Ex-CEO of Mpls. nonprofit pleads guilty to stealing funds

Updated 3:55 p.m. | Posted 10:22 a.m.

A former nonprofit executive indicted on charges he spent taxpayer grants on a personal car, exotic trips and perks for friends and relatives has changed his plea to guilty.

Bill Davis said "guilty, your honor" 16 times on Thursday for each count of misusing taxpayer money or conspiring to defraud Community Action of Minneapolis, the organization he led for 24 years.

The money was supposed to help low-income Minneapolis residents with heating costs, career assistance and other vital services.

"Improving people's lives was the mission of Community Action of Minneapolis," said U.S. Attorney Andrew Luger. "Instead, Bill Davis stole from those in need to line his own pockets. The evidence of fraud was overwhelming, and the defendant's guilty plea to all of the charges against him is a just result."

A sentencing date hasn't been set and there was no deal struck ahead of time between Davis and federal prosecutors.

Davis, 65, faces the possibility of decades in prison and steep fines. Federal Judge Patrick Schiltz told Davis he hasn't made up his mind on a punishment.

"No one can tell you right now what your sentence will be," Schiltz said, warning, "You're stuck with your guilty plea no matter what sentence you get."

Davis will remain free until sentencing.

Under oath, Davis answered a battery of questions about the extent of his crimes.

He admitted to using Community Action dollars to buy and deck out a car, to travel to the Bahamas with his girlfriend, to travel to an out-of-town wedding and to attend a Democratic Party function in Puerto Rico.

He also said he falsely claimed to be married to get health insurance through the agency for his then-fiancé.

Court documents are even more explicit about how Davis, a former Democratic National Convention delegate, misused money over several years. Investigators have said Davis may have taken upwards of $350,000 over the years for personal use but auditors documented far more overall misspending at the agency.

Davis spoke matter-of-factly about most of his crimes. His only hesitation in court came when he was questioned about payments made to his son, Jordan Davis, through an ice cream parlor run with funds from the nonprofit.

Jordan Davis had a managerial role for a time but stepped away to become a Minneapolis police officer.

But the younger Davis continued to receive payments — $140,000 over four years — as a consultant to the shop, though the extent of his actual work is in dispute.

He also faces charges related to those payments, including conspiracy with his father.

Bill Davis said it was his idea to keep paying Jordan. Under questioning, he said there "may have been a conversation" between the two about the arrangement but they didn't talk much about it.

Davis said he intervened at least once with Community Action fiscal staff to make sure the checks continued to Jordan.

After the hearing, Davis declined to speak to reporters. His lawyer, Susan Gaertner, said her client is sorry for what he did and decided "with a heavy heart" to take responsibility.

"My goal at sentencing is to make clear to the judge that these acts of using some CAM funds for personal expenses do not define Bill Davis," she said, adding she would emphasize "that he had a long career, that his passion was serving low-income families and that he deeply regrets the choices he made."

Jordan Davis will stand trial next week on a series of charges related to money he received through the nonprofit. He has pleaded not guilty and his attorney said Bill Davis' plea makes Jordan Davis' case stronger.

"If anything we feel more confident now," said that attorney, Fred Bruno, declining to say more.

The problems at Community Action became public in 2014 when a critical state audit was released, questioning spending and oversight. State agencies later moved to cut off public funding and the organization was raided and shut down.

Community Action had elected officials on its board, including U.S. Rep. Keith Ellison and state Sen. Jeff Hayden, both Minneapolis DFLers.

Federal authorities said Davis deceived the board about his spending, something Davis acknowledged Thursday in court.