A trashcan with the Department of Small and Local Business Development's logo on it
The Department of Small and Local Business Development is facing a variety of questions about its management of the Main Streets program. Credit: Alex Koma

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Once a Green Teamer through and through, Jackson Carnes makes for an unlikely whistleblower.

Yet that is exactly the position Carnes finds himself in following his tumultuous three-month tenure running the Upper Georgia Avenue Main Street program. He told the D.C. Council he has extensive evidence of  “unethical and potentially fraudulent activity” on the part of the people running the city-funded program, and repeatedly raised the issue with District officials. But all he’s gotten for his trouble is a stiff arm and a pink slip.

Carnes, a former staffer for former Ward 4 Councilmember Brandon Todd and a veteran of Mayor Muriel Bowser’s 2014 campaign, isn’t alone. A series of businesses and nonprofits that work with the city’s Main Street organizations, which are designed to support small companies and invigorate D.C.’s commercial corridors, have grown increasingly concerned about the agency overseeing the program: the Department of Small and Local Business Development.

They believe officials at DSLBD have been playing favorites as they hand out these Main Street grants, passing over some applicants in favor of the same handful of bidders that are friendly with agency leaders. And when those organizations have been accused of mismanagement, by Carnes and others, the agency has ignored those concerns and continued to hand out grant money, the agency’s critics say.

The Office of the Inspector General launched an investigation into the matter in December, which is still ongoing, and several councilmembers have begun asking probing questions. DSLBD Executive Director Kristi Whitfield faced some of those queries in a D.C. Council oversight hearing last month, where she insisted the allegations from Carnes and others were without merit. The agency adds in an email to Loose Lips that it is “participating fully” with the OIG’s review.

The whole mess involves complex questions of nonprofit stewardship and grant management, but at bottom, people concerned about DSLBD worry that this dysfunction means small businesses aren’t getting help at a time when they desperately need it.

“It feels like the administration only sees economic development as redevelopment, with big, shiny projects like The Wharf,” says Brianne Dornbush, the head of District Bridges, a nonprofit that has won six Main Street grants. “There’s a real lack of focus on supports for small businesses and that is really harming our economic growth as a city.”

Mysterious Money Moves

So how does one of these Main Streets work, exactly? In short, if a community successfully organizes and convinces DSLBD that it needs the program for its local businesses, the agency will round up funding and award a grant for a third party to manage. Each Main Street entity essentially functions as a neighborhood advocacy organization that can connect businesses with city resources, manage local events, or simply run marketing for the corridor.

The Center for Nonprofit Advancement, headed by CEO Glen O’Gilvie, has helmed the Upper Georgia Avenue Main Street (covering the Takoma, Brightwood, and Shepherd Park neighborhoods) since winning the DSLBD grant in 2019. The broader organization provides support services and hires an executive director specifically for the Main Street program. That’s where Carnes comes in. He took over as executive director of the Upper Georgia Avenue Main Street in July 2021 after Todd lost his Council seat.

Right away, Carnes says he began noticing irregularities with how O’Gilvie managed things (all of which he documented and then reported directly to DSLBD, per emails he forwarded to Loose Lips). Often, O’Gilvie would make financial decisions without consulting Carnes or the Main Street’s volunteer board, moving money around and charging the group’s grant for services it never received. O’Gilvie, who did not respond to requests for comment for this article, subsequently denied all this at the Council hearing.

In one instance, O’Gilvie billed nearly $7,000 that he said paid for technical assistance services for several local businesses. Carnes says he contacted those businesses, and they had no memory of ever receiving those services. Crucially, Carnes found that the money was set to go to MJ Consulting, which has a close relationship with O’Gilvie and CNA. O’Gilvie described the company as the center’s “grant writer,” according to Carnes. MJ Consulting is also listed on CNA’s website as an “industry expert” nonprofits should consider hiring.

O’Gilvie ultimately agreed to remove the charge from the Main Street, though a subsequent DSLBD investigation determined the incident amounted to “serious mismanagement” of funds.

In another episode that troubled Carnes, O’Gilvie placed an order for $11,000 in street pole banners under Carnes’ name, even though Carnes never approved the purchase. Carnes also discovered that CNA funneled donations meant for the Main Street into its own accounts, never to be seen again. He believes this happened with at least two separate donations totaling roughly $300, though there could be more. Carnes provided LL with documents corroborating these claims, all of which he also forwarded to DSLBD.

“They completely took advantage of the situation,” Carnes says.

Carnes and the full Main Street board wrote an Oct. 1 letter to O’Gilvie laying out these concerns, saying that “there is mismanagement of [Main Street] funds to the point where it has affected our ability to provide the expected amount of support to [Upper Georgia Avenue] businesses.” The board and Carnes forwarded that letter to DSLBD and began discussing these issues directly with officials there on Oct. 14.

On Oct. 15, O’Gilvie fired Carnes and dissolved the board. The chair of the Main Street’s board, Monica Goletiani, also has not responded to LL’s repeated requests for comment on the whole dispute.

“We all loved Jackson, he was doing a great job,” says Margery Goldberg, who runs the Zenith Gallery in Shepherd Park. “We were all mystified that he was fired, until we found out he was raising these complaints.”

Agency Inaction

Carnes believes DSLBD has a clear understanding of these problems, but it won’t act. The agency investigated after repeated messages from Carnes and issued its own Dec. 30 memo on the subject, noting a series of “deficiencies, weaknesses and shortcomings” in the center’s management structure. 

