Lansing seeks receivership for Jackson Johnson’s nonprofit

MONDAY, Feb. 3 — The city of Lansing has asked a judge to put into receivership One Church One Family, the nonprofit formerly headed by Joan Jackson Johnson, who was suspended as director of the human relations department over alleged conflicts of interest. 

The city made the motion in 30th Circuit Court to “safeguard” thousands of dollars in grant funding and ensure services for the homeless continue, records state. 

State law allows judges to appoint a receiver over nonprofit organizations and their assets after they’ve essentially been abandoned by their leadership. Those assets — which in this case would include nine homes in Lansing — can be returned “whenever it appears to be the best interest” of the parties involved, according to the statute. 

But where those assets will end up remains uncertain. After Jackson Johnson resigned from the organization last year, Schor said city officials haven’t been able to find anyone willing to take responsibility for the nonprofit. And botched records filed with the state are making it difficult for city officials to follow thousands in city funds. 

“It’s surprising, I would say that,” Schor explained to City Pulse. “We’re still trying to figure it out.” 

Court records contend One Church One Family has failed to provide any records of how it spent nearly $250,000 in grant funding and is operating without a registered agent or any legitimate board of directors — leaving no choice but for a local judge to appoint someone to take control over the nonprofit. 

That person, if appointed, would also be tasked with ensuring homelessness prevention services continue for dozens of local families, including those housed at nine Lansing homes owned and operated by One Church One Family. The case has been assigned to Judge Clinton Canady. No hearings have yet been scheduled. 

“Because of the failure of the defendant to comply with the contract and provide documentation of grand fund use, unless a receiver is appointed to take possession, custody and control of the assets of the defendant, the city will suffer irrevocable loss and irreparable harm,” according to a complaint filed by the city on Friday afternoon. 

A recent forensic audit report pointed to mismanaged funds, conflicting interests and grant-funded nepotism within Lansing’s Human Relations and Community Services Department after at least $1.38 million in city funding had been funneled into various nonprofit groups in which Jackson Johnson was either directly involved or had ties to her immediate family. 

Records show One Church One Family, which helps the homeless, received the bulk of the cash — nearly $500,000 — while Jackson Johnson served as Lansing’s human relations director and as the nonprofit’s president, secretary and treasurer. Her daughter, Nikki Johnson, was also listed in records as one of the directors of One Church One Family, among other nonprofit groups, while the city funding flowed. 

Those allegedly conflicting interests pushed city officials to put Jackson Johnson on paid leave last month while Attorney General Dana Nessel’s office continues to review the findings for possible criminal missteps. But as the probe continues, city officials are now exploring whether anyone other than Jackson Johnson had been involved. 

And by all accounts, it appears One Church One Family has operated largely as a one-woman show. 

Five of the six members of Lansing’s Human Relations and Community Services Board — an entirely advisory and volunteer body which helped direct Jackson Johnson decide where to distribute grant funding to help the homeless community — have been listed in newly filed state records as the directors of One Church One Family. 

Schor said those details only surfaced as city officials continued to investigate the situation last week. 

On the surface, those records appear to point to more conflicting interests over an entity that played a role in both distributing and receiving city funding. But it appears none of them were actually willingly involved in the the local nonprofit at all, indicating Jackson Johnson may have single-handedly directed the entire operation. 

And without clear leadership — including any state-registered agent or a formal board of directors — the city is demanding a court-ordered audit of the nonprofit’s financials to ensure that the thousands of dollars in grant funding previously sent to the nonprofit was ultimately spent as intended to help local homeless families. 

“I’ve never been to a board meeting or had anything to do with the operation of One Church One Family,” said Mark Eagle, an HRCS board member and, according to state records, the treasurer of Jackson Johnson’s nonprofit. “We were all a bit confused. We’re reaching out to the AG and providing them with information.” 

Board members Julie Rowe and Chad Guerrant also dispute the validity of state records that list them as directors of One Church One Family. Neither had been asked nor agreed to accept those leadership roles. Eagle said Jackson Johnson had requested he be listed on nonprofit paperwork, but he never consented to the listing. 

“Joan also told me that she needed me on this bank account for One Church One Family, but we never came to terms with anything,” Eagle said. “I never agreed to anything. We all seem to be in this same predicament here.” 

After city officials confronted Jackson Johnson about her alleged conflict of interests, she reportedly resigned from One Church One Family at the end of last year. But paperwork subsequently filed with the state again lists her as the registered agent of the nonprofit, along with an apparently fraudulent roster of nonprofit directors. 

The new state registration records — filed last month by a former Lansing Housing Commission director, Patricia Baines-Lake, are admittedly inaccurate, Baines Lake said. She she only sent them in at Jackson Johnson’s explicit request, but now plans to file additional paperwork in the near future to fix the mistake, she told City Pulse. 

