Fraud conviction raises questions about Spokane’s new warming shelter operator

The treasurer of a nonprofit that recently won a $740,000 city contract to operate a warming shelter for homeless people in Spokane spent time in federal prison after pleading guilty to mail fraud in 2013.

Shift Washington, a conservative website known for targeting Democrats, including Spokane City Council members, called attention to Jason Green’s felony conviction in a blog post on the eve of Election Day.

Green, 42, is the treasurer and sits on the board of Jewels Helping Hands, a nonprofit that the City Council selected last week to operate a warming shelter with space for 120 adults at 527 S. Cannon St. The vote to approve the contract was 6-1, with conservative Councilman Mike Fagan voting alone in opposition.

The Shift Washington blog post, which does not list an author, calls out City Council President Ben Stuckart and Councilman Breean Beggs, who campaigned for the positions of mayor and council president, respectively. Both voted to approve the contract.

Green also is an accountant for chef Adam Hegsted’s Eat Good Group, which has ownership stakes in popular Spokane restaurants including the Gilded Unicorn, Incrediburger & Eggs, Yards Bruncheon and the Wandering Table.

Paul d’Orazi, the company’s general manager, said he and Hegsted selected Green over about 20 other job applicants last year.

“Jason obviously had some stuff in his past that was a red flag, but he was very forthright about wanting to move forward,” d’Orazi said. “He’s a brilliant guy, and I think hiring him was one of the best decisions this company has made.”

Green’s conviction stems from a kickback scheme in 2009 and 2010 in which he and a friend collected hundreds of thousands of dollars from U.S. Foodservice (now U.S. Foods), a major food distributor. At the time, Green was the company’s vice president of finance, overseeing its headquarters in Fife, a suburb of Tacoma. His friend owned companies that purported to do work for U.S. Foodservice.

“What I did was wrong,” Green wrote in a Facebook post Tuesday, after Shift Washington published its blog post. “I lost everything for what I did, and most importantly I lost time with my kids and family. I work with complete transparency because I do not want to be doubted, and I know my past will always haunt me.”

Green’s nonprofit, which he recently founded with his partner, Julie Garcia, was selected as the city’s warming shelter operator over the Salvation Army, which said it could not be operational as quickly.

Mayor David Condon’s administration favored the two organizations and allowed the City Council to make the final selection. Meanwhile, solutions to homelessness have become a topic of intense debate in city political contests, with some leaders racing to set up warming centers before winter comes.

Jewels Helping Hands has backing from the Smith-Barbieri Progressive Fund. Garcia said her organization picked up keys to the Cannon Street building Tuesday morning and expects to open it as a warming center by Friday.

A statement from Condon’s office said news of Green’s conviction “has caused serious concern,” but the warming center will open.

“The city is evaluating that information and will determine the best path forward as it relates to our contract with that provider. The city must be a responsible steward of the dollars citizens entrust with us,” the mayor’s office said. “Our top priority remains the full implementation of our winter plan for those experiencing homelessness.”

Stuckart said Green told him about his criminal conviction about six months ago, though Green said he couldn’t recall that conversation.

“Jason is a formerly incarcerated individual,” Stuckart said. “Served his time and not a concern.”

Stuckart added that Green, Garcia and other volunteers provided more than 200 meals each night to homeless people last winter.

“He’s done more in the last year for our houseless population than anybody else, and they’ll do great at managing a warming shelter,” Stuckart said.

Nadine Woodward, who ran against Stuckart in the mayor’s race, said she found news of Green’s conviction “quite shocking” and did not know who was behind the Shift Washington story.

Woodward said she didn’t trust Green to manage so much taxpayer money, and she questioned why the city didn’t select a more experienced provider like the Guardians Foundation or the Salvation Army, both of which operated warming centers last winter.

“I think that contract absolutely should be pulled,” Woodward said. “I would find somebody else who might be able to run it. I would seriously consider taking another look at that contract.”

Even if Woodward’s lead in Tuesday’s election holds, she wouldn’t take office until Jan. 1, almost two months from the time the center will have opened.

The city’s contract with Jewels Helping Hands requires the organization to keep records of all its expenditures. It also gives the city authority to monitor and audit the nonprofit’s finances “to ensure actual expenditures remain consistent with the spirit and intent of this agreement.”