But DSLBD stopped short of finding any fraud in these instances. In particular, the agency argued that the center’s decision to mix Main Street funds into its own bank account was not “fraudulent, malfeasant, unethical or even mismanagement,” as they were sufficiently segregated (an assertion Carnes disputes). 

Ultimately, DSLBD decided to put the center on a “performance improvement plan” and will give it “reasonable time to correct identified administrative/managerial issues,” the agency writes in an email. That will allow O’Gilvie and the center to continue running the Main Street, managing a roughly $150,000 grant in the process.

Whitfield said during a Feb. 9 Council oversight hearing that Upper Georgia Avenue Main Street’s board has since been reconstituted and would soon look to add new members to become “more broadly representative of the community” and make improvements, though it’s unclear who sits on the board now.

O’Gilvie also testified that he hired a new interim director for the Upper Georgia Avenue Main Street, but did not identify them. A spokesperson for Ward 4 Councilmember Janeese Lewis George said the center told her office that Jessica Mailander, formerly a program manager for a different Main Street, has taken over. 

O’Gilvie used the hearing to call Carnes a “disgruntled” employee and lament that “politics and emotion have attempted to get in the way of high impact community service.” O’Gilvie doubled down in a budget forum held by Lewis George on Feb. 12, saying that his organization will need to “rebuild community trust tainted by slander,” according to Zoom chat screenshots sent to LL.

Carnes finds it “baffling” that DSLBD would accept O’Gilvie’s explanations and continue to let him manage grant funds. And Dornbush expects that if her organization acted like O’Gilvie’s, it would lose its Main Street grants entirely, rather than getting a slap on the wrist.

“If you’re friends with people at the agency, you can get away with things we’d never get away with,” she says.

Playing Favorites?

Dornbush’s group, District Bridges, actually competed against CNA and the Shepherd Park Citizens Association for the Upper Georgia Avenue grant two years ago. Many business owners believed District Bridges was better qualified than CNA, including members of the citizens association, who testified as much during the Feb. 9 hearing.

Yet Dornbush says she lost out to O’Gilvie because, DSLBD told her, CNA is a more prolific fundraiser. She found that hard to believe, considering CNA has recorded negative net assets on its federal tax forms for the past nine years (District Bridges has done so three times over the same time period).

Instead, Dornbush began to develop the impression that the agency was deliberately snubbing her organization in favor of O’Gilvie’s, simply because officials were friendly with him. In addition to running Main Street programs for years, O’Gilvie has also been featured repeatedly as a speaker on panels convened by the Mayor’s Office on Volunteerism and Partnership. 

It didn’t help that Dornbush and her staff spent months raising concerns about DSLBD’s oversight of another Main Street in Woodley Park before the Upper Georgia Avenue competition started.

The nonprofit Friends of Woodley Park used to manage that Main Street grant, but got into hot water after discovering its former executive director had mismanaged close to $100,000 in funding. The group fired him in October 2019 and brought in District Bridges to run a forensic audit and track down any misspent money.

That’s when Dornbush began discovering clear missteps in DSLBD’s practices, including many instances where officials should have easily found financial mismanagement in Woodley Park over a yearlong period of time.

“They should’ve known it was fishy,” Dornbush says.

Losing Woodley Park

After District Bridges finished the audit, the organization helped the Friends of Woodley Park reorganize to continue managing the Main Street, and did so without incident through the summer of 2021. By then, DSLBD said it would hold another competition for the Main Street grant, so Friends of Woodley Park proposed a merger with District Bridges to continue managing it.

The proposal attracted support from local businesses (45 signed a letter in support) as well as Ward 3 Councilmember Mary Cheh. Yet, once again, DSLBD rejected District Bridges, this time in favor of the nonprofit Historic Dupont Circle Main Streets. The outcome struck Dornbush as frustrating but predictable, considering that the head of the Dupont group, Bill McLeod, is close friends with several DSLBD officials. McLeod, who denied these allegations in an email, used to work on the Barracks Row Main Street with Cristina Amoruso, who coordinates the Main Streets program for DSLBD.

“It was utter buffoonery, frankly,” says David DeSantis, a local realtor and the board chair of Friends of Woodley Park. “What egregious thing did we do that caused you to pull a grant away from the organization that had been working in that community for three years and give it to somebody who had had absolutely no contact with anybody in Woodley Park, whatsoever?”

For his part, McLeod says that “I am an experienced grant writer and Main Street director,” so it’s no shock that he would win such a grant. During the Council hearing, Whitfield stressed that an independent review panel selected McLeod’s group and said she understands “there is a disappointment whenever there are grant funds that you do not win.”

“District Bridges has $900,000 in grant awards from DSLBD today,” Whitfield said. “There’s no reason to think that we have an interest in not awarding grant awards to District Bridges.”

Yet Dornbush notes that her organization hasn’t secured any new grants from DSLBD since it began pointing out its failings in Woodley Park. She can’t help but feel targeted by the agency, even though she made those recommendations in good faith to help the city spend its money wisely.

In fact, Dornbush feels so discouraged by DSLBD’s actions that she doesn’t intend to apply for additional Main Street grants any time soon. She believes her organization has done good work supporting small businesses and keeping them afloat during the demands of COVID, but she would rather turn her attention elsewhere if it’s going to cause such headaches.

“Until there is new leadership at that agency, everything will be the same,” she says.