In the meantime, the city of Lansing hopes to have the issue resolved in a courtroom. One Church One Family breached its contract with the city by failing to provide required documentation, financial reports, inventories or any accounting of the income generated through the program. A receiver might help sort out the uncertainties. 

By demanding reports and a full-fledged audit of One Church One Family’s financials, the city also hopes to keep its community services operational — including the lease of nine homes for at-risk families — and prevent the waste of grant funding and “otherwise safeguard the interests of the city” and other parties, records state. 

City officials — including Schor and City Attorney Jim Smiertka — declined to comment on the recent litigation. 

Baines Lake’s involvement with One Church One Family isn’t entirely clear. Although her name is absent from state records, she was also listed as a director of the nonprofit in the latest batch of federal IRS filings alongside former city planning director Bob Johnson and the city’s financial empowerment manager, Velma Kyser. 

Both Baines-Lake and Kyser have also disputed those records, claiming they didn’t hold any leadership titles with the operation of the nonprofit at all. Baines-Lake declined to elaborate on the inaccurate records. Johnson, Ronald Embry and Abby Frazier — other board members listed as directors — couldn’t be reached. 

Jackson Johnson also couldn’t be reached. She stopped returning calls after the AG opened a file on her office. 

“I’m surprised,” Kyser added. “My name shouldn’t be on any of that paperwork at all. I’m not involved with it.” 

Aside from Jackson Johnson, only Ingham County Treasurer Eric Schertzing has recognized any personal involvement with the nonprofit in recent years. He said he left the organization in 2013, noting concerns over its bookkeeping. But even before then, One Church One Family has largely been a “one-woman show,” he said. 

“I was certainly on the board, but even when I was the president, this was all Joan Jackson Johnson,” Schertzing said. “She was in charge of this whole thing the entire time. I didn’t really see any separation between this organization and the city of Lansing. To me, it was all just sort of wrapped together to address homelessness.” 

Schertzing said Baines-Lake was also “in the trenches” with Jackson Johnson, helping orchestrate the operation. But after concerns were raised over how records were being kept, Schertzing said he decided it was best to resign from the nonprofit. Besides, homelessness prevention initiatives weren’t really in his wheelhouse, he added. 

“Joan is very much a take-charge type of person, but I just think there just needed to be some more resources dedicated to dotting the Is and crossing the Ts,” Schertzing said. “If this money from the state and the city got mingled together, that obviously can become a problem, and that’s part of the reason I decided to step aside.” 

Baines-Lake also has a personal history with financial woes tied to publicly provided funding. She served as the director of the Lansing Housing Commission in 2016 when the U.S. Housing and Urban Development Department designated the commission as a “troubled” organization and later demanded it get its finances in order.  

A state audit report in 2015 found the commission may have improperly received hundreds of thousands of dollars. It also found Baines-Lake had taken oversight over the Section 8 program because there was no manager but “did not provide adequate oversight,” according to the since-disputed report. 

The Michigan Nonprofit Corporations Act makes it a misdemeanor to “knowingly make or file or assist in the making or filing of a false or fraudulent report.” Those who violate that law by fraudulently listing supposed board members against their will can be subjected to a fine up to $1,000 for each violation, the law states. 

Additionally, the law grants the AG the authority to bring court action to dissolve a nonprofit corporation if it engaged in certain other misconduct, including procuring its organization through fraud and “repeatedly, willfully and materially” exceeding its legal authority or conducting its affairs “in an unlawful manner.” 

“We have not received a complaint,” according to a state licensing spokesman. “However, we understand from recent news reports that the Department of Attorney General may be looking into the situation.” 

Nonprofits registered with the IRS (like One Church One Family) are also required to maintain bylaws, hold elections and produce minutes for its board-level dealings to maintain tax-exempt status. Without those procedures in place, the corporation can lose that designation and face additional federal consequences. 

“I think there are a lot of questions that still need to be answered, but in terms of the legalities, I don’t know. If it raises to it, it’s something where the state will have to make a determination,” Schor said. “All of this came up after the audit was done. These are new issues that are certainly concerning. I don’t know how someone is put on a board without their agreement, but we need answers to that. We just don’t have them available yet.” 

In the meantime, two city contracts that were initially slated to provide at least another $250,000 to One Church One Family later this year have been put on pause. That grant funding — designated to provide rapid rehousing for homeless families — will likely head to another service-oriented agency, Schor said. 

But the nine homes owned by One Church One Family still exist independently from city grant funding. That money just helped at-risk tenants pay the rent, Schor said. And without any clear leadership from the nonprofit in Jackson Johnson’s absence, their future operation could be in jeopardy without a court-appointed receiver. 

So far, others haven’t come forward with a willingness to take responsibility for the properties. 

“The grant money is still going to serve the people. It’s just a matter of what agency gets it,” Schor added. “There is a timeline to make sure landlords get the dollars they expect. We’ll want to get this taken care of pretty soon.” 

Visit lansingcitypulse.com for previous and continued coverage as the investigation continues to unfold.