Gov. Pat Quinn is defending the use of federal disaster aid in Neighborhood Recovery Initiative.
Illinois used $3.7 million from the federal funds awarded to the state in the wake of Hurricane Ike to set up a small business loan program under the NRI. Illinois Republicans in Congress have called for an investigation after reports that one group tasked with doling out loans,
Chicago Community Ventures, never did so, but still kept $150,000 after the state ended the group’s contract. Quinn claims the state acted quickly to cut ties with the organization.
“They received money because they began the program. They started a pipeline. They provided an infrastructure,” Quinn said. “They were not—that particular group—was not providing enough loans, and so they were monitored and they were removed from the program.”
The group had supposedly misspent a previous state grant before being awarded any money under the NRI. Quinn says the loan program itself was approved by the U.S. Department of Housing and Urban Development