ST. LOUIS – The State of Missouri is now looking into a whistleblower complaint regarding fears of potential fraud in a City of St. Louis pandemic relief program.
Democratic St. Louis Rep. Steve Butz is the so-called whistleblower. He’s become so concerned with the red flags raised about the possibility of fraud with a grant program that’s supposed to help revitalize struggling areas of north St. Louis that he’s gone to the staff of the Missouri State Auditor.
“With this amount of smoke, we’ve got to know where the truth lies,” Butz said of the troubled program.
He said the list of grants awarding more than $33 million in federal American Rescue Plan (ARPA) funds is putting off more smoke now—it appears that even the businesses and non-profits that were denied grants got $12,500 just for applying.
“We’re going to give them all $12,500 for the trouble of having completed the grant work, which is never the way grants were ever awarded as far as I’m aware,” he said. “It certainly sounds like ‘We’ll give everybody some money, and hopefully it’ll make everybody happy.’”
A spokesman for Missouri Auditor, Scott Fitzpatrick, told FOX 2, “We have received information we are treating as an official whistleblower complaint. We are reviewing now and then will decide the next step to take.”
The review will likely include a look at things, like a life skills school getting $50,000 and a new Mississippi River Museum getting $25,000. Neither building listed in the grant applications appears to be occupied. Both have unpaid property taxes.
At the same time, the head of the Midwest Warriors youth boxing club, which currently has 68 kids and is looking to add baseball, soccer, and chess programs, was denied a grant.
“When you look at how they gave the grant money out, these organizations are getting millions of dollars, and what have they done?” Reggie Williams of the Midwest Warriors Athletic Foundation said.
He says the St. Louis Development Corporation—the City of St. Louis’s economic development arm, which is awarding the grants—is now reconsidering his application.
A spokesman for the St. Louis Mayor’s Office says the city would welcome and fully cooperate with a review of the grant program by the state auditor.
So would the SLDC. A spokeswoman for the agency provided the following statement on the state review:
“We fully understand the immense responsibility that comes with deploying such an unprecedented amount of grants, and we recognize the importance of transparency and accountability in ensuring these resources reach the businesses and communities that need them most. Restoring and maintaining public trust is absolutely critical to the success of this program, and we are committed to doing everything in our power to achieve that.”
The agency has also issued a statement regarding its own internal investigation into the program and a subsequent halt to the disbursement of grant funds, saying in part:
“SLDC is currently conducting an internal investigation to clear up any appearances of impropriety and conflicts of interest surrounding the North St. Louis Small Business & Non-Profit Grant Program. At this time, less than $2.5 million of the $33+ million in grants have been funded. Given the Comptroller’s challenges to the program and to allay the public’s concerns, no additional funds will be disbursed until our investigation is complete and SLDC compliance staff concludes their verification and confirmation process to ensure all conditional awardees are eligible under program guidelines and that all applications were scored and evaluated appropriately.
“We are working to publish a transparency portal on the NSTL Grant page of our website where portions of the applications and scorecards will be available for the public to view… the information in the transparency portal will be made available prior to releasing any additional grant funds…SLDC has until the end of 2026 to ensure that all grant funds are disbursed to qualified applicants.
“This program is far from being complete and will have ongoing compliance monitoring requirements through September 30, 2026. Before disbursing any additional funds, SLDC is committed to completing additional layers of due diligence by increasing the checks and balances on work performed by both SLDC staff and our partners in the administration of these funds.”
