Shelter Operator Cited for Nepotism Still Gets Millions in City Funds

When New York City faced criticism last year for its lax oversight of homeless shelter contracts, officials pledged to root out nepotism and financial misconduct by those who might seek to cash in on the $2 billion system.

Soon after, in February 2021, the officials raised concerns about one nonprofit shelter operator, African American Planning Commission, whose chief executive had secured an unusually high salary — more than $500,000 a year — while the group paid his brother about $245,000 annually and his sister-in-law sat on the board.

Last fall, the officials gave the group a choice: Cut ties with the chief executive’s brother or risk losing tens of millions of dollars in city contracts. The shelter operator agreed to fall in line.

But in fact, the brother remained on the job, and the group remained on the city contractor rolls — collecting $24 million this fiscal year alone, a New York Times examination found. Drawing on records and interviews, the review also showed that the company had made a number of payments to consulting firms tied to the chief executive, Matthew Okebiyi, and his family.

The episode underscores the hands-off approach that New York City has taken to overseeing homeless shelter operators even as it has acknowledged corruption within the system and has promised to crack down.

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After saying last year that they would conduct an audit of the more than 60 organizations that operate shelters in New York, city officials have declined to answer even basic questions about the inquiry.

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Officials also have not released certain records related to African American Planning Commission, including the organization’s line-item budgets and lists of the subcontractors and vendors it has paid over the years.

Founded in 1996 by Mr. Okebiyi, the group operates nine shelters in the city, including two for victims of domestic violence, and collected more than $173 million in city money since July 2017.

Mr. Okebiyi said in a statement that his organization had always operated with its clients’ best interests at heart. He said the nonprofit had drawn up detailed plans to comply with city contracting rules and he noted that his brother, Raymond Okebiyi, would stop working as the organization’s finance chief on April 1.

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African American Planning Commission is just one of about five dozen groups that city officials rely on — compelled by a court order to house every homeless person — to operate shelters in the five boroughs. Last year, the city paid the groups more than $2.6 billion.

City officials have placed nine of those providers on an internal watch list, citing possible conflicts of interest, questionable spending and financial problems. They said they plan to add Mr. Okebiyi’s group to the list but had not finalized the paperwork. All of the organizations have continued to receive city funding.

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For years, Mr. Okebiyi’s group has been a steady source of employment for members of his family, often operating in ways that could run afoul of city rules.

Initially started by Mr. Okebiyi to operate a Brooklyn domestic violence shelter, African American Planning Commission hired Raymond Okebiyi as an accountant in 2003. By 2020, records show, he had become chief financial officer — reporting to his brother and earning more than $247,000 a year.

At one point, the group also hired an outside firm owned by Raymond Okebiyi, Okayson Consultants, for technology services, according to corporate filings and city records. Mr. Okebiyi said the nonprofit used his brother’s firm off-and-on from 2007 to 2020, but he declined to say how much the consulting firm had been paid.

The group also brought on Raymond Okebiyi’s wife, Onyekwere Onwumere, as a board member and in 2020, hired Mr. Okebiyi’s nephew as a worker at one of its shelters. Mr. Okebiyi said that his nephew no longer worked for the group, and that he had had no role in hiring him.

Mr. Okebiyi’s relatives benefited in other ways. From 2012 to 2016, the group paid an athletic shoe company run by another of Mr. Okebiyi’s brothers, Michael, to provide “tech support,” records and interviews show. Mr. Okebiyi said the payments to the company totaled “less than $20,000 a year.”

African American Planning Commission even hired a firm founded by Mr. Okebiyi himself, Lafayette Consultants, also for “tech consulting,” and made payments to the business until 2019, according to city records.

It was unclear whether Mr. Okebiyi disclosed his ownership of the company before the nonprofit chose it as a contractor, as city rules require. {snip}

In 2017, as the number of homeless people in the city was swelling, the group sought to expand from domestic violence services to running other types of shelters.

It won lucrative new contracts and grew rapidly, with Mr. Okebiyi’s salary rising apace. He was earning more than $532,000 a year by 2019, tax filings show — one of the highest salaries paid to any nonprofit shelter executive in New York that year.

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But Raymond Okebiyi has remained on the nonprofit’s payroll, records and interviews show.

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