Longtime Cabrini-Green advocate accused of misusing funds for displaced residents; CHA seeking to amend consent decree

The Chicago Housing Authority is seeking to remove longtime resident advocate Carol Steele from the Cabrini-Green Local Advisory Council’s Community Development Corp. following a report accusing her and others of misusing more than $180,000 intended to help displaced and current residents.

The CHA along with the city filed a motion last week in federal court asking a judge to freeze the funds. The city is also asking for an independent auditor to assess the group’s finances and bar Steele and others from having access to the funds.

Steele, who moved into Cabrini-Green in the 1950s, declined to comment on specific allegations outlined in a report by the CHA’s inspector general.

“I go to the office Monday through Friday and don’t get paid a dime,” Steele said when reached Friday by phone. “This has been going on for years. So that’s all I got to say.”

She pointed out she was not president from 2005 to 2016, but she declined to comment on the time when she did serve as president of the board that oversaw the funds. She plans to meet with attorneys this week to discuss CHA’s motion.

Richard Wheelock, the chief legal counsel at Legal Aid Chicago, which represents the Cabrini-Green LAC, said they are reviewing the motion and the report. He does not represent the Community Development Corp.

“We take the motion very seriously,” Wheelock said. “We are reviewing it and are committed to working with CHA and the city to resolve their concerns. We all share the same goal, and this goal is embedded in the consent decree that the funds are to be used for the benefit of Cabrini-Green residents and displaced residents.”

The Community Development Corp. was created by the Cabrini-Green Local Advisory Council following the 2000 consent decree with the city amid the demolition of the Near North Side public housing complex. A percentage of profits from the development of the land was to be given to the group to help displaced or current Cabrini-Green residents.

But a report from the CHA’s office of inspector general found the funds were used to operate an elaborate council that spent thousands of dollars more each year than other councils.

The inspector general’s investigation, which stemmed from a tip in 2016, detailed corporation expenditures including: $36,899 for a Ford Transit van allegedly only used by Steele; $2,500 toward the funeral for Steele’s brother; and $35,000 by Steele, as well as some of her friends and relatives, to travel to six housing conferences.

One of Steele’s relatives was paid $52,259 from 2011 to 2013 to resolve conflicts in the community, the report stated. Another relative was paid $45,390 from 2018 to 2019 for work as a driver and janitor. Steele was paid $16,800 from 2012 to 2014 for work she did as an administrative assistant, the report found.

Another $25,000 went for cash transactions from 2016 to 2019, but the inspector general couldn’t determine who received the money or what it was used for, the report stated. The report estimates that since at least 2012 Steele, her family and associates misused $183,668.

Sun-Times file

The CHA is asking a judge to amend the consent decree to allow the city and the housing authority, along with the council, to monitor the funds and to appoint the housing authority as a non-voting member of the board that oversees the funds.

The changes would require the board to make public a yearly budget and a yearly report on its finances.

It’s unclear how much money was given to displaced residents. From 2016 to 2018, the corporation gave six $500 scholarships to Cabrini-Green residents, according to the report.

“The abuse of this money is an affront to every resident who was supposed to benefit from it and is a clear violation of the intent and spirit of the decree,” Tracey Scott, CEO of the CHA, said in a statement issued by the agency.

The consent decree was the result of a tenant-led 1996 lawsuit over displacement and the reduced availability of affordable housing. Wheelock said the decree is an important tool of empowerment for the residents who fought to ensure they had a say in their future.

A hearing, expected to be conducted by phone, is scheduled for Aug. 21.

Elvia Malagón’s reporting on social justice and income inequality is made possible by a grant from The Chicago Community Trust.