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    Scandal may close Veterans Village shelter today

    Shelter officials said it will close unless funds, halted by an investigation, are restored.

    By JEFF TESTERMAN, Times Staff Writer
    © St. Petersburg Times
    published February 28, 2002

    TAMPA -- Veterans Village, a homeless shelter once touted as a national model for veterans transitional housing, is scheduled to close its doors to vets today because of a widening federal investigation.

    THAP, the Tampa-Hillsborough Action Plan, notified the U.S. Department of Veterans Affairs last week that it intends to end sponsorship of the Veterans Village shelter today if the VA continued to withhold federal grant dollars from the nonprofit organization.

    The VA cut off $19-a-day funding per veteran in October after the Inspector General's Office for the VA began a criminal investigation into Chester M. Luney, who held dual positions with the VA and THAP. The VA is looking into possible misappropriation of grant money and falsification of federal documents by Luney.

    "I'm sure it's tough for them to stay open," said Roger Casey, who oversees the homeless veterans grant program at the James A. Haley VA Medical Center in Tampa. "But we have an obligation to see the investigation is complete before we release other funds."

    THAP's decision to stop housing homeless vets has local VA officials scurrying to find new shelter for as many as 14 veterans.

    It also has VA officials in Washington trying to determine if THAP has defaulted on contractual obligations and must pay back some of the $415,337 it obtained in grant funds to provide housing and services at the 12-unit complex at 1911 137th Ave. E.

    Arthur Rosenblatt, chief psychologist at Haley Medical Center, said the VA believes it has beds for the uprooted vets. Some are at the Agency for Community Treatment Services, a nonprofit that provides transitional housing for alcoholics and addicts in Tampa.

    "We have made plans to make sure no veterans are put out on the street," Rosenblatt said.

    The question of recovering federal funds from THAP remains unresolved, especially if THAP decides to operate Veterans Village as a conventional apartment complex.

    "THAP purchased those units under a federal grant, so to use them for something else would be open to scrutiny by the government," Rosenblatt said. "It could be a violation of grant authority."

    Phil Budahn, a spokesman for the VA's general counsel's office in Washington, said the question of "recoupment" would likely remain open until "the investigation runs its course."

    The inspector general's inquiry began in October after the St. Petersburg Times disclosed that Luney, an $80,279-a-year psychologist for the VA, wrote grant applications that funneled federal money to THAP, where he was a part-time executive being paid $78,000 annually.

    Luney abruptly resigned his VA post the same day the Times sought records regarding awards of grants to THAP's homeless vets program.

    Records show Luney, the VA liaison for the Veterans Village shelter, wrote glowing inspection reports about THAP's apartments, consistently giving the program high marks.

    But veterans who lived at Veterans Village told the Times that Luney's inspection reports were filled with falsehoods. Rent collection was improper, apartment units were in disrepair, resident files were missing and mandated counseling services were nonexistent, the veterans said.

    An emergency inspection by the VA confirmed the veterans complaints.

    Luney resigned his job at THAP in December, after the VA froze $1.2-million in grants THAP had intended to use for homeless programs in Tampa, Orlando and Palm Bay.

    Luney also is the subject of a federal grand jury investigation involving former Tampa housing chief Steve LaBrake, who oversaw millions of dollars in grants to THAP.

    Investigators want to know if undue influence was involved in the building of a 4,200-square-foot home in South Tampa by LaBrake and his girlfriend and former aide, Lynne McCarter. Luney provided personal favors and committed THAP resources to help enable the couple to build the home, now listed for sale for $650,000.

    Officials at THAP did not return phone calls from the Times.

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