Lawsuit: Minneapolis' violence prevention office used illegal process to award millions in grant money

A new lawsuit alleges that the city of Minneapolis' violence prevention office used an illegal procurement process to arbitrarily select recipients for millions of dollars in taxpayer-funded grant money.

The Neighborhood Safety Office, formerly called the Office of Violence Prevention, also used federal COVID-19 relief money to improperly pay for lobbying and political causes, according to the lawsuit, filed by Minneapolis resident and attorney Zachary Coppola in Hennepin County District Court on Thursday.

Using federal relief money, a Neighborhood Safety program awarded $175,000 to an organization that lobbies the city on issues related to housing, public safety, transportation and human services, according to the lawsuit.

"Thus, the city is paying a lobbyist to lobby the city," the civil complaint says. "Not only is this a conflict of interest, but all federally funded violence prevention contracts expressly prohibit the use of funds for lobbying or political activities, so this use of federal funds is illegal."

The lawsuit identifies this as a case where the city awarded money to a person who has demonstrated a "lack of fiscal responsibility." A Hennepin County judge found the director of the organization liable in 2022 for failing to pay back a $77,000 loan, according to the lawsuit. In the court case, the individual claimed she never took out the loan in question, saying she'd been defrauded by a consultant whom she had hired to help her business. Yet the court found she offered no evidence to support her claim and could not remember how much she had paid the alleged consultant, how she paid or when the payment occurred.

One month before this judgment was rendered, the organization received a $75,000 contract for violence prevention services, according to the lawsuit. "In response to [Coppola's] Data Practices request for information about this contract, the City has been unable or unwilling to provide invoices proving how this grant money was spent."

The director of that organization, who is not named in the complaint, was appointed by Mayor Jacob Frey to a city housing committee, where she served from 2019 to 2022, the suit says.

When Coppola requested public information on the Neighborhood Safety Office for his investigation, the city stonewalled him, made misrepresentations concerning his request and then stopped responding, in violation of the Minnesota Government Data Practices Act, the civil complaint says.

The lawsuit asks a judge to void contracts and suspend programs funded by the community safety office "before more public funds are improperly spent." It does not request a monetary award beyond attorneys fees.

In an interview, Coppola said he believes in the value of community-based alternatives to traditional policing, but he doesn't think the city has provided sufficient oversight to ensure meaningful impact.

"We have a chance to do something here with these programs that could then be a model for other places in the country," he told the Star Tribune. "But as it's currently being operated, there's a good chance that they're not doing what they're supposed to do. In the long run, that's going to both make it seem like these programs don't work and it's going to make citizens distrustful of the program."

The city attorney was still reviewing the "verbose" lawsuit Thursday, said spokesman Casper Hill, but "it is clear that it is not alleging that the City engaged in any sort of criminal behavior. Rather, the Complaint alleges the City engaged in an 'arbitrary and capricious' procurement process and cites various alleged conflicts of interest — many of which are subjective and are not actual conflicts of interest in a government procurement process.

"Grants are lawfully awarded to organizations that have proven to do good and well-connected work in the community. Oftentimes, those organizations are run by leaders that have deep ties to the community, and many times work for various community-facing entities. There's nothing criminal or illegal about that."

Minneapolis launched the Neighborhood Safety Office in 2018 to address violence through public health. Frey has proposed a nearly $18 million budget for the office in 2024, up from $2.7 million in 2020.

The office oversees the Violence Prevention Fund and Gang Violence Initiative — grant programs funded in part by a pandemic stimulus package passed by Congress in 2021. Each program has paid out millions of dollars since 2019 to nonprofit organizations and private contractors aligned with the community safety-driven mission. The final grant recipients are chosen by the director of the Minneapolis Office of Public Safety.

The lawsuit says the evaluation process is so flawed that it falls short of "the most basic competitive bidding or proposal evaluation process," and is therefore illegal.

