Former East St. Louis Township Supervisor Oliver Hamilton secretly transferred more than $300,000 from a state-funded youth summer jobs program to the township's general fund to help pay for illegal credit card purchases, and assigned some of the youths in the program to work for his private construction company.
A two-month investigation by the Belleville News-Democrat discovered how lax oversight by the Illinois Department of Natural Resources and the township board allowed Hamilton and his sister, June Hamilton Dean, a former township financial consultant, to gain control of nearly $1 million in unauthorized loans and state grant money.
State Sen. Bill Haine, D-Alton, co-sponsored the bill that created the Illinois Youth Recreation Corps summer jobs program. The statute provided $7 million in grants to municipalities throughout Illinois in 2013 and 2014.
“These programs were designed to be run by faithful public servants and that just didn’t happen with Hamilton and his cronies,” Haine said. “They just pillage. These programs are not there just to fund someone’s lifestyle.”
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Hamilton was convicted in 2016 after a BND investigation revealed he made more than $230,000 in purchases on a township American Express credit card, including tens of thousands in personal purchases for gasoline, trips, food, gifts for political allies and materials and equipment for his business, Hamilton Construction Co.
Last October, after the BND reported on the existence of a secret bank loan that Hamilton and his sister took out, Hamilton Dean was charged with felony bank fraud. A criminal complaint stated she falsely told a First Illinois Bank official that she and her brother had received permission in July 2013 from the township board to borrow $200,000 to jump start the state-funded summer youth employment program. Board members later said they knew nothing about the loan.
Hamilton Dean, who pleaded not guilty to the state charges, has refused to comment. She lost her seat as an East St. Louis City Councilwoman, but voters on Tuesday elected her as a Democratic precinct committeewoman.
Oliver Hamilton is serving five years in prison; he could not be reached for comment.
Bank documents showed that Hamilton and Hamilton Dean were the only ones who had access to an account created in 2013 with the $200,000 bank loan, called the Township Summer Youth Employment Fund. A year later, Hamilton transferred an additional $100,000 into the jobs fund account from a township certificate of deposit without the board’s knowledge. He used some of that money to cover credit card costs that ran as high as $22,955 a month, according to township and bank records.
The youth jobs program was limited to teens 14-18 years old who were paid $9 an hour. The jobs were supposed to involve "conservation and recreation," but many of the youths were assigned to work in the township office or at Hamilton's Construction.
Many of the participants were related to politically connected people. The youth jobs program employed Hamilton Dean’s two daughters and her son-in-law. All were over 18 and were paid $12 an hour as supervisors. Township consultant George Laktzian’s granddaughter was employed in the program as a youth worker.
The township's handling of the summer youth jobs program is the subject of a criminal investigation by the office of St. Clair County State’s Attorney Brendan Kelly.
“I cannot comment on a pending investigation,” Kelly said.
The Department of Natural Resources also declined to comment.
“At this time, as this is still an ongoing investigation, we cannot comment on this,” IDNR spokesman Ed Cross said in response to written questions. “Please feel free to reach out again at the conclusion of the investigation.”
Money just by picking up the phone
The BND investigation into the jobs program was based on township bank statements, documents from IDNR and payroll records from a private St. Louis-based payroll processing company. They showed:
▪ While IDNR officials, working from time sheets, placed the total payout to youths in 2014 at $324,000, payroll records from the private payroll firm put the amount at $425,000. Some teens in the 2014 program were overpaid by as much as $99 to $516 a paycheck for up to 60 hours a week. Grant regulations limited total weekly work hours to 40. Typically, the youths would earn about $720 every two weeks.
▪ While contracts with IDNR signed by Hamilton stated he could not benefit personally from the grants, 13 youths were sent to work at Hamilton Construction, according to the time sheets. They provided the company with free labor during the summer of 2014, worth about $40,000.
▪ The state grant money could not be used for any other purpose than paying youths, but payroll records showed the township ignored this rule and used some of the money to pay employer taxes like FICA and worker's comp.
▪ An IDNR auditor in 2014 discovered the township was paying the youths for their lunch hours, even though the youths had clocked out. This resulted in about $40,000 being added to what the township had to repay the state.
▪ Despite a grant requirement that people involved in the administration of the program could not personally benefit, Hamilton Dean received a check from the 2013 grant for $2,500 as a “grant writer.” The next year, she got a check from the township general fund for $6,912. On the check’s memo line, it states “youth grant 2014.” A grant writer was not needed for the program, which required only that a two-page form be completed.
▪ Township officials sent 18 teens to work for a statewide program to curb violence, called Cease Fire. Time sheets totaling $44,000 for those teens were sent to IDNR for credit under the summer youth employment grant, but the state rejected them because Cease Fire was funded by another state agency.
