BUILD's Caldwell defends spending that provoked AG complaint: "Yeah, maybe it's wrong, according to the budget, or whatever. But is it right for the people? Yeah." (Updated with bitter dispute between BUILD leaders and former CFO)

Originally written Nov. 15. Updated Nov. 16 with retort from Lance Woodward and a response to Woodward from Daisy James. Updated Nov. 17 with response from James Caldwell to Woodward. Updated Nov. 25 with a response from Woodward to Caldwell.

I'll observe that the bitter personal and professional accusations may be impossible to resolve from the outside, though it's clear that Caldwell does acknowledge that he spent BUILD funds to be helpful to people rather than within the ambit of programs. Beyond that, the failure of developer Forest City Ratner to hire an independent compliance monitor to oversee the Atlantic Yards Community Benefits Agreement deprives us of an outside overseer.

An article in The Next American City expands on the story of BUILD (Brooklyn United for Innovative Local Development), which is closing its doors today. An audit commissioned by funder Forest City Ratner found that CEO James Caldwell, now President emeritus, was not misappropriating funds.

However, the main accusation by former subordinate Woodward was that Caldwell was misallocating funds, apparently using them to play neighborhood benefactor even though they were beyond the purview of the grants--when, at the time, BUILD was behind on its taxes.

And Caldwell cops to that, sort of:

Caldwell said they might buy subway fare, food or clothes for job interviewees. In other cases, he said they brought neighborhood children to a Pennsylvania amusement park or to see the Nets play in the team’s old home of New Jersey. In other cases, Caldwell would write landlords checks for tenants who otherwise wouldn’t be able to pay rent. Through Ratner, BUILD helped cover rent for a Brooklyn man that was injured in an arson fire that killed his wife and two sons.
“I tend to get the business in trouble — a non-profit organization in trouble — by making decisions like that,” Caldwell said. “But, you know, is it wrong? Yeah, maybe its wrong, according to the budget, or whatever. But is it right for the people? Yeah.”
Still, he denied accusations of misallocating money.
“By buying people MetroCards because they’re in our training program and they have no way to get there? I don’t think so,” he said. “I helped somebody pay the rent or they’ll get put out? I don’t think so. But I say, I can see people bringing allegations against me if I had a big mansion, a pocket full of money, this and that.”

I don't think he denied misallocating money. I think he denied misappropriating it for personal use.

My comment:

This is just a wee bit more troubling than portrayed. Why is BUILD going out of business? Because its funders decided not to fund it any more--a sign they didn't trust it to work responsibly.
Here's a link to coverage of the lawsuit filed by 7 participants in the pre-apprenticeship training program. Caldwell can say he didn't promise anyone jobs, but the plaintiffs sound pretty emphatic.
Also, as Lance Woodward's letter to the AG indicated, a consultant's assessment indicated that BUILD had little capacity to fill the role played by Chief Operating Officer Marie Louis, who died last year.
Caldwell has not been accused of trying to enrich himself, but he even admits here he's acted irresponsibly. (The article doesn't mention the report that he also spent money on clothing for a subordinate, and there's no explanation for the Nets tickets. How about sharing the audit?)
Caldwell, as he well knows, has invited criticism by saying--as he did in his goodbye message linked from the article--that "I still believe that Bruce Ratner is an Angel sent from God."
Does that sound like someone prepared to *negotiate* a Community Benefits Agreement (DBA)?
Missing from this article is recognition of a fundamental criticism of the CBA, and how it was used to help the Atlantic Yards developer.
Consider 2005 City Council testimony by Bettina Damiani of Good Jobs NY:
"The BAY [Brooklyn Atlantic Yards] project is the first project we know of in New York City in which the developer has advertised that he seeks to participate in a Community Benefits Agreement (CBA). As a sponsored project of Good Jobs First, which provided support for the CBAs negotiated in California and continues to act as a clearinghouse for information on CBAs, we feel it is important to draw the Council’s attention to several major differences between CBAs as they have been used in other parts of the country and the series of negotiations that FCRC is calling a CBA. Perhaps the most striking is that elsewhere CBAs are negotiated by one broad coalition of groups that would otherwise oppose a project, a coalition that includes labor and community organizations representing a variety of interests. The coalition hammers out its points of unity in advance and then each member holds out on settling on its particular issue until the issues of the other members are addressed. This way, the bargaining power of each group is used for the benefit of the coalition as a whole. In the BAY case, several groups, all of which have publicly supported the project already, have each engaged in what seem to be separate negotiations on particular issues."

