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2005-02-15 23:43:46 UTC
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.FBI is told of $75,000 bribe figure
Tony Kennedy and Paul McEnroe, Star Tribune
The FBI has been told that St. Paul Mayor Randy Kelly's senior policy
adviser, Sia Lo, allegedly demanded a $75,000 bribe last year from a
businessman who wanted to develop a Hmong funeral home with city
backing, a source interviewed by the FBI said Wednesday.
The businessman rejected Lo's demand and dropped out, the source said.
Soon the deal came together for the Vang Pao Foundation, which had been
negotiating for the site for several years but was having trouble
raising the money.
The Vang Pao Foundation is a charitable organization that is currently
under investigation by the state attorney general's office for
allegedly soliciting funds without being registered as a public charity
since 2000.
Lo, 38, has vigorously denied the bribery allegation. He is on vacation
while Kelly considers placing him on administrative leave. Lo worked
closely on the funeral home project with his personal friend at the
Vang Pao Foundation, Cha Vang. And Lo's sister, Song Lo Fawcett, was
involved in the funeral home deal as a private attorney.
Despite those personal connections, and even though Kelly knew Lo was
under FBI investigation, Lo continued to represent the mayor's office
in the taxpayer-subsidized funeral home project all the way to the
ground-breaking ceremonies last fall.
In a written statement, Kelly said Wednesday that the FBI had
instructed him not to change Lo's duties or take any action that would
raise Lo's suspicion that he was under investigation.
Denials of conflict
Cha Vang, who listed himself on deal documents as "senior project
adviser" for the Vang Pao Foundation, did not return phone calls
Wednesday. He has previously denied wrongdoing.
He is the son of revered Hmong military leader Gen. Vang Pao.
Former St. Paul Police officer Tou Mo Cha has alleged that Cha Vang
told him he could get City Hall to fix a liquor license problem for
$10,000 to $20,000. That allegation is part of a new FBI probe
initiated by St. Paul Police Chief John Harrington.
On Wednesday, Lo, through his newly hired spokesman Mike Zipko,
repeated an earlier denial of any wrongdoing. His sister, Song Lo
Fawcett, also speaking through Zipko, said it wasn't a conflict of
interest for her to represent the real estate company that bridged the
funeral home deal between the city, the Port Authority and the Vang Pao
Foundation.
Gerald Hendrickson, a lawyer in the St. Paul City Attorney's Office,
declined to comment when asked Wednesday if Sia Lo's connections to the
law firm and to Cha Vang violated the city's conflict-of-interest
policy.
The mayor said in his statement that Lo was assigned to work with the
city's lead staff person on the project "as a respected leader of the
Hmong Community with direct knowledge of the needs for a new funeral
home."
Kelly didn't respond to a question about whether it was a conflict for
Lo to be involved in a deal involving his sister.
A director of Hmong studies at Concordia University in St. Paul said he
had no firsthand knowledge of the funeral home project. But he said
that steering business deals to family and friends was a common way of
doing business for the Hmong community in Laos.
"We're not in Laos anymore. We're in America now," said Prof. Lee Pao
Xiong, a former member of the Metropolitan Council. "They're serving in
a public service capacity, so they're subject to open scrutiny.
Perception is the reality."
Steve Hardie, who managed the funeral home deal for the St. Paul Port
Authority, said that with the funeral home project, the city and the
Port Authority dealt exclusively with the Vang Pao Foundation and J.B.
Realty Co. of St. Paul. The realty company served as the foundation's
"credit facility" for financing the project
Last February, when the Vang Pao Foundation failed to come up with
financing to buy the Port Authority's 3-acre site for $32,000 and build
a funeral home for more than $3 million, J.B. Realty Co. stepped in on
the foundation's behalf, Hardie said.
The deal gives the foundation the option to buy the property from the
realty company at cost.
Hardie said Lo guided the project for Mayor Kelly, Cha Vang represented
the foundation and Lo's sister represented J.B. Realty.
"He [Sia Lo] was keeping an eye on it, making sure everything was in
motion," Hardie said.
Hardie said $450,000 in taxpayer money went into the project to pay for
the cleanup of what was the State Street garbage dump on the West Side
flats.
The Port Authority owned the land and was under no legal obligation to
let the project go to bids.
Hardie said the Port Authority received only rudimentary background
information on the Vang Pao Foundation and never received financial
information about it. He said he didn't need that information because
the Port Authority dealt with J.B. Realty, not the Vang Pao Foundation,
to make sure money was in place.
