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Senator to seek criminal inquiry of nonprofit agency

State Sen. Ray Cleary said he will request a criminal investigation of Five Rivers Community Development Corp. to see whether public money has been misspent.

Cleary, R-Murrells Inlet, said his staff has drafted a letter requesting such an investigation and he plans to sign the letter and deliver it to 15th Circuit Solicitor Greg Hembree later this week.

"When you're talking about a nonprofit agency that uses state and federal funds, not only do you have to do the right thing but you must have the public's perception that you're doing the right thing," Cleary said Wednesday. "I feel like we need to look into this."

Hembree could not be reached for comment Wednesday.

Hembree said earlier that a criminal investigation of Five Rivers was imminent, but he was waiting for county, state or agency officials to request one.

Beulah White, Five Rivers' executive director, could not be reached for comment Wednesday.

Sam Livingston, president of the agency's board of directors, declined to comment on the pending criminal investigation.

Livingston said Wednesday the board still is working on its own investigation of how the agency has spent public money but did not know when that investigation will be completed.

A review of Five Rivers' finances by The Sun News shows a pattern of questionable spending practices at the Georgetown-based nonprofit, including executive salaries that far exceed the state average, annual pay raises of as much as 29.5 percent for White, regular use of the agency's Volvo for personal reasons and expense reimbursements for travel that appears unrelated to the nonprofit's purpose.

Five Rivers is run by White and her daughter, Dayo Smith, who is the agency's chief financial officer. The nonprofit is supposed to create affordable housing and economic opportunities for Georgetown County's low- to moderate-income residents.

Cleary said he was surprised Five Rivers' board of directors gave White and Smith a unanimous vote of confidence before investigating allegations that they misused public money. The board gave that vote of confidence at its Aug. 29 meeting.

"As a board member, I would have wanted to have some things researched before I went to that level," Cleary said.

The S.C. secretary of state's office, which regulates nonprofit agencies, started an investigation last month of possible financial wrongdoing at Five Rivers.

Secretary of State Mark Hammond said earlier this month that that investigation is in the early stages and that his office may refer its findings to the Internal Revenue Service for further investigation.

The secretary of state's office handles the administrative aspects of an investigation, and it can fine a nonprofit agency or shut it down if laws have been violated. Hembree's office would handle any possible criminal prosecution for alleged misuse of public money.

Georgetown-based Five Rivers received more than $3.8 million in grants and contributions between 1996 and 2004, according to the agency's federal tax returns and financial statements. The agency has not filed a tax return for 2005.

Nearly two-thirds of the agency's money comes from local, state and federal grants funded by taxpayers.

FIVE RIVERS

What it does | Current programs include a seven-day class about starting a business, which is taught four times a year; a four-day class about buying a home, which is taught twice a year; one-day credit counseling sessions offered three times a year; and a $50,000 revolving loan account for small-business owners.

Who is on the board | Sam Livingston, board president, is manager of the Garden City Beach office of state-owned utility Santee Cooper; David Hamilton, board treasurer, is a vice president of BB&T bank in Hilton Head Island; Darren Holmes is director of educational talent search for Horry-Georgetown Technical College; Marjorie Hemingway is owner of trucking business Hemingway Logistics.

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