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Street roots 3 Aug. 1, 2014 Legal limbo: Safety Net of Oregon’s payee trials continue Clients o f the beleaguered nonprofit say their savings are locked up while the investigation continues BY JAKE THOMAS STAFF W RITER T I A t’s been four months and John Munro still doesn’t know where his money is or when he’ll see i t Munro entrusted a $130,000 inheritance to Safety Nèt of Oregon, a now shuttered Portland nonprofit that was tasked with administering the federal disability and veterans’ benefits for individuals who need help managing their money. Some of its former clients, like Munro, forked over their savings or inheritance to Safety Net for safekeeping. In April, Safety Net was shut down by the Social Security Administration over concerns it was fraudulently mismanaging clients’ funds. Now some clients are .still struggling to find out what happened with their money. “I don’t know how much is gone or whatever,” says Munrè. “I really don’t know.” If someone receives federal disability benefits but is deemed by the Social Security Administration to he unable to manage their own funds due to a physical Or mental impairment, they are assigned a payed, an individual or an organization charged with making sure the money is used to pay the recipient’s rent, bills and other necessities. Saféty Net was the state’s largest payee service with about 1,000 clients. Kathy Wilde, litigation director for Disability Rights Oregon, says that some of Safety Net’s clients (she’s not sure how many) came into money from a settlement, inheritance or trust and handed their money over to the nonprofit. In March, agents With the Office of the Inspector General executed a search j^utijteast. : Morrison Street, seizing financial records and computers. The affidavit in support of the search warrant states that during a 2013. review by the Social Security Administration, Linda Stelling, CEO of Safety Net, produced records showing that . thé nonprofit had $1.3 million in conserved client funds. However, bank statements, STREET R O O T S P H O T O John M unro is one o f m ultiple customers o f the now-shuttered, Safety N et o f Oregon who wants to know w hathappened to the money he gave to the organization fo r safe keeping. according to the affidavit, showed a balance of approximately $670,000. The affidavit states that the Social Security Administration’s review found there, was a deficiency of more than $600,000 in Safety Net’s books, which Stelling attributed to a software problem. Stelling, who is described as appearing “overwhelmed,” provided contradictory information during the review, according to the affidavit. According to Wilde, the seized computers might contain information that could corroborate the amount of money Safety Net was holding for its clients. However, she says,they are currently in the poggegsion^of thé Û.S. Department of Justice^ and she- doubts that the records are adequate enough to determine how much money each client is owed. 7 “It’s kind of a catch-22,” says Wilde. Wilde says that there are two potential ways Jor former clients to access funds Safety Net was holding for them that haven’t been disbursed. If someone is convicted *of a. crime iri connection to mismanagement of funds at Safety Net, then former clients could get their money through a fund set up for crime victims, says Wilde. Currently, no one has been indicted for any Crimes related to Safety N et The Social Security Administrationis also responsible for reimbursing funds that were mismanaged by a payee, says Wilde. But she doesn’t know when either option will produce results and doesn’t expect the situation to be resolved soon. “It could be months. Could be a year,” she says. “I have no idea what’s going to happen.” In the meantime, Wilde is circulating forms to former Safety Net clients so they can document how much money they are missing. She’s distributed the forms to local social service agencies with instructions that they be forwarded to the U.S. Attorney’s Office for Oregon. Helen Cooper, special assistant .U.S. attorney, says that she has received fewer than 20 forms claiming varying amounts of money: She says that the point of these records is to give Safety Net clients a venue to communicate any information that the U.S. Attorney’s Office should have. Citing an ongoing criminal investigation, Cooper wouldn’t comment specifically on the time frame of when clients might get their money, when an indictment might be’ coming or on the state of Safety Net’s records. The amount of restitution, she . noted, will be determined by a court. “The good news is that there were bank records,” she says. “And bank records speak for themselves.” s> E^n<as>u former client of Safety. Net who turned in a form, doesn’t want his real name used because he is worried that “they” will ‘retaliate. By they, he means the array of government offices he’s contacted trying to get the $7,000 savings that Safety Net was holding for him. He says he has gone to the local Social Security office three times and contacted the offices of Sen. Ron Wyden Bust to boon: City Hall sees green in legalized marijuana legalization. “It’s really such a massive topic that we’re just trying to get our arms around it,” says or decades, cities have spent untold Andy Smith, Portland’s state government sums of money trying to prevent people from possessing and relations manager. consuming drugs. With Oregon potentially Smith says that one of the big issues Portland will be grappling with if marijuana poised to legalize marijuana, the state’s largest city is already taking steps to benefit is legalized this fall, is how much tax revenue it will bring in for the city. He financially from pot being freely sold. points out that the initiative that will be on However, there are concerns from