By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
Dallas Police Sergeant Preston Gilstrap, recent former president of the Black Police Association of Dallas, has made serious allegations of financial wrongdoing against his own organization in reports he has taken to the FBI, the Internal Revenue Service, the Texas Attorney General's Office and the Dallas County District Attorney's Office.
He provided me with a binder six inches deep containing bank statements and other corporate records to back up his accusations. In a week of trying, I was unable to persuade officers of the BPA to talk to me on the record or provide any documentation to refute Gilstrap's characterizations. I did finally receive a call from an attorney. More on that in a moment. And, yes, part of the problem here is that this is an issue within law enforcement. We're entitled to wonder whether law enforcement may want to sweep this under the blue rug.
Gilstrap tells me the Dallas County district attorney and the Texas attorney general have already declined to investigate. He says he doesn't know what the IRS is up to. He says he has been interviewed more than once by an FBI agent and has presented the FBI with evidence similar to what he has given me.
When I called them, the FBI and the IRS both declined to comment, which is their standard policy for all questions about investigations.
At the very least, it seems like somebody in the organizational structure of the BPA should speak to these charges. They shouldn't be allowed to just stonewall it forever. When you look at some of this, I think you will agree that you and I would not get away with a stonewall in similar circumstances.
Here is Gilstrap's version of the story. Two years ago, Gilstrap, then a former president of the BPA, starts asking questions about the group's finances. He gets no answers. He appeals to the general membership, and in June 2010 he is elected president.
The BPA, formerly called the Texas Police Officers Association, has organizational roots back to the 1950s with a long, proud history of activism on behalf of its members. Gilstrap tells me the membership-at-large takes that legacy seriously. They want him to be provided with the answers he is seeking about the group's money.
It's enough to worry about. The BPA is a professional organization representing 557 African-American police officers in the Dallas Police Department, with a monthly income from dues that varies between $15,000 and $18,000. Gilstrap wants to see audited annual financial statements showing how that money is being spent.
After his election, 53 days pass before he assumes office, because the sitting board of directors throws up all kinds of challenges to his election, none of which hold any water. Gilstrap finally takes office, and he immediately demands to see the files with the organization's financial statements.
He is told there are no files. From 2005 to 2010 the BPA has almost nothing on paper to document the expenditure of that 17-grand-a-month income stream.
Gilstrap figures he'll have to go look in all of the organization's desktop and laptop computers for the data, but when he looks in the computers, he finds a void.
"The computers were all cleaned off," he says. "There were no records in the files, and now it's getting crazy, right?"
Gilstrap, a 40-year Dallas Police Department veteran with broad experience in several areas of police work, assembles a special audit committee and charges them with reconstructing the missing financial records from 2005 to the date he took office.
The committee never comes up with any credible audited financial statements, but they do come up with other stuff that puts a chill down Gilstrap's spine. For years the organization has been handing out debit cards to its officers like they were gimme caps. Gilstrap finds thousands of dollars in expenditures for which there are no receipts or other supporting documentation.
He gave me a copy of the bank statements. I see debit card payments consistently running between one and three grand a month to hotels, airlines, florists, Walmart, Paypal, Office Depot. There's even a lump-sum payment of $160 to Dunkin Donuts, perhaps fulfilling an unfortunate police stereotype.
Mainly it's just money, money, money flowing through this pipeline of debit cards every month for years out into a great sea of unaccounted cash.
At one point, Gilstrap warns the board that practices like these may imperil their status as a tax-exempt 501(c)(3) organization. They tell him not to worry: For most of the time in question they had forgotten to file for that status anyway.
As he pieces together information, Gilstrap finds the group did eventually apply for and gain tax-exempt status and then proceeded to make political contributions to Dallas County Commissioner John Wiley Price that were not permitted under the terms of the tax-exempt status.
Eventually his audit committee focuses on one area — cash expenditures through the debit cards for which there are no receipts or other supporting documentation. It's bad news.
"I will tell you that four individuals in the organization had spent more than $194,000 in debit card purchasing, and there was not one receipt. That was kind of staggering. Not one."
He fears the missing debit card money probably may be only a marker for other fast and furious financial practices. "We don't know what else they spent," he says. "The records are not there."
It's not just financial documents that are missing. The basic record-keeping required under state and federal law for tax-exempt organizations has not been done. At all.
"There are no minutes," he says. "There is no budget. There are no board resolutions. There are no subsequent references in the corporate records or any of these kinds of things."
Just as he was realizing the full extent of the problem, Gilstrap says his relationship with the board of directors went from already bad to much worse. The board threatened to file an internal affairs complaint against him in the police department for spreading rumors.
One member of the BPA board was an investigator within internal affairs — the part of the police department that looks into complaints against police officers. Gilstrap was concerned that the board was about to begin using the power and might of the police department to shut down his inquiry into the board's behavior.
"It got so bad that I finally had to stop the administrative inquiries and seek a more formalized investigation, because there was too much going on," he says.
"I solicited the help of our corporate attorneys to help us create some requests for proposals to hire a forensic accountant to determine if there were civil liabilities or criminal culpability."
At that point, however, Gilstrap already was nearing the end of his one-year term as president. He says he had promised himself he would serve only one term to try to straighten things out. At his next-to-last board meeting as president, he says it was clear that the forensic audit was not going to happen and that he was not going to accomplish anything more as president. So on October 11 of this year, he resigned his office.
Gilstrap concedes that some of the charges he makes against the organization probably have to do with people simply not knowing the law rather than out-and-out larceny. He provided me with photocopies of canceled checks that appear to be scholarship awards made to the children or close relatives of the people making the awards.
On the one hand, Gilstrap says the BPA officials handing out the scholarship money may have avoided certain pitfalls that trapped Congresswoman Eddie Bernice Johnson when The Dallas Morning News revealed in 2010 she was awarding scholarship money to her own staff's children in violation of the rules set up by the Congressional Black Caucus Foundation, which provided the money.
The BPA is clean on that score, Gilstrap says. They didn't have any rules. But he points out the IRS does have rules. Taking money out of the funds of a nonprofit and using that money to profit yourself is problematic, whether you call it a scholarship, a bonus or just a fistful of green.
I failed to persuade officers of the BPA to talk to me, but I did finally receive a call from Timothy A. Duffy, an attorney with Burleson, Pate & Gibson. He said he represents certain board members, whom he declined to name.
Duffy said Gilstrap's evidence has been presented to many law enforcement agencies without result because "there is no substance to the allegations of wrongdoing by any of these directors or officers."
Duffy said many of the expenditures shown in the bank records Gilstrap has assembled reflect "the tradition of the organization to supply, for example, flowers to family members of officers who have passed" and to give gift cards to honor and support "members who have been promoted."
The bank records I looked at did not seem to reflect gift cards but debit cards with full authority to draw on the group's bank accounts.
The checking around I was able to do led me to believe that the officers of this group are very solidly respected in the police department.
I'm also aware that financial horror stories are, if not commonplace, at least not rare in nonprofits at all levels and in all areas of society. People who aren't business people find themselves sitting on an income stream, and they don't understand that it will turn into a rattlesnake if they don't keep good count of it.
The problem in this case is that I think I already hear the rattle. Don't you?