California Democrat was anonymous officer at center of Fresno City audit, emails show
A cache of Fresno City records obtained by the Republican Party resolves a question left unanswered by an audit published last year scrutinizing the finances of a nonprofit organization formerly led by a Democratic congressman.
Rep. TJ Cox, D-Fresno, was the nonprofit executive who received a $50,000 transfer from the Central Valley Community Sports Foundation, according to the records. The city audit into the organization did not identify him at the time and left open the possibility that another executive at the nonprofit could have received the money.
The transfer, according to records in the cache, was actually a repayment for a loan that Cox provided to the nonprofit. The city audit was critical of how the foundation moved money from one of Cox’s businesses to his personal account.
The audit analyzed accounting practices for Central Valley Community Sports Foundation from Jan. 1, 2016 through July 31, 2018, when Cox was its director.
Cox led the nonprofit with Fresno developer Terance Frazier, and the organization received money through a city of Fresno contract to rehabilitate the troubled Granite Park in east-central Fresno.
Cox resigned from the organization in March 2019 after he was elected to Congress, according to his financial disclosures. Fresno City Manager Wilma Quan ordered the audit and released it in February 2019.
Cox in November 2018 ousted former Rep. David Valadao, a Republican from Hanford, in a narrow election. Valadao is now running against Cox in an effort to take back the seat.
The National Republican Campaign Committee, the fundraising arm for House Republicans, obtained the new audit records through a California Public Records Act request to the city of Fresno.
Amid missing documents and money that went unaccounted, the audit found Cox and Frazier made personal loans to the nonprofit without loan agreements. The audit found the nonprofit’s money was used to pay for other projects managed by Frazier and Cox, such as Gateway Ice Center and Frazier’s Central Cal Baseball Academy.
The newly released documents answer which corporate officer was wired $50,000 from the sports foundation’s account on the same day a $50,000 check from Cox’s financial firm was deposited to the nonprofit’s account. The money was wired to Cox, not Frazier.
In emails between a Fresno official, Karen Jenks, and the foundation’s third-party bookkeeper Scott Fox, the two reference transfers between Cox’s personal account and Central Valley NMTC, one of his former businesses.
“Can you please explain why those loan repayments were not sent to the lender, (Central Valley) NMTC?,” Jenks wrote.
“There is no ‘lender’ there is no interest being made to TJ and/or Central Valley NMTC Fund, LLC,” Fox responded. “Money injected into the non profit is recognized as TJ Cox and then money being taken out is recognized as TJ Cox.”
Fox also said that “in the past the bank has erroneously deposit(ed) funds for (the sports foundation) into a different account,” according to the emails.
The audit said that was not an “adequate explanation.”
“Furthermore, CVCSF should appropriately recognize loans by the actual lender,” the audit states.
In a statement to McClatchy, Cox’s campaign said the new records represent “Washington Republicans’ desperate last ditch effort” to distract from a story about Valadao’s campaign allegedly paying his campaign manager in an illegal way.
“The facts in this story have already been reported on, and the transactions in question are completely proper and are unrelated to the Granite Park project,” Cox’s campaign said. “Rep. Cox is proud of the work Central Valley Community Sports Foundation did to create a beautiful youth sports facility on previously abandoned land.”
The audit’s release over a year ago sparked a firestorm in local politics, including accusations of partisan political attacks, audits of other city departments, congressional ethics complaints and a lawsuit alleging racism.
The lawsuit, brought forth by Frazier, contends the audit was incomplete and should not have been released.
But since then, it has not been updated. This week, city officials confirmed there are no updates to it.
“There has been no update of the audit performed by city staff on the Central Valley Community Sports Foundation’s Granite Park operations, nor has there been an update on the findings contained within that audit,” Finance Director Mike Lima, who supervises auditors, said in an email through a city spokesperson.
Frazier maintains the audit is full of mistakes, and that’s why city staffers are no longer working on it or commenting on it, he said.
In an interview this week, Frazier defended Cox, saying as the treasurer of the nonprofit Cox had every right to deposit and wire money from the sports foundation account.
Frazier also said the city was mistaken about where the $50,000 came from. It came from Cox’s personal business, not the new market tax credit firm as the audit claimed. Frazier said the city has a copy of the check to prove it, but won’t own up to its mistake.
The NRCC is using the newly released documents to attack Cox, he said. Frazier shared a personal letter he wrote to Cox thanking him for his community service.
“You won’t see this guy looking for a reward or doing ribbon cuttings because he’s doing the hard work no one sees,” Frazier wrote.
This story was originally published October 28, 2020 at 2:22 PM.
CORRECTION: The original version of this story said Scott Fox was the bookkeeper for the Central Valley Community Sports Foundation. Fox is the employee of a third-party company hired to do the bookkeeping for CVCSF, and did not work for the foundation directly.
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