Hardie said the land was sold at its appraised value as part of a
"goodwill" project for the Hmong community.
Soccer festival
The attorney general is investigating "whether the Vang Pao Foundation
is soliciting charitable contributions in Minnesota while not
registered," according to a lawsuit filed in November.
According to the suit, the attorney general's office said there is
reason to believe the foundation has been receiving money from various
sources and not reporting it. The undocumented income sources might
include the popular Hmong soccer tournament and festival held annually
in St. Paul on July 4th weekend, the suit said.
The investigation was triggered, in part, after reports surfaced in the
media that a Twin Cities bank gave the foundation $60,000 to seed an
investment fund to help Hmong entrepreneurs. The foundation publicized
its plans to raise up to $3 million for the fund, according to court
documents.
The Vang Pao Foundation hasn't registered as a charity in Minnesota
since 2000, the year it filed incorporation papers with the Minnesota
secretary of state, according to the suit.
The court ordered the foundation to provide financial records,
personnel data and other information to the attorney general's office
by mid-January 2005, but a representative of the foundation said it
"could not meet that deadline because of the difficulty of gathering
... documents." The attorney general's office extended the deadline to
the end of February.
Even though the city and Port Authority steered the funeral home
project to the Vang Pao Foundation, numerous other parties have been
looking to get into the business or to expand.
Charlie Godbout, a mortician and real estate agent for the owners of a
Hmong funeral home in Maplewood, said Wednesday that "there have been
all kinds of attempts" to open new Hmong funeral homes in St. Paul.
Godbout said he is currently working with Peter Moua of Metro Funeral
Home to buy a private site one block away from the Port Authority site.
"It's like 30 years ago in the St. Paul, everybody wanted to get into
the bar business," Godbout said. "Now everyone wants to get into the
([Hmong] funeral home business."
Kelly said the administration was not aware of any private mortuary
companies that expressed an interest in being part of a solution to the
shortage of Hmong funeral capacity in St. Paul. He also said the
foundation emphasized it would offer funerals at "a more reasonable
price."
The funeral home is currently under construction.
Curt Brown contributed to this story.
Tony Kennedy is at ***@startribune.com or 651-298-1543. Paul McEnroe
is at ***@startribune.com or 612-673-1745.
.FBI is told of $75,000 bribe figure
Tony Kennedy and Paul McEnroe, Star Tribune
The FBI has been told that St. Paul Mayor Randy Kelly's senior policy
adviser, Sia Lo, allegedly demanded a $75,000 bribe last year from a
businessman who wanted to develop a Hmong funeral home with city
backing, a source interviewed by the FBI said Wednesday.
The businessman rejected Lo's demand and dropped out, the source said.
Soon the deal came together for the Vang Pao Foundation, which had been
negotiating for the site for several years but was having trouble
raising the money.
The Vang Pao Foundation is a charitable organization that is currently
under investigation by the state attorney general's office for
allegedly soliciting funds without being registered as a public charity
since 2000.
Lo, 38, has vigorously denied the bribery allegation. He is on vacation
while Kelly considers placing him on administrative leave. Lo worked
closely on the funeral home project with his personal friend at the
Vang Pao Foundation, Cha Vang. And Lo's sister, Song Lo Fawcett, was
involved in the funeral home deal as a private attorney.
Despite those personal connections, and even though Kelly knew Lo was
under FBI investigation, Lo continued to represent the mayor's office
in the taxpayer-subsidized funeral home project all the way to the
ground-breaking ceremonies last fall.
In a written statement, Kelly said Wednesday that the FBI had
instructed him not to change Lo's duties or take any action that would
raise Lo's suspicion that he was under investigation.
Denials of conflict
Cha Vang, who listed himself on deal documents as "senior project
adviser" for the Vang Pao Foundation, did not return phone calls
Wednesday. He has previously denied wrongdoing.
He is the son of revered Hmong military leader Gen. Vang Pao.
Former St. Paul Police officer Tou Mo Cha has alleged that Cha Vang
told him he could get City Hall to fix a liquor license problem for
$10,000 to $20,000. That allegation is part of a new FBI probe
initiated by St. Paul Police Chief John Harrington.
On Wednesday, Lo, through his newly hired spokesman Mike Zipko,
repeated an earlier denial of any wrongdoing. His sister, Song Lo
Fawcett, also speaking through Zipko, said it wasn't a conflict of
interest for her to represent the real estate company that bridged the
funeral home deal between the city, the Port Authority and the Vang Pao
Foundation.
