State begins process to recover $1 million grant

SPRINGFIELD -- Gov. Rod Blagojevich's administration is demanding repayment of a $1 million grant it has admitted it gave to a private school by mistake.

The Department of Commerce and Economic Opportunity wrote officials at the Loop Lab School requesting it return the money, which Blagojevich acknowledged went to the school through a "bureaucratic mistake," because the Chicago school didn't comply with terms of the grant.

The school, which lost rented space when fire destroyed the Pilgrim Baptist Church in January 2006, used the money to buy a downtown business condo.

But the school remains shuttered with city zoning code violations and has no prospects for opening soon, the letter said.

DCEO also accused Loop Lab officials of not alerting the state to the executive director's felony conviction or a civil rights judgment against the school, not submitting proper paperwork and spending $52,000 on "operational, financial and legal services" not related to the grant's aims.

DCEO spokeswoman Ashley Cross would not disclose Wednesday how the $52,000 was spent and could not immediately explain why some of the missing paperwork wasn't required at the time Loop Lab filled out a DCEO application for the grant.

Chandra Gill, the school's executive director, did not return a call left on her cell phone and no one returned a message left Wednesday at the school. A number for a lawyer to whom the letter was also addressed could not be located.

School authorities have 35 days to request a hearing on the matter if they do not believe they should repay the money.

Blagojevich announced he would help rebuild Pilgrim Baptist with a $1 million grant. But the money went to Loop Lab instead.

Loop Lab received the grant, despite not disclosing that a state agency had punished it for sexual harassment of a staff member, the letter sent Tuesday said.

Nor did it report that Gill was sentenced to 18 months probation for getting in a fight with an Urbana police officer during a high school basketball game in 2002. She got a hastily arranged pardon from Blagojevich in 2007.

The school did not submit a proper financial statement to the attorney general's office, as required, and when it did, the document showed it had $243 in cash and a $32,000 debt at the start of 2006, just six days before the fire.

DCEO has not explained why it gave the school the grant when it was on shaky financial ground.

Among the documents DCEO says Loop Lab didn't submit are a financial net worth statement showing "the financial resources needed to operate the school" and the documents required by the attorney general.

Cross could not say whether DCEO should have required submission of those forms at the time the school filled out an application for the grant. The Associated Press reported in April that a survey Loop Lab filled out to get the grant did not mention finances, but a document submitted to DCEO before it got the money shows the school had assets of $105,000 at the end of 2003, $77,000 a year later, but just $243 at the end of 2005.