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December 7th, 2011 12:01 am NIGEL JAQUISS | News Stories

Maxed Out at the Urban League

Auditors say the nonprofit group’s president used the League’s credit card for questionable spending.

news1_marcusmundyMarcus Mundy - Image courtesy of The Portland Observer
The president of the Urban League of Portland is under scrutiny by county auditors for more than $44,000 of questionable spending.

Over the past 2½ years, Urban League President Marcus C. Mundy has used the organization’s credit card for what auditors say are expenditures with no clear relationship to the nonprofit’s mission, according to documents obtained by WW under the state’s public records law.

The records show that since 2009, auditors have been pushing Mundy and the Urban League to explain his spending.

Long after auditors requested explanations, Mundy provided receipts for grocery purchases at Costco, Safeway and Fred Meyer; clothes at Target; his children’s cellphone bills and fundraisers at their private school.

He also submitted receipts for a March 2009 trip to Beijing, a $108 receipt dated May 2009 for “human hair,” and many other puzzling expenses. 

Mundy acknowledges he has made mistakes.

“I did not spend enough time on administrative and operational issues,” he says. “But I absolutely did not use the Urban League [credit] card for personal expenses.”

His attempts to provide documentation has not satisfied the county nor the Urban League’s own independent auditors.

“There was no documentation for the business purpose of these charges in most cases,” the Urban League’s auditors wrote six months ago.

One county report, dated Nov. 7, 2011, said the records Mundy recently provided were so incomplete as to be “not auditable.”

Records show the Urban League’s board approved most of Mundy’s spending after the fact—but only after county reviews raised serious questions. And it did so despite the organization’s independent auditor warning that the president’s credit-card use could invite an investigation by the Internal Revenue Service.

Urban League Board Treasurer Charles Wilhoite, who says he’s speaking for the board, acknowledges that the organization’s record-keeping has been sloppy. He says the board is pushing hard for an improved administrative performance from Mundy.

Wilhoite also says the Urban League’s financial health is sound, and the board still supports Mundy. 

“Everybody has total confidence in his ability to continue to lead the League,” Wilhoite says.

Urban League chairman Lolenzo Poe recently went on the offensive against the county’s efforts to hold the organization’s board accountable.

“We regret that you concluded that deficiencies remained at the time of your audit,” Poe wrote the county Oct. 6. “But the existence of those deficiencies is not appropriately attributed to any failure or inattention by the Urban League of Portland Board.” (Poe did not return WW’s calls seeking comment.)

Multnomah County officials say they have run out of patience and may cut off funding to the Urban League as early as next week unless it comes up with an oversight plan.

“Multnomah County takes its role as the steward of taxpayer dollars very seriously,” says county spokesman Dave Austin.

In Portland, the Urban League, whose local chapter was founded in 1945, provides social services for African-American seniors and runs after-school programs for low-income kids. 

The county has paid the Urban League $729,000 over the past three years under a contract to provide services. County money accounts for more than 20 percent of the League’s $1 million annual budget.

The Urban League of Portland has encountered financial problems before. In the late 1980s, financial irregularities at the League led to a crushing $400,000 debt and organizational turmoil. Auditors blamed the League’s board for failure to monitor the spending of then-CEO Herb Cawthorne. 

In 1999, the League again nearly went bust after financial mismanagement by then-CEO Lawrence Dark. Under pressure from Multnomah County and other funders, the board ousted Dark. 

Mundy, 53, a Los Angeles native, moved to Portland in 2000 when his late wife took a job at Nike. He worked in risk management for the accounting firm KPMG and later became a vice president and regional compliance officer for Kaiser Permanente. He is a graduate of Howard University and the University of Oregon’s executive MBA program. 

Shortly after arriving in Portland, Mundy joined the Urban League board. After Dark’s successors restored the Urban League’s financial health, a 2006 county fiscal review gave the League its highest rating—1 out of a possible 4. 

Mundy took over as president and CEO in 2006, and now earns $91,000 annually, records show. Despite Mundy’s background, however, the League’s financial controls broke down under his leadership.

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