Beggs and Councilwoman Karen Stratton, who has been running for re-election, said they had not known about Green’s conviction but had no immediate concerns, citing their belief in second chances.

In a statement circulated by his campaign manager, Andy Rathbun, who has run against Stratton, said the councilwoman “must explain to taxpayers whether she knowingly voted to trust a convicted embezzler with our taxpayer money, or she failed to conduct a background check on this contract seeker.”

The city does not require contractors to disclose criminal records for all of their board members and executive leaders. The city also has adopted a so-called “ban the box” policy that prohibits criminal records from being considered in hiring decisions for most city jobs.

Stratton said Tuesday, “Basically, if somebody has done the time after making past mistakes, I’m willing to go forward.”

She added in an email, “It’s sad it has come to this, that candidates are more intent on digging up garbage on people rather than discussing issues openly and honestly. I have no facts from the Jason Green story. I would rather hear from him before judging him.”

Beggs named several local activists who have made differences despite past criminal records. He said the focus should be on helping the homeless.

“I would like to hear Jason explain his journey back into society,” Beggs said. “I’ve watched him and Julie devote so many hours to helping people. I believe they’re the real deal.”

Cindy Wendle, who has faced off against Beggs in the race for City Council president, called for an examination of how the contract was awarded to Jewels Helping Hands to ensure the council did its due diligence.

“It’s not the people, it’s the process that concerns me,” Wendle said. “I think more information is needed on how we got here. This is about transparency and disclosure. It’s not about the people or the vendor.”

Green began working as an accountant for U.S. Foodservice in 2001. In 2005, he became the company’s vice president of finance, a position he held through 2010.

According to court records, Green started the kickback scheme with Jimmie Dillingham, a gambling buddy and bowling teammate.

Dillingham owned a parking lot striping company that had done legitimate work for U.S. Foodservice. But prosecutors alleged that in July 2009, he and Green began submitting phony invoices to U.S. Foodservice for work the striping company never performed.

Later that year, the two men created a new company, Day and Night Security, and Green gave it a contract to protect a U.S. Foodservice warehouse in Clark County, canceling a contract with a legitimate security company.

Green began approving phony invoices for the security company, too, prosecutors alleged. On Tuesday, Green denied that the security company failed to perform the work outlined in its contract, but he acknowledged receiving kickbacks over two years that totaled about $106,000. He said the security company received about $350,000 in payments from U.S. Foodservice.

Green and Dillingham gambled away much of their illicit earnings at a casino in Auburn, Washington, according to court records.

U.S. Foodservice noticed shortfalls in various accounts, and Green resigned in December 2010 when confronted about fraudulent entries in the books, according to court records. The company then notified law enforcement.

The FBI and the U.S. Postal Inspection Service investigated, and Green and Dillingham were indicted by grand juries.

Green pleaded guilty to one count of felony mail fraud in U.S. District Court in Tacoma in November 2013. In January 2015, he was sentenced to 30 months in prison and ordered to pay nearly $500,000 in restitution.

Green said the charge was mail fraud because checks were sent from a U.S. Foodservice processing center in Arizona, and he pleaded guilty in hopes of receiving a lighter sentence.

Shift Washington is owned by Matthew Lundh and Josh Amato, according to state nonprofit filings. They helped establish the digital advertising firm Sermo Digital in Mercer Island, Washington, and were tied to the Republican presidential campaign of former Ohio Gov. John Kasich.

Shift Washington has previously posted articles critical of Stratton, Stuckart and prominent Democrats including Gov. Jay Inslee and Attorney General Bob Ferguson. Several previous articles have accused Stuckart of ethics violations, though the group has not filed any formal complaints. As with the blog post about Green, those pieces listed no author.

Shift Washington also has run afoul of the state’s campaign finance disclosure laws. In April 2018, the Washington Public Disclosure Commission fined the group $2,500 for failing to report expenses tied to social media posts opposing a statewide initiative on a carbon tax.

After his sentencing, Green said, he checked himself into a federal prison camp in Sheridan, Oregon, and was later transferred to a facility in SeaTac to be closer to family. He said he went through a divorce and worked for 40 cents an hour while in prison.

He moved to Spokane in October 2016, spent six months at a residential re-entry center and worked odd jobs to support his children, including delivering pizza part-time. He started working for Eat Good Group in January 2018.

Reporters Kip Hill and Adam Shanks contributed to this story.