Tariq Bokhari faces new questions about COVID-19 relief money

Charlotte City Council member Tariq Bokhari raised the prospect of the city giving $500,000 in federal COVID-19 relief money to a business assistance program linked to the nonprofit he runs, say three council members who said they raised concerns about the idea earlier this year.

Bokhari’s suggestion stands separate from another proposal he made to have the city direct $1.5 million in taxpayer money to a program run by Carolina Fintech Hub, where he is executive director.

Two of the council members told the Observer that they questioned whether such a deal would violate the city’s ethics policy that forbids officials from gaining personally from their positions in public office. A third said she wanted more transparency brought to how the city intended to spend public money.

Bokhari does not dispute that he mentioned the program to city administrators, but said it was part of a broader discussion about how to help the city’s small businesses. He said that he would not have benefited personally from such a deal, which never advanced beyond discussions.

Council members James Mitchell, Dimple Ajmera and Julie Eiselt said that in April, Bokhari suggested that the city give $500,000 to a business accelerator program involving Carolina Fintech Hub and Techstars, a Colorado-based business that helps tech start-ups get access to mentors and investors to boost their chances of success.

A story in an industry publication at the time offered some details, and Bokhari shared a link to it on Twitter in May. It said that Carolina Fintech Hub was working with Techstars on a business accelerator that would focus on small business recovery. Organizers planned to get $500,000 in taxpayer money and have companies work with Techstars, Carolina Fintech Hub, the city of Charlotte and the North Carolina General Assembly, the report said.

“We had a conversation with Tariq and told him, ‘It doesn’t look good,’” Mitchell said.

“Our taxpayers have asked for transparency and accountability for our CARES ACT dollars,” Ajmera said. “Clearly, we need to do better.”

Bokhari is a Republican while the three City Council members questioning him are Democrats.

The concerns are surfacing as the city’s Internal Auditor is examining the handling of COVID-19 relief money and officials are reviewing whether they should revise the ethics policy. City Council members asked for the review during a July 27 meeting after some elected officials questioned the proposal in which the city would have provided $1.5 million to benefit a job training program run by Bokhari’s nonprofit.

Earlier this week, City Attorney Patrick Baker said in an email to city leaders that he would seek more information to determine whether to refer citizen complaints related to the issue to an independent investigator.

Asked whether Carolina Fintech Hub was working on a business accelerator project with Techstars while he was advising the city on how to spend COVID-19 relief money, Bokhari said no, but acknowledged having discussions about the idea with Techstars and Charlotte City Manager Marcus Jones.

“I was having discussions with thought leaders across the industry about how we could bring innovative solutions to Charlotte for the crisis our small businesses were facing due to COVID, and that included people at Techstars,” Bokhari said in written responses to questions submitted by the Observer. “These efforts never got to a point where we were advanced enough to enter into serious negotiations or contracts, as the majority of our focus was dedicated to solving the workforce crisis Charlotte is facing.”

Officials are still vetting potential vendors for a business accelerator program and have not made a choice, the city said in a written statement.

The City Council recently voted to exclude Carolina Fintech Hub for consideration for the $1.5 million to perform workforce development. Some members said providing money to benefit the program run by Bokhari’s nonprofit could give the appearance of impropriety.

Bokhari has said the allegations against him are politically motivated. He alleged that some City Council members are upset that he defended police during a recent debate.

The North Carolina Republican Party filed ethics complaints against Ajmera and Mitchell, alleging they wielded their positions for personal gain. Baker has said those complaints should be reviewed by an outside investigator.

“I know there was no conflict of interest in these recovery efforts over the last 3 months,” Bokhari said.

COVID-19 relief money

Earlier this year, Charlotte received about $154 million from the federal government under the CARES Act, a rescue and relief package approved by Congress in response to the coronavirus. City leaders set aside $50 million for small businesses and workers devastated by the crisis.

Jones has said he asked Bokhari to help city staff decide how money should be spent because of expertise with workforce development and connections in the business community.

But multiple complaints sent to city officials in recent weeks allege that Bokhari’s suggestion to provide money to programs connected to his nonprofit represented a conflict of interest.

Nonprofit executive directors usually play a big role in fundraising for their organizations. Tech nonprofits like Carolina Fintech Hub can leverage the credibility they gain from partnering with local governments to convince private businesses and foundations to donate, according to local financial technology business people.

Baker, the city attorney, last month decided that it would not violate conflict of interest standards for the city to give $1.5 million in COVID-19 relief money to a workforce development program overseen by Carolina Fintech Hub, saying Bokhari would not receive a direct financial benefit.

But some City Council members say officials should consider revising the city’s ethics rules.

Mitchell said local business people called him to complain about Bokhari’s role in deciding how COVID-19 relief money was spent. They were angry city administrators did not initially seek a request for proposals and allow them a chance to obtain public financing for their projects, Mitchell said.

Eiselt said city administrators were told about the concerns about public funding for the business accelerator, but Jones and other staff took no action. Jones has told the City Council he didn’t view the arrangement with Bokhari and the Carolina Fintech Hub as unethical.

Eiselt said she is upset that city administrators did not alert council members that an elected official could potentially benefit from money he’s responsible for helping to oversee.

“It is a fine line,” Eiselt said. “We have got to be careful.”

Charlotte officials did not make Jones or other leaders available for comment.

In written responses to questions submitted by the Observer, city administrators said a Council committee is conducting a review of the city’s ethics policy.

Council member denies wrongdoing

At times, Bokhari’s roles as an elected official and head of the Carolina Fintech Hub have overlapped.

Carolina Fintech Hub, which has three employees listed on its website, agreed to pay Bokhari $200,000 annually to help transform Charlotte into a center for financial technology.

As the city pushed forward on economic development programs and attracted employers to Charlotte, Bokhari sometimes appeared at events in both his capacity as a council member and the executive director of the nonprofit.

Dave Heinen, vice president of public policy and advocacy for the North Carolina Center for Nonprofits, said elected officials who lead nonprofits have an obligation to avoid the appearance of a conflict of interest.

“This has happened before where a lawmaker works for a nonprofit,” Heinen said. “Normally, that person would not be involved in that discussion.”

Bokhari said he has done nothing wrong.

He said that no one complained to him in the spring that his recommendations for the COVID-19 relief money might represent a possible conflict of interest.

But Eiselt recalled a tense conversation about other issues related to his role with the relief money.

“I told him ‘Don’t insult me by telling me I shouldn’t be asking questions,’” Eiselt said.

Fred Clasen-Kelly covers government accountability for The Charlotte Observer, with a focus on social justice. He has worked in Charlotte more than a decade reporting on affordable housing, criminal justice and other issues. He previously worked at the Indianapolis Star.

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