According to the lawsuit:

To decide which recipients should make the finalist list, city evaluators divvy up the applications for the Gang Violence Initiative grants. One set of reviewers grades Proposal A, and another set of reviewers grades Proposal B. The process on its face doesn't create an "apples to apples" comparison, because reviewers of Proposal A may grade more leniently or conservatively than reviewers of Proposal B.

The reviewers then all meet for a group session, in which they are given the opportunity to change their scores — a step that "undercuts the purpose of individual scoring."

In at least one case, when two reviewers didn't show up for the group session, their scores were dropped. As a result, the final average score for the Greater Minneapolis Council of Churches fell 13 points to 70 out of 100. The lawsuit says the Church Council ended up losing the bid to a competing applicant who initially scored lower — a result based on evaluators' attendance rather than merit of the proposals.

The lawsuit lists several examples of what it calls improper evaluations.

In one case, in response to a question on the application asking what tools the organization had to "ensure fiscal responsibility for a project like this," the proposer wrote: "N/A." Still, several evaluators gave the application high marks on "fiscal responsibility," the lawsuit says. "The score given is untethered to the contents of the response."

The lawsuit also cites examples of evaluators violating the office's "No Outside Knowledge Rule," which states that a proposal be judged solely on the contents of the application and not "history/experience with the organization or personal knowledge of the applicant agency or its staff."

One evaluator wrote they were "aware that organization has some experience with law enforcement ... but this was not clear in proposal." Another commented: "Has had contracts with city in the past." Said another: "Seems like they have done business with the city before."

The lawsuit describes one organization to which the city awarded $85,000 to lead a statewide movement to provide unemployment benefits to high school students during the pandemic. The group calls itself a "coalition of lobbyists, journalists, and stakeholders." To celebrate the political leaders who helped support their lobbying efforts, the organization co-hosted a ceremony where it presented awards to Gov. Tim Walz's administration and Attorney General Keith Ellison, the suit says.

"Federally funded contracts prohibit lobbying and political activities, and this use of federal funds is illegal," said the lawsuit.

Some of the funding from the office went to applicants who also held political or advisory positions in Minneapolis, raising questions over whether they were given preferential treatment, the lawsuit says.

More than $1 million went to the neighborhood organization run by the former commissioner at large and vice president of the Minneapolis Park and Recreation Board, according to the suit. Another $185,000 was paid to a City Council-appointed member of the city's Violence Prevention Steering Committee. Other grants went to a city employee and a contractor with the city.

"These apparent conflicts of interest deserve more scrutiny," the complaint says.

Coppola said he became concerned about the city's procurement practices after reading of fraud allegations against Feeding Our Future, a nonprofit facing dozens of federal charges for improperly paying out hundreds of millions of dollars.

He saw the city's request for proposals for Neighborhood Safety grants. He said he often couldn't find basic information about the grant recipients, including contact information on their web pages. While still in law school at the University of Minnesota, Coppola filed a series of requests seeking access to public records.

City officials initially denied him records that they claimed weren't public and later "resorted to silence when called out on those misrepresentations," according to the suit. In some cases, the city unilaterally closed his data requests after producing only some of the documentation required under law.

Though Minnesota data laws require government agencies to fulfill data requests in a "reasonable" amount of time, it took Coppola 13 months to gather "basic information" on applicant proposals and the scoring process by which each was judged. He has yet to receive all of it.

(The Star Tribune also requested contract documents from the Neighborhood Safety Office. Nine months later, the city has failed to provide all of the data.)

The city's "stonewalling" is unlawful, the complaint says, because it "denies taxpayers and proposer their right to challenge" the public contracts.

"We can't figure out why the city is not being patently transparent with the award and use of public funds," said Dean Thomson, a Minneapolis-based attorney. "There's no good reason for them not to have responded to our [public records] requests. Regrettably, they are only bad reasons why they wouldn't respond — and based on the limited amount of data they've given us, we find real problems with the program."