City of Asheville Diverts Funds Meant for the Poor - TribPapers

City of Asheville Diverts Funds Meant for the Poor

Photo by Giorgio Trovato.

Asheville – The City of Asheville diverted hundreds of thousands of taxpayer dollars intended for legal aid for the poor to a private group connected to Vice Mayor Sheneika Smith, according to WNC Citizens for Equality, a local watchdog group. The majority of the money then vanished into the hands of unidentified people as cash rewards.

The Funds

The leftover monies from a class action lawsuit were where the misdirected cash came from. Developers filed a lawsuit against the City of Asheville in 2018. The issue was development costs that the city had unfairly assessed developers in exchange for their use of public water. The city and the plaintiffs reached a resolution in 2019 in which the city agreed to pay the qualified claims $1.85 million. The fund has $949,185.12 in unclaimed assets after paying legal costs and valid claims.

Scan documents of Order Granting Approval of Settlement between Mayfair Partners, LLC & Ed Holland Builders, Inc against the City of Asheville. Documents submitted.
Scan documents of Order Granting Approval of Settlement between Mayfair Partners, LLC & Ed Holland Builders, Inc against the City of Asheville. Documents submitted.

At this time, state law mandated that the settlement proceeds be given to the NC State Bar and the Indigent Person’s Attorney Fund for legal assistance for the underprivileged (NCGS 1-267.10). Criminal defendants who are unable to afford an attorney on their own can get legal assistance through the Indigent Attorney Fund. The State Bar’s legal services program provides funding to nonprofit groups that assist the underprivileged in civil cases. These situations can entail assisting domestic abuse victims in getting protection orders, assisting renters in getting a landlord to make an apartment habitable, or assisting senior citizens in getting a refund from a dubious repairman. Without this legal assistance, many of these people would not have access to the judicial system.

Money Diverted from the Poor

On October 27, 2020, the City Council convened in secret session and sought to award the monies for their own “charitable” reasons rather than abiding by the law. The Council was informed by the city attorney, Brad Branham, that any “charitable group” might receive the funding. A portion of the money, according to Vice Mayor Gwen Wisler, should go to the Asheville City Schools Foundation for scholarships available primarily to “black and brown” children. (These monies eventually included a restriction that they could only be used by “black” students, and they were the focus of a federal civil rights case until the city agreed not to discriminate against students based on their color.)

Vice Mayor Shanika Smith Directs Funds to Her Own Group

Vice Mayor Wisler’s recommendation was followed by Councilwoman Shanika Smith’s request that “CoThinkk,” a neighborhood organization, get half of the funds. One of the organization’s original members is councilwoman Smith. The minutes of the private meeting don’t make it clear whether Councilwoman Smith told the rest of the Council about her connections to CoThinkk.

CoThinkk is not a Non-Profit Organization

According to the N.C. Secretary of State, neither CoThinkk nor any other legally recognized organization is registered as a non-profit. CoThinkk describes itself as a “giving circle” that is concerned about the welfare of communities of color in Asheville on their website. Since CoThinkk is not a formal company, its financing sources and donation policies are fully confidential. CoThinkk is exempt from the yearly reporting and financial precautions demanded of charities under North Carolina law since it is not a legally registered organization. On its website, CoThinkk advertises that donations are “totally unrestricted.”

Following CoThinkk’s selection by Councilwoman Smith as the beneficiary of the class action monies, the council decided to give the organization a gift of $474,592.56. A resolution adopted on April 13, 2021 authorized the donation, and contracts between the City and CoThinkk later formalized it.

Where the Money Went

After CoThinkk got the class action settlement money, a large portion of it vanished into the hands of unidentified people. A little over $136,000 of these money, according to CoThinkk’s report to City Council on April 12, 2022, were given to people as “self-care stipends.” The study does not define “self-care stipends” and CoThinkk does not explain how one meets the requirements. In addition, 36 anonymous applicants received an additional $32,400 in cash supplements (again, without any criterion for the cash payments being stated), and another $22,288.87 was paid to anonymous “community partners” for further “self-care packages” and “coaching opportunities.” The balance appears to have gone into hiring more CoThinkk employees, paying consultancy partners, and compensating Eagle Market for their fiscal sponsorship.

For its part, the city doesn’t seem to have demanded any more documentation of how these money were used. In accordance with regulations governing access to information, WNC Citizens for Equality sought from the city any documentation pertaining to the use of the monies. Following the city’s first denial of the request, WNC Citizens took legal action to force the production of the requested documents. The City then turned over all of the records it claimed connected to CoThinkk’s use of the funds. None of the records indicated that the city was looking into or otherwise interested in learning who got the cash contributions.

The Bottom Line

The real tragedy in this case is not that Asheville City gave away hundreds of thousands of dollars to a dubious organization, but rather that it diverted funds intended for the most vulnerable individuals. After abuse and fraud, legal aid groups provide the impoverished what is perhaps their only recourse. Innocent defendants receive critical legal assistance from charitable defense organizations. These folks were meant to gain from the money at risk in this situation. The money was instead sent by the city to Councilwoman Smith’s private organization, which then distributed thousands of dollars to unnamed recipients. The city appears to have abandoned its oversight and fiduciary responsibilities to the public, which only adds insult to injury in its own information.

In order to recover these monies for the poor and the destitute, WNC Citizens for Equality is considering bringing legal action against the city. It encourages anybody who would be eligible for legal assistance (SSI, Medicaid, food stamp beneficiaries, or poor criminal defendants) to get in touch with them to discuss potential legal action against the city. Contacting us personally is always welcome if you need further details.

Publisher’s Note: Further details at