The documentation of loans a nonprofit made with federal aid it received through the city of Denver “appear to be disorganized, with no order of consistency,” a performance review conducted by the city found.
The nonprofit, the Denver branch of Seedco Financial Services, also extended loans for a job development project in Aurora when it should have steered job growth to Denver, the review said. And it improperly commingled funds, it states.
In one instance, Seedco tried to reallocate $400,000 authorized for a development project that was never finalized. It tried to put the money toward another development project but should have returned the money to the city, the review says. The city is seeking reimbursement for that money, and Seedco says it is planning to give that money back this week.
The review, kept under wraps until Tuesday, has become a source of contention for some Denver City Council members. Denver’s Office of Economic Development conducted the review.
Seedco previously received a contract to draw upon $3 million in federal aid from the city of Denver. The money was meant to spark community development, and Seedco officials have said they matched the city’s investments nearly 3-to-1.
Monday, the council advanced another $2.9 million contract for Seedco, but members Jeanne Faatz, Charlie Brown and Judy Montero dissented, and Michael Hancock was absent. Final consideration will occur in December.
The review had been withheld from the public while Seedco fashioned a response.
Council members previously had been briefed on the results of the performance review in executive session.
Peter Chapman, a former adviser to Denver Mayor John Hickenlooper, left his city job to run the Denver branch of Seedco. He has characterized the mistakes as minor and has the backing of the city’s Office of Economic Development and Councilman Rick Garcia.
Seedco officials said they want to improve their filing system, which was described as inconsistent by reviewers.
Seedco officials also said they asked city officials to conduct on-site reviews in 2007 and 2008, but the appointments were canceled.