Criticism from an ex-BUILD staffer, and a critical response to him

Former BUILD CFO Lance Woodward, who sent the letter to the Attorney General after he was fired in a dispute with Caldwell, posted a long comment, below, critical of BUILD. See bottom for some rather pointed and personal criticisms.

Woodward's posted comment:

Mission control...we have a problem...or shall I say many. The real reason that BUILD is closing is a result of complete incompetence in leadership. No organizational missions have been fulfilled...NONE! The responses from James Caldwell and Daisy James are nothing more than smoke and mirrors meant to cover up their ineptitude in running and growing a mission oriented not-for-profit organization. Below I would like to address a few issues related to this article and BUILD's demise.

First, I ask who has been a beneficiary of BUILD's purported mission as stated in this article, “honored its mission and purpose to foster economic self-sufficiency and prosperity amongst socio-economically vulnerable communities." As one who has held many roles within BUILD since 2004, I am completely unaware of anyone, let alone a community, that has truly overcame their socio-economic status as a result of any efforts from BUILD and their ties to the Atlantic Yards project. In contrast, thousands of individuals came through the BUILD doors who were either already a part of the construction trades or desired to enter the construction trades and were led to believe that BUILD was the gateway for those opportunities. Although that was the original plan, things did not go so well when Caldwell started having unnecessary pissing contests with the very individuals who were ultimately responsible for the hiring in the construction trades at Atlantic Yards. I personally had to forewarn a number of individuals not to use the BUILD name when seeking employment in construction as it became increasingly evident that Caldwell's politics had usurped the organization's objectives. So for all of those thousands of individuals that invested tens of thousands of hours trying to secure their piece of the pie and gain economic self-sufficiency, all of that was in vain...false hopes and false promises; poverty pimping at its best.

Similarly, the small business component was also a debacle. As far as I know, the only minority company that benefited as a result of any efforts by Caldwell and BUILD was an already well established contracting company from Philadelphia. None of the many local contractors that came through BUILD benefited as a result of Caldwell's BUILD. Likewise, much of that can be attributed to the aforementioned pissing contests.

The Atlantic Yards project has yet to enter the second development phase. There is perhaps another twenty years of construction within the 22 acre project site. According to the CBA, BUILD should be working on another pre-apprenticeship program to coincide with this second development phase-- not closing their doors. There is also the development of a local High School described in the thirty-year term Community Benefits Agreement that has yet to be initiated, another element of the CBA that BUILD has oversight on. With respect to the arena jobs, Caldwell abrogated that responsibility in the earlier part of this year when he effectively handed off the organization's exclusive workforce development oversight, as outlined in the CBA, to Work Force One....the very element that thousands of local individuals fought for....and certainly one of the many legacies of the late Marie Louis. To many this was the nail in the organization's coffin. As far as the purported 175 individuals that are employed as part time employees at the Barclay's Center Arena as a result of BUILD's efforts (I would love to see the proof!), it is a far cry from the 500-600 positions that were negotiated...mission accomplished...give me a break!

Although there were many early struggles, the tools needed to become successful were provided by the developer. With free rent and utilities in addition to funding there is no reason, other than incompetence, that BUILD should not have grown to be a significant entity, not only in Brooklyn, but throughout New York City to help address the many challenges that low-income individuals face in overcoming barriers to unemployment. The late and great Robert F. Kennedy recognized the need to tie both public and private funding together to address the socioeconomic conditions through the creation of the Bedford-Stuyvesant Restoration Corporation. BUILD found itself in a similar position but failed to realize its potential through Caldwell's ego and incompetence.

Regarding the misappropriated funds there can be no question that buying your relatively well paid employee Daisy James seven-hundred dollars worth of clothes at Macy's on the BUILD credit card constitutes misappropriation. [Note: the report said $576.97. I missed that until James reminded me. She also points out that, when the clothes were purchased, she was earning a modest hourly wage as a trainer. Woodward still considers her relatively well paid.]

