Atlanta, Illinois, library accused of faux lease deal to earn state grant
The Atlanta, Illinois, Public Library District used a contract it had no intention of fulfilling to qualify for a grant from the Illinois secretary of state, the Edgar County Watchdogs (ECW) allege.
“It appears they were authorizing the contract for the sole purpose of scamming the Secretary of State out of funds that could have been given to another library who met the grant requirements,” ECW co-founder John Kraft wrote on the group’s Illinois Leaks website. “From the vast amount of records we have reviewed, the Library never intended it to be acted on, no payments were ever intended to be made towards the contract, and no payments were ever made – even though they did get the grant.”
In late 2014, the district was preparing to apply for the secretary of state’s Live and Learn Construction Grant Program, which helps libraries improve, expand and develop their facilities. Libraries applying for the grants must provide a deed of ownership or proof of long-term occupancy in the form of a lease or similar agreement for a period of at least 20 years.
To fulfil this requirement, the Atlanta library's board signed a contract for the purchase of the Union Hall Building, owned by Teleologic, a company founded by library trustee Bill Thomas, according to the ECW. This contract, if legitimate, would qualify the library for the grant program, and the district did eventually win grant funding.
The ECW, however, alleges that the district never intended to honor the contract. For one thing, Thomas signed a contract for the deed of the building with a third party, John Yates, on the same day he signed the contract to purchase with the district. Further, prior to signing the contract, the board held a special library meeting and the minutes indicate that the contract to purchase would be voided if the district did not win grant funding.
The contract itself dictated that payments from the district would begin on Feb. 1, 2015, and that the contract would be automatically cancelled if the district failed to make payments for 60 days at any point during the payment schedule. Kraft wrote that the district never made any payments for the contract, making it void on April 3, 2015.
Meeting minutes for the time surrounding that 60-day period do not include any discussion about the contract payments or the contract’s subsequent cancellation. Further, the district did not inform the secretary of state that the contract had been cancelled and received its grant several weeks after the April 3, 2015, cancellation date.
“Please remember the Deed or proof of long-term occupancy was a requirement of the grant funds obtained from the State,” Kraft wrote. “State grant funds were used without the library having any contractual or otherwise claim to the building the funds were used on.”
Yates purchased the building and presented a lease to the board of trustees in July 2016. The district made four lease payments of $1,000 each to Yates, beginning in July and extending to cover the lease through October. In December 2016, the district agreed to a new lease, this time with Thomas directly, establishing a long-term lease of 20 years with a monthly rate of $1,000. The ECW noted that the 20-year lease is actually set to expire 20 years from the district’s first lease payment to Yates.
Additionally, the ECW reported that a February 2016 agreement between Yates and Thomas reverted ownership back to Thomas well before Yates received the first payment, suggesting that the payments to Yates perhaps actually went to Thomas.
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100 Race St.
Atlanta, IL - 61723