Davis pleads not guilty after public corruption indictment

Bill Davis, the former CEO of Community Action of Minneapolis, pleaded not guilty Monday to federal charges of theft and fraud in a public corruption case that alleges he misspent taxpayer money and ordered that his son be paid for work he did not perform.

The judge set Davis' bail at $25,000 and said he must notify the court if he travels out of the state.

A federal grand jury indicted Davis and his son, Jordan, last week. Davis is accused of misspending $250,000 in taxpayer money as he led an organization that provided heating and weatherization assistance to low-income residents, along with career counseling and other services. Davis had run the organization since 1990.

Susan Gaertner, Davis' attorney, said she expects the case will go to trial.

"There is no fraud. There is no theft," she said. "We are looking forward to hearing from the government as to what proof they actually have."

The indictment alleges that Davis ordered that his son be paid more than $140,000 from a "slush fund" that should have gone toward heating and energy assistance.

Jordan Davis allegedly was paid as manager of a Ben & Jerry's ice cream franchise run by Community Action even after he quit and became a Minneapolis police officer in 2008.

Jordan Davis pleaded not guilty to theft and fraud charges last week. He was released on $25,000 bond and allowed to take a previously scheduled trip the Dominican Republic with his wife. He must surrender his passport when he returns.

Minneapolis police have placed Jordon Davis on paid leave, which means he has to be at home from 8 a.m. to 4 p.m. during the workweek, department spokesman John Elder said.

Allegations of Community Action's misuse of dollars came to light last year, after an audit by the Minnesota Department of Human Services found that it had misspent at least $800,000 between 2011 and 2013 on a car loan for Davis, travel, golf and other unauthorized expenses.

After the audit was first reported by the Star Tribune, the state raided the organization's offices, confiscated documents and shut it down. Hundreds of Community Action of Minneapolis employees were laid off.

Michelle Brown worked in the organization's finance department, and came to the courthouse for Bill Davis' first court appearance.

"I am extremely upset that he has the audacity to plead not guilty. Everyone in that office felt his wrath," Brown said.

The indictment says Davis allegedly threatened to fire or suspend employees who did not follow his directives.

"We all knew he was taking trips, but it was always a better day when he wasn't there," Brown said.

Davis has denied any wrongdoing.

Alejandra Matos • 612-673-4028