Report: Jackson Johnson mismanaged city funds 

MONDAY, Jan. 27 — The head of the city of Lansing’s Department of Human Relations and Community Services “performed transactions in a manner that lacked transparency and may have misrepresented her actions, potentially to conceal her violations,” an independent audit found. 

The audit also said the director, Joan Jackson Johnson, may have personally benefitted. Jackson Johnson was placed on leave this month while the state Attorney General’s Office investigates. 

After the U.S. Department of Housing and Urban Development notified city officials about a series of alleged “legal concerns” tied to various “issues with contracts” signed by Jackson Johnson, an audit was conducted to probe into her department. The findings of that audit were released to City Pulse today. 

Among its findings: 

1. Jackson Johnson’s department — under her explicit direction — paid at least $1.38 million to various community service entities in which she had direct conflicts of interests from 2017 to 2019. The nonprofit One Church One Family received at least $498,000 in funding. Loaves and Fishes, a short-term homeless shelter headed up by her husband, Vernon Johnson, received another $303,525. 2
2. Jackson Johnson served in various volunteer positions that appear to have violated the city’s ordinance on conflicts of interests and a state law that guides contracts with publicly funded entities. That law makes a violation a felony that is punishable by up to a year in prison and a fine of up to $1,000.  
3. In addition to Jackson Johnson’s role as president of the nonprofit One Church One Family, Jackson Johnson also served in other positions and maintained close relationships with entities that receive thousands of dollars in direct funding and federal grant distribution through the city of Lansing.  
4. Notably, Jackson Johnson’s husband and daughter were named in the report as being tied to leadership positions at various entities — like Loaves and Fishes — that receive cash through the city of Lansing.  
5. Jackson Johnson was made aware of these concerns yet “performed transactions in a manner that lacked transparency and may have misrepresented her actions, potentially to conceal her violations,” according to the report. Those included at least two instances where Jackson Johnson reaped a personal benefit.  
6. Jackson Johnson had also allowed a volunteer with her nonprofit to use office space, a city email and cell phone without explicit approval from Lansing’s Department of Human Resources. The report noted that Jackson Johnson had also sought permission for them to use a car but had her request denied. 
7. Additionally, the report found the funding disbursement process in the Department of Human Relations and Community Services to be set up to give Jackson Johnson near-total autonomy — with “limited oversight/approval” — over how about $1.6 million in annual general fund dollars were spent.  

A redacted version of the report produced through the recent forensic audit was released by the city of Lansing earlier this afternoon, fulfilling a request that City Pulse filed under Michigan’s Freedom of Information Act last week. A reporter is still compiling additional details from the new report for additional updates to this story. 

Jackson Johnson, who served as the city’s director of human relations and community services since 2006, remains on paid administrative leave this week while the Michigan Attorney General’s Office continues to review “issues with contracts” that, according to Mayor Andy Schor’s office, prompted her suspension on Jan. 9. 

Schor — in response to questions — said that city officials were notified by the U.S. Department of Housing and Urban Development of an alleged “legal concern” toward the end of last year that involved various “issues with contracts” signed by Jackson Johnson.  He has declined to elaborate further on what triggered the review.  

Additional records — obtained last week through the Michigan’s FOIA — helped shed some more light on Jackson Johnson’s purported conflict of interests given her role as both a top-level city administrator and as longtime president and chairwoman of the local nonprofit One Church One Family. State records show she served simultaneously as the organization’s president, treasurer and secretary while it received cash from the city. 

Jackson Johnson previously told City Pulse that city officials took issue with her role as the president of a nonprofit that regularly received financial support from city coffers, in this case with funding directly managed by her department. Jackson Johnson stopped returning calls to City Pulse after the AG’s office started its review. 

“There is nothing financial going on,” Jackson Johnson said  to City Pulse in an interview earlier this month. “I’ve been told there’s a conflict of interest with my position in different organizations. I was working on that. After a while, you have to think they’re on a witch hunt against me. I’m not sure I really understand anything.” 

Records show the city’s Department of Human Relations and Community Services — under Jackson Johnson’s direct oversight — contracted with One Church One Family at least six times since 2016, funneling more than $500,000 in federal grant money and general fund contributions to support homelessness prevention initiatives. 

During that time, state licensing records showed that Jackson Johnson had also served simultaneously as the president, secretary and treasurer of One Church One Family — essentially forming contracts with herself, teetering into a legal grey area in which she cashed several city-issued checks that carried her own signature. 

Those contracts also included a conflict of interest clause that stated that officers, employees or officials of the city who exercised “any function or responsibility” with administration of the contract shall not have any interest — either directly or indirectly — in the proceeds of city-allocated funding or distributions of grants.  

Jackson Johnson, as part of the contract, was also required to adhere to the Code of Federal Regulations, which states that an “organizational conflict” can arise when the recipient of grant funding is unable or potentially unable to separate themselves from their role in distributing those same funds. Knowingly false statements or representations related to the award of federal grant funding also carries a potential five-year prison sentence. 

The Lansing City Council had also approved each contract with One Church One Family. Each of the agreements also carry the signatures of first Mayor Virg Bernero and then Schor, who succeeded him in 2018.  

“Lansing has charter and ordinance language regarding conflict of interest, ethical conduct, and disclosure,” Schor said previously. “Every elected official and department director is informed of these laws and required to follow these laws. An ethics manual is distributed to officials and department directors at the time of hire.” 

Jackson Johnson resigned from One Church One Family last December after she said she was told by city officials to “divorce” herself from the organization given its financial ties to the city budget, she explained.  

Lansing’s charter also defines a conflict of interest as an avenue for city employees to derive “any income or benefit, directly or indirectly, from a contract with the city or from any city action.” Employees are asked to report conflicts on an annual basis. If one exists, employees are barred from mixing those related affairs.  

An affidavit filed by Jackson Johnson last year noted that she received no personal financial gain from her nonprofit and hasn’t generated more than $2,500 in annual income outside of her post with the city of Lansing. She also told City Pulse that she never collected payment through her connections to One Church One Family.  

Calls to the U.S. Department of Housing and Urban Development for additional details on the sorts of “legal concerns” Schor said were spotted last year within Jackson Johnson’s contracts were not returned to City Pulse.  

Visit lansingcitypulse.com for previous and continued coverage as the investigation continues to unfold.