Portland the ballot this fall prohibits local officials that legal weed still won’t pay off. governments from taxing marijuana. In July, the Oregon Secretary of State’s The way the initiative is written, the office announced that an initiative seeking OLCC is responsible for collecting taxes, to legalize marijuana had qualified for the which will run $35 per ounce on all November ballot Sponsored by a well- “marijuana flowers,” $10 per ounce of all funded group called New Approach Oregon, “marijuana leaves” and $5 per “immature the initiative would legalize recreational plant” The money collected by the OLCC sales of pot, assigning the Oregon Liquor will be passed along to the state treasurer. Control Commission, OLGC, a regulatory From there, 40 percent will go the Common role. School Fund, 20 percent will go to mental Portland Mayor Charlie Hales is already health and addictions treatment, 15 percent preparing for legalization. According to Josh to: the state police to assist local law Alpert, director of strategic initiatives for enforcement to help out with its new duties the mayor’s office, Hales has assembled a and 10 percent shall go to the cities. And task force of 20 and growing City Hall that’s where things get tricky. staffers encompassing a wide range of The initiative lays out a complicated bureaus and offices, including police, formula for calculating how much of that 10 revenue, neighborhood involvement, percent each city gets, which is calculated development services and others. Alpert by population and the number of pot says that the task force was initially formed retailers. in response to d new state law that allows “It’s really hard to estimate what the for medical marijuana dispensaries, but was broadened to examine the effects e t outright BY JAKE THOMAS STAFF WRITER 8 dollar distribution is,” says Scott Karter, audit and accounting division manager at the Portland Revenue Bureau. “The revenue picture is very unclear at this point.” Although Colorado and Washington have legalized pot, he says that it’s hard to look to those states to see how things could play out in Oregon because their legalizing initiatives are so different. One key way they differ is that the Colorado and Washington laws allow local governments to tax pot sales. Earlier this year, Gresham, Fairview and Clackamas County all passed one year bans on medical marijuana dispensaries. The legalization initiative allows local governments to ban pot shops from opening and Rep. Earl Blumenauer, in addition to the U.S. Attorney’s Office, all to no avail. Francis says he wants to move, but he can’t because he can’t access his savings to pay for it. “If it were the other way around, they would downright get their money,” says Francis, who feels he is being punished for his thrift Ann Mohageri, spokesperson for the Social Security Administration’s office in Seattle, told Street Roots that hér agency recognizes that this is a challenging situation and wants towork with former Safety Nétclients and their new payees to make sure that their needs aré being m et She says that if a client has an urgent need, the Social Security Administration will review its records to see if it can pay out any money owed. The Share & Care House, a social services nonprofit based in Puyallup, Wash., with an officé in Tigard, became the payee for about 400 former clients of Safety Net, according to Charlene Hamblen, the group’s executive director. Hamblen didn’t comment on what happened to the savings accounts of former Safety Net clients. When Safety Net was forced to shut its doors, it threw many of its clients into financial turmoil. Many of them suffer from severe disabilities that made negotiating for á new payee difficult. With their payee going oút of business, some clients faced the very real possibility of-being unable to pay their rent or other necessities. In response, Disability Rights Oregon and the Oregon Law Center sued the Social Security Administration over its handling. situation, which led to ,a federal judge , , ordering that the agency automatically assign Safety Net clients a new payee. “If this situation ever arises again, the sooner they blow the whistle the better,” says Wilde, who notes that at last count the number of people who are still without a payee was down to 20. in their jurisdictions. If these cities ban retailers, Karter says it’s possible that more shops will open in Portland, which will bring in more revenue for the city. In July, economic consulting firm ECONorthwest released a study that found that if Oregon voters legalize pot this fall, it could generate $38.5 million in excise tax revenue during the first fiscal year and $78.7 million in the first full biennium of tax receipts. However, the study does not examine how legalization might affect courts, police and jails. The initiative assigns most of the regulatory authority to the OLCC, and, if approved,: will give local governments few tools to regulate marijuana retailers. Smith says the city has faced a similar scenario with alcohol. “We’ve had challenges on the alcohol side, where bars and clubs can go and how they lose their license,” he says. “If they are bad actors, we don’t have a lot of control over that.” Portland has a “Time, Place and Manner” ordinance in place that allows it to place some restrictions oh problem bars and require them to go through an abatement plan. However, the OLCC retains much of the licensing power over bars. Alpert says the city might adopt a similar ordinance to regulate legal marijuana facilities. Smith points out one key way that Portland’s challenges with regulating alcohol might differ from regulating pot. “Historically on the alcohol side, the costs are higher than what we get in revenue,” he says. “I don’t know if it’s fair to say that’s going to be the same with marijuana.”