Gerald Hendrickson, a lawyer in the St. Paul City Attorney's Office,
declined to comment when asked Wednesday if Sia Lo's connections to the
law firm and to Cha Vang violated the city's conflict-of-interest
policy.
The mayor said in his statement that Lo was assigned to work with the
city's lead staff person on the project "as a respected leader of the
Hmong Community with direct knowledge of the needs for a new funeral
home."
Kelly didn't respond to a question about whether it was a conflict for
Lo to be involved in a deal involving his sister.
A director of Hmong studies at Concordia University in St. Paul said he
had no firsthand knowledge of the funeral home project. But he said
that steering business deals to family and friends was a common way of
doing business for the Hmong community in Laos.
"We're not in Laos anymore. We're in America now," said Prof. Lee Pao
Xiong, a former member of the Metropolitan Council. "They're serving in
a public service capacity, so they're subject to open scrutiny.
Perception is the reality."
Steve Hardie, who managed the funeral home deal for the St. Paul Port
Authority, said that with the funeral home project, the city and the
Port Authority dealt exclusively with the Vang Pao Foundation and J.B.
Realty Co. of St. Paul. The realty company served as the foundation's
"credit facility" for financing the project
Last February, when the Vang Pao Foundation failed to come up with
financing to buy the Port Authority's 3-acre site for $32,000 and build
a funeral home for more than $3 million, J.B. Realty Co. stepped in on
the foundation's behalf, Hardie said.
The deal gives the foundation the option to buy the property from the
realty company at cost.
Hardie said Lo guided the project for Mayor Kelly, Cha Vang represented
the foundation and Lo's sister represented J.B. Realty.
"He [Sia Lo] was keeping an eye on it, making sure everything was in
motion," Hardie said.
Hardie said $450,000 in taxpayer money went into the project to pay for
the cleanup of what was the State Street garbage dump on the West Side
flats.
The Port Authority owned the land and was under no legal obligation to
let the project go to bids.
Hardie said the Port Authority received only rudimentary background
information on the Vang Pao Foundation and never received financial
information about it. He said he didn't need that information because
the Port Authority dealt with J.B. Realty, not the Vang Pao Foundation,
to make sure money was in place.
Hardie said the land was sold at its appraised value as part of a
"goodwill" project for the Hmong community.
Soccer festival
The attorney general is investigating "whether the Vang Pao Foundation
is soliciting charitable contributions in Minnesota while not
registered," according to a lawsuit filed in November.
According to the suit, the attorney general's office said there is
reason to believe the foundation has been receiving money from various
sources and not reporting it. The undocumented income sources might
include the popular Hmong soccer tournament and festival held annually
in St. Paul on July 4th weekend, the suit said.
The investigation was triggered, in part, after reports surfaced in the
media that a Twin Cities bank gave the foundation $60,000 to seed an
investment fund to help Hmong entrepreneurs. The foundation publicized
its plans to raise up to $3 million for the fund, according to court
documents.
The Vang Pao Foundation hasn't registered as a charity in Minnesota
since 2000, the year it filed incorporation papers with the Minnesota
secretary of state, according to the suit.
The court ordered the foundation to provide financial records,
personnel data and other information to the attorney general's office
by mid-January 2005, but a representative of the foundation said it
"could not meet that deadline because of the difficulty of gathering
... documents." The attorney general's office extended the deadline to
the end of February.
Even though the city and Port Authority steered the funeral home
project to the Vang Pao Foundation, numerous other parties have been
looking to get into the business or to expand.
Charlie Godbout, a mortician and real estate agent for the owners of a
Hmong funeral home in Maplewood, said Wednesday that "there have been
all kinds of attempts" to open new Hmong funeral homes in St. Paul.
Godbout said he is currently working with Peter Moua of Metro Funeral
Home to buy a private site one block away from the Port Authority site.
"It's like 30 years ago in the St. Paul, everybody wanted to get into
the bar business," Godbout said. "Now everyone wants to get into the
([Hmong] funeral home business."
Kelly said the administration was not aware of any private mortuary
companies that expressed an interest in being part of a solution to the
shortage of Hmong funeral capacity in St. Paul. He also said the
foundation emphasized it would offer funerals at "a more reasonable
price."
The funeral home is currently under construction.
Curt Brown contributed to this story.
Tony Kennedy is at ***@startribune.com or 651-298-1543. Paul McEnroe
is at ***@startribune.com or 612-673-1745.