Friends of Dorothy Rivers describe her as a social missionary with a taste for fancy clothes.
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Once a fixture on the list of the city`s 10 best-dressed black women, the South Side socialite has been honored repeatedly for her contributions to the city and the local Democratic Party, and sits today on the influential Chicago Plan Commission-the government agency that reviews public building in the city and regulates all development in protected lakefront areas.
Rivers` accomplishments are formidable, and include being honored by the Midwest Women`s Center for her contributions to the city.
Six years ago, by stitching together an assortment of government grants and private donations, she started a foundation that purchased and transformed a shuttered Hyde Park nursing home into a care facility for some of Chicago`s most destitute-emotionally disturbed children, pregnant teens and homeless families.
Over the past four years, records show, government agencies have awarded about $8 million in grants to her Chicago Mental Health Foundation, at 6140 S. Drexel Ave., just south of the University of Chicago.
But today, Rivers stands accused by government auditors of misusing millions of that money. Nearly all of her public funding has been halted, and her philanthropic empire is near collapse.
In a 1991 audit, U.S. Department of Housing and Urban Development officials said their agency had spent $2.4 million for services that were minimally provided, if at all, and charged Rivers with engaging in ”a pattern of providing misinformation.”
Foundation officials disagreed with the findings of the HUD audit, but HUD said the foundation did not provide any rebuttal evidence sufficient to prevent loss of funding.
And last month, according to a top Chicago Board of Education official, the U.S. Justice Department subpoenaed the board`s records pertaining to the Pritzker Grinker School, which is housed in the foundation`s facility and serves learning disabled and emotionally disturbed children.
Rivers is the executive administrator of the school, which received $357,303 from the board last year, records show.
Rivers has vehemently denied the charges of mismanagement and fraud. She said in a brief interview that government auditors were ”unethical” and
”haphazard,” and added that public agencies acted unfairly in withdrawing funds. She emphasized that she has reached into her own purse to keep the foundation running.
”Obviously I`m a very committed person or when the government stopped sending funds I would have left,” Rivers said. ”There are two sides to this story.”
Two weeks ago, the city Department of Human Services staff members led about 20 care-worn, homeless people out of the facility, and said they would be placed in other shelters and programs.
And next week, about 10 young wards of the state will be relocated by the Illinois Department of Children and Family Services, a department spokesman said.
That will leave only the two dozen or so Pritzker Grinker students in the 118,000-square-foot facility.
The saga of the Chicago Mental Health Foundation is a tale of best intentions gone awry. The closing of its programs will increase the burden on other cash-strapped inner-city facilities, officials say, and spell the end of a South Side supercenter that could have sheltered and healed the city`s most desperate and disabled citizens.
Rivers, 60, has battled accusations of fraud before.
Her business ventures have included operating a spice company that won Department of Defense contracts to supply pepper and other goods, but eventually dissolved amid debts and bitter court charges of mismanagement and fraud. She worked as an administrator in the psychiatric department of what was then called Michael Reese Hospital and Medical Center.
And she has been an officer and manager of Campus Chicken, a fast-food outlet at 1319 E. 57th St. that last month filed for protection from creditors under Chapter 7 of the federal bankruptcy code, records show.
She has been sued personally nearly 20 times in the past 10 years for allegedly failing to pay off loans, as well as bills from hotels and home furnishing outlets. Judgments totaling more than $50,000 have been entered against her.
”She could have easily declared personal bankruptcy,” said Richard Cowen, attorney for Rivers. ”She settled and resolved every (debt), to my knowledge. I think that`s an indication of a lady who shows tremendous financial responsibility.”
Over the last 10 years, most of Rivers` energy has been poured into the Chicago Mental Health Foundation, which she founded in 1983.
In government filings, Rivers has listed some of the city`s most influential African-American civic leaders as members of the foundation`s board of directors, including former Chicago Police Supt. Fred Rice and South Side real estate investor William Gray.
But when told by a reporter that he has been listed as a board member, Rice said, ”That`s news to me.”
Rice said Rivers, who is a friend, had once asked him to serve on the board of a school she was starting, but ”then I never heard anything about it. I didn`t even know the name of the organization. I have never received any newsletter or communication about it.”
”I did not know I was a board member,” Gray said in an interview this week. Although he called Rivers a friend, Gray said, ”I`ve never heard of the Chicago Mental Health Foundation.”
Problems began to surface in September 1990, according to government records, when a DCFS review team inspected the teen program, which provided live-in services to pregnant wards of the state and teenage mothers.
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A report of the inspection said the girls often ran away because of ”the lack of stimulation” at the center, as well as the ”lack of consistent programming, a stark institutional setting, and the restrictive attitudes of the administration.”
The report added that ”the harsh and punitive attitudes of the chief administrators seemed to be entrenched and intractable.”
But in part because the program provided a critical service, DCFS continued to fund it for another year, and added funds for services to toddlers.
In January 1991, the city`s Department of Human Services, after giving more than $300,000, discontinued funding the foundation because of poor or non-existent financial records, government reports show.
And last August, HUD suspended two grants, totaling $5.3 million, to provide services to homeless people. At the time, $2.4 million of the money had already been disbursed.
According to HUD`s 83-page audit report, the agency was paying for services-such as vocational training, continuing education, support groups and day care-but the foundation was providing those services only minimally, if at all.
Homeless people who were supposed to be receiving vocational training told auditors that they were simply washing the facility`s windows and walls. There was no evidence in foundation files that residents were receiving continuing education, the audit said.
”In general, (the foundation) appears to have made minimal efforts to assist residents in finding permanent housing,” the audit said.
HUD also ”found no evidence” that residents were receiving day-care services for which it was paying.
The audit found that the foundation had issued 68 checks, totaling $37,478, to Campus Chicken-but there was only one invoice from the fast-food outlet, for $1,157.
According to the foundation`s grant application, residents were supposed to be organized into therapeutic support groups, called ”clusters.” But 13 residents polled by auditors said they did not belong to a cluster or a support group.
One ”commented that `cluster` groups would be a good idea,” the report said.