A Southern California non-profit organization receiving government support, which previously sparked controversy for paying its Chief Executive Officer (CEO) $1.65 million over two years, has been additionally revealed to have provided a luxury apartment and a BMW vehicle. In particular, it was found that the board of directors approved the related expenditures even though internal employees had raised suspicions of inappropriate fund execution years ago, escalating criticism over poor oversight.
The Los Angeles Times reported on the 13th that the ‘1736 Family Crisis Center’ (1736 FCC), a non-profit operating domestic violence shelter and homeless support programs, provided CEO Carol Adelkopf with a Santa Monica luxury apartment carrying a monthly rent of $6,500 along with a BMW vehicle for use in Hawaii.
The organization is an agency supported by the federal government, LA city, and county, having received at least $25 million since 2021 through the Los Angeles Homeless Services Authority (LAHSA) alone.
Adelkopf has managed the Southern California-based organization while residing in Hawaii for over 10 years. The apartment in question serves as her lodging whenever she visits LA, situated in a luxury condo just two blocks from the beach. The organization covered not only the rent but also cleaning fees, internet, and TV usage charges, spending approximately $7,200 per month.
The board of directors approved the apartment lease in 2018 and processed the related expenses as business travel costs. While it was confirmed that rent continued to be paid the following year, it remains unclear until precisely when the expenses were covered. The organization explained that since the costs were processed as business expenses, no separate income tax was levied on Adelkopf.
It was revealed that the organization covered the lease fees as well as fuel, insurance, and repair costs for the BMW vehicle Adelkopf uses in Hawaii. Notably, it is known that neither shelters nor support recipients operated by this organization exist in Hawaii.
A greater issue is that internal staff members had already raised suspicions regarding such fund execution years prior. According to the Los Angeles Times, in 2019, three senior staff members raised issues with the board and the California Attorney General’s office, stating that the various perks provided to the CEO constituted inappropriate use of organization funds.
The employees subsequently filed lawsuits claiming they faced retaliation and wrongful termination. However, the organization stated that two separate external investigations concluded that Adelkopf committed no wrongdoing. Furthermore, they explained that the apartment was a business facility replacing hotel accommodations and was necessary for Adelkopf’s personal security, while the BMW vehicle was a benefit included in the CEO’s compensation package from long ago.
Nevertheless, non-profit oversight experts are questioning whether proper checks and balances and monitoring of management were exercised, given that the high salary and various perks were all provided with board approval. Especially since related expenditures were approved despite internal objections raised regarding personal benefits for management at a publicly funded non-profit, accountability issues for the board are being raised.