The financial records showed Hamilton only needed to make a single phone call to First Illinois Bank each time he wanted to transfer money from the Township Summer Youth Employment Fund account into the township's general operating fund. He funneled at least $305,000 into the general fund over the two-year life of the program.
Once the funds were removed from the restricted youth fund, Hamilton was able to use them to cover his fraudulent credit card charges and help pay other costs, such as the salaries of friends and relatives on the township payroll.
In a city where 44 percent of residents live below the federal poverty line, the township has more than two dozen employees and operates on a budget of about $1.3 million a year.
Bank records showed that when it came time to tally up with IDNR at the end of each summer and return any unused grant funds, Hamilton kept quiet about a sizable surplus remaining in the youth job bank account. This was revenue from the original $200,000 secret loan and the additional $100,000 from a certificate of deposit.
IDNR, which relied solely on time sheets signed by the youths, determined the township owed a $136,000 refund for the 2014 program. Hamilton said the youth fund account was fully depleted and requested that a monthly repayment plan be set up, according to documents from IDNR and bank statements.
The monthly installment plan was approved in March 2015. Three years later, the township still owes the state about $120,000, according to documents provided by IDNR.
A total of $173,500 remained in the youth fund at the end of the 2014 program. Over the next few months, Hamilton transferred this amount to the general fund in four transactions, bank records showed.
$70,000 just in the nick of time
The township summer jobs program served 47 teens in 2013 and 100 in 2014. Total grant money for the first year was $174,000 and jumped to $460,800 for the second year.
At the conclusion of the first program in early September 2013, IDNR auditors determined by examining time sheets that only $145,000 had actually been used. Township officials refunded just $29,000.
But $70,000 in proceeds from the secret loan were transferred from the youth employment fund on Nov. 25, 2013, by Hamilton without the knowledge of IDNR, according to bank records.
It came just in time.
Considering the bills the township then faced, including thousands of dollars in unbudgeted credit card purchases, the general fund would have been in the red without the $70,000 youth fund transfer, bank records showed.
One of the largest township expenses covered by the transfer was $49,442 charged between July and October by Hamilton on his public credit card, including a one-month tab of $22,955 in August.
On each of the IDNR grant contracts with the township, two “chief officers” were listed: Oliver Hamilton and former township business manager Yvette Johnson. Johnson was convicted of felony vote fraud in federal court in 2005. Because the felony was more than five years old in 2013, grant rules allowed her to be involved in the program. She could not be reached for comment.
June Hamilton Dean was listed as the “primary contact” on both contracts.
The financial records showed that a business connected to Hamilton Dean also benefited from free labor under the program, despite the contract language prohibiting conflicts of interest and personal benefit.
Eighteen summer youth workers in 2014 worked at Hamilton Learning Center, 3232 State St., a report to IDNR stated. The property is owned by Hamilton Dean and her daughter. The time sheets provided no record of the exact work the teens did at the center.
But the largest employer of the program’s participants was the township itself. Forty teens worked at township headquarters in the Clyde C. Jordan Senior Center from June 15 to Sept. 1, 2014. At the time, the township had 26 regular full-time employees to answer phones, do maintenance, manage financial records and cook lunches served to senior citizens. Again, the time sheets provided no record of the kind of work the teens did there.
“This grant will assist by engaging our youth with activity through sports and recreation,” the grant application submitted to IDNR in 2013 stated.
In 2014, the township initially proposed to expand the program to 100 teens with a payroll of $250,000. But in a second, updated application the amount jumped to 110 kids with a total grant request of $460,800, which was approved. There was no explanation for why $250,000 was enough for 100 teens, but nearly double the money was needed for just 10 more. In the end, 100 youths participated in the 2014 program, according to the time sheets.
In the 2014 grant application, the program’s curriculum was supposed to include “sports, classes, special events, aquatics, playground and maintenance.” There was no mention of "conservation."
The 29 teens in the program not assigned to work at the township, the Hamilton Learning Center or Hamilton Construction Co. worked at East St. Louis day cares, Brooklyn Township offices, the Jackie Joyner Kersee Center and what were described as “community gardens.“
Another difference in the 2014 program was the way the kids got paid. In 2013, all the teens were paid with a check prepared by the township or a payroll preparation service. The next year, 70 of the 100 youths had their pay directly deposited in their bank accounts, meaning no checks or signatures.
Haine, the state senator who co-sponsored the law that funded the statewide jobs program, said East St. Louis Township's handling of the two-year program is not what the legislature intended.
“It’s a disservice to the kids and their families,” he said.