The same goes for the Nets season tickets, unquestionable misappropriation for a not-for-profit organization. As far as the misallocated funds, yes Caldwell is a nice guy and has helped many by using BUILD's resources-- at the expense of the organization! If the taxes were up to date and all mission objectives were being met some of the expenses might be alright. But, taxes were far behind and I am quite sure at this point that Caldwell did not know what his own organization's objectives were. Paying people's rent certainly was not one of them...that might sound harsh but when you are a 501c organization with extremely limited resources every penny counts and should go towards meeting the organization's mission. BUILD's role was to empower people so that they could pay their own rent...not to pay peoples rent.

Finally, with respect to being a "sellout" or "puppet of the developer", Caldwell did not have to take on that role, he did it voluntarily. By failing to respect "organization" and instead placing him and his ego before all, he created a situation where he had no leverage with the developer. The organization had thousands of supporters and volunteers throughout the years. So much talent came through the doors in the early years yet were ultimately shunned or kept in their place so as not to be a threat to him via his paranoia that everyone was out to get him. Individuals possessing leadership skills or alternative ideas were generally the first to go. You can see evidence of this in his failure to establish a functional board and instead placing loyalty to him as the top requisite to being a board member. This is evident in all the boards that he has put together. Imagine for an instance if BUILD would have had a large board comprised of a diverse group of local leaders, business owners and community stake holders...now we are talking leverage. Instead he forced himself into being that sellout.

It is very unfortunate that BUILD will be closing its doors for good on Friday. I was ultimately hoping that he would have resigned and that the board would have made the necessary changes so that the organization could have gone on to properly fulfill its Community Benefits Agreement obligations for the community.

There will be those that will blame myself for the closing of BUILD, for those individuals let me say this. I tried in so many different ways to protect Caldwell and the organization. Unfortunately, whatever I tried to contribute (and I was not the only one) was disregarded or he would do the exact opposite of what was suggested. In the end, after he made the decision to place the equally inept Daisy James at the top of the organization which ultimately led to the ouster of the complete staff that the highly competent Marie Louis had put together over the preceding six years, I knew it was time to "turn the light on" and let all who wished to see what was really going on behind the facade that Caldwell had created.

Although I could, and will soon, write many pages on this matter. I will keep it limited to what I have written so far. I can assure you though that just as Caldwell said that going forward the mission will be to get BUILD's story out there, I too will work on that endeavor. Unlike his story though, I can assure you that what I put out there is not all self aggrandizing bull****, there will be no revisionist history and proper credit will be given to those who really made the best of BUILD including most importantly the late Marie Louis whose contributions really were the foundation of the organization.

James responds to Woodward

Note that Daisy James of BUILD called me to point out that Woodward's comment exaggerates the amount spent on the clothes, and misstates that she was relatively well paid, since at the time her earnings were in the bottom half of those paid to BUILD staffers.

She added, in writing, "The only thing 'inept' in this entire situation would be Mr. Woodward's ability to pass a sobriety test."

Woodward responds to James

Woodward responded, in writing: "I stand corrected, the actual amount spent on Daisy's clothes was $576.97. As far as her being at the bottom half of those paid at BUILD at the time she is incorrect on that. For some time, Caldwell and I went back and forth regarding giving her a raise. Our employees were paid based upon what was provided for in the budget. Although she had started at $12 per hour by that time of the shopping trip I had given in to Caldwell and Daisy was earning $15 per hour.... As far as the sobriety test comment, that does not surprise me coming from her. I will say this though, that I have a number of employees names and numbers, including close to a dozen interns that I worked closely with on an everyday basis that will substantiate that there is no basis to her claims."

Caldwell responds to Woodward

Caldwell responded, in writing [posted 10 pm Nov. 17] :

I am an Army Veteran who proudly served his country for 6 years, along with other Americans that have served to protect your freedoms, including the freedom of speech.
And while everyone is entitled to say what they want to say, that doesn’t make it the truth. So I take great offense to Mr. Woodward’s comments about being a “poverty pimp”. And I say shame on you Norman Oder for posting such coded, racist language. [Note:  According to the Next American City article, an audit showed that Caldwell was not trying to enrich himself.]
In response to Mr. Woodward, it would seem that if he is in need of finding anyone in any of our vulnerable communities who has benefited from BUILD's mission of economic self-sufficiency and prosperity - he need look no further than himself.
In 2005 Mr. Woodward was living in a homeless shelter and was rescued by BUILD, and in many ways was the first person to benefit from the work that we do. And what did we do for Mr. Woodward? The organization provided him with clothing, food, a place for him to stay and I personally paid for his cell phone. But more importantly, BUILD gave him a job.
Also, let it be noted that Mr. Woodward left BUILD in 2005 for approximately 7 months for a construction job. Where he was fired. For insubordination. Again, BUILD provided him with employment. He left again in 2010 to pursue a job with Homeland Safety (a construction company) and was again terminated. For insubordination.
The fact is that Mr. Woodward’s behavior is nothing more than a selfish act of ingratitude, a smug indifference to the work that BUILD does – work that very few organizations have done for our communities. He oughta be ashamed of himself.
So I pose this question to Mr. Woodward, a so-called CFO who does not even possess his own bank account. When was the last time you filed your state or federal taxes? When was the last time you served your country? Right? Because we all know who the real pimps are.
And finally. For the record, Marie Louis never cared for Mr. Woodward because he wouldn’t follow instructions; so, please let her rest in peace.
Amen.
James E. Caldwell

