

Kirk said Hurricane Ike in 2008 caused an estimated $43 million in damages and losses in Illinois. There 41 counties were affected, and HUD allocated $193.7 million to the state for damage relief and recovery. Kirk said Quinn decided that three Chicago-area institutions (Accion Chicago, Chicago Community Ventures and the Women's Business Development Center) would get $5 million of the disaster funds for a micro-lending program within the anti-violence program.

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