Breaking News
More () »

A look at what happened to $10M of federal rescue money intended to help minority communities and small businesses

The Fulton County Commission targeted $10 million in federal rescue money for minority-owned banks to assist minority small business and entrepreneurs. Did they?

ATLANTA — As the COVID-19 pandemic raged, the federal government offered cities and counties significant funds through the American Rescue Plan Act to run vaccination clinics, keep businesses and jobs afloat, and to keep people safe.

Last June, the Fulton County Commission passed a resolution, earmarking $10 million of that federal rescue money for minority-owned banks with the intent of providing a financial lifeline to small minority businesses and entrepreneurs.

However, 11Alive recently learned those federal funds were re-allocated to keep the COVID clinics at Mercedes Benz Stadium; the county's federal rescue funds ran out. 

So, the county instead deposited a total of two $5 million interest-bearing CDs from its general fund into the African American-owned Unity National Bank and the Asian-owned Loyal Trust Bank --- a deposit which falls within the Fulton County investment guidelines, 

The banks said they put the CDs into their general funds, adding that the county placed no restrictions on the how the funds should be invested. But Fulton County Commission Chairman Robb Pitts emphasized the resolution's intent just last month at a commission meeting, well after the general CDs were deposited.

"I am very proud of the 7-0 vote that we had to help small and minority-owned business. we should be proud of it," Pitts previously said.

The move brings some questions to mind.

Although the CDs did not require it, did the money help small business? Should there be transparency?

Donald Kettl, the former dean and now professor emeritus of public policy at the University of Maryland School of Public Policy, said yes. He also added that where the money came from can be problematic.

"No matter what the source of the funds, there still is the underlying responsibility to ensure accountability then transparency,' Kettl said.

"Putting money into a bank without a chain of accountability for the use of the funds is something that certainly would disturb most taxpayers," he added.

Professor of accounting at the Goizueta Business School at Emory, Usha Rackliffe, agreed.

"I understand there was a resolution and I understand that plans can change, and if they did change then certainly one must expect the commission to perhaps say publicly, correct the public record to say indeed what indeed transpired," Rackliffe said.

Nearly a year after the commission first announced the funding, and eight months after 11Alive started looking into the money, we still have no paper trail on where the funds went and how the money is being used. With the CDs now in the banks general funds, transparency is that much harder.

11Alive will continue asking questions and holding the powerful accountable. 11Alive reached out to Fulton County Commission Chairman Robb Pitts multiple times to ask for an interview. He declined to go on camera.

Before You Leave, Check This Out