Woodward responds

Woodward responded, in writing [posted 8 pm Nov. 25]:

More Smoke and Mirrors from Caldwell. I certainly have a tremendous amount of respect for those who have served our country though it is unclear as to what Caldwell's Veteran status has to do with anything here other than perhaps trying to possibly seek a free pass on his alleged wrongdoings.

As Caldwell clearly stated, "...everyone is entitled to say what they want to say, that doesn’t make it the truth." First, given the possibility of a libel or slander suit, I would not make any statements that I can't backup or that are knowingly false. It appears here that in attempting to undermine myself and the statements that I made, he has in fact made a number of incorrect allegations against myself.

First, BUILD did not rescue me and did not buy me clothes or food (I have the credit card statements going back to 2005 for all BUILD credit card holders if this needs to be verified).

I can thank my friend the late Marie Louis, a BUILD officer, for providing me with the opportunity to rent an apartment from her over the course of the past six years. Although the phone that I used was in Caldwell's name, I paid the bill on it for the majority of the term. There was a relatively short period where Caldwell paid the bill. Prior to him terminating me I had started repaying him for that short period but following the termination was unable to continue.

Yes, BUILD did provide an opportunity for employment to me but for the majority of the first two years that I worked, I worked full time and was not compensated. In addition to this, while working at BUILD, for five years beginning in January 2005 and ending in December of 2010, I produced the Council Update, a monthly newsletter that promoted Caldwell and the 77th Precinct Community Council; again unpaid for a part-time job occupying the equivalent of one to two weeks of full-time work per month.

As far as my employment history, he just might eat his words. In late 2007, not 2005, I went to work as an Assistant Project Manager for a concrete company. In March of 2008, after approximately four months, not seven, I quit over the ethics of the Project Manager and Owner who were withholding wages and threatening employees with violence. The breaking point for me, and only insubordination, came when I was asked to lead a crew to steal a large amount of equipment from another contractor on the job site. I can think of three people who are, or have been associated with the AY project that have direct knowledge that I quit and was not fired.

Next, although I did leave BUILD once again to work for another organization, where it can be said that I forced my way out, I never worked for Homeland Safety-- which is not a construction company. Having never worked at Homeland Safety makes it quite difficult for them to fire me for insubordination. Caldwell is clearly trying to portray me as an individual with a history of insubordination in an attempt to justify his reasoning in wrongfully terminating me.

After each of these periods, Caldwell requested that I come back to BUILD which I did; and it was Caldwell who promoted me to Chief Financial Officer. Very unusual for someone who is making such accusations against me.

I still have no clue as to what prior military experience has to do with any of this and I have certainly always adequately paid my taxes.

Regarding Marie Louis, I have never said anything against her and have only promoted her unparalleled importance to the BUILD organization. The only other time that I brought up Marie's name outside of this blog and the letter to the Attorney General was in privately expressing my dissatisfaction that Marie Louis was not recognized at the arena opening and that at the time I made the complaint, Marie's family had not been invited to opening events. Unlike Caldwell, I certainly would never suggest her feelings or attitudes regarding anything particularly when she is unfortunately no longer here to speak for herself. I will continue to promote her and her legacy when the opportunities arise though.

Finally, if it were not for what I believe to be Caldwell's continuous slander against me in the streets and in his response against myself, I certainly would never have sought to air this out in public.

Having known him for eight years and witnessed how he has dealt with others that have fallen out of favor with him, I am sure he will continue to spread these falsehoods in an attempt to make himself look good. Let the facts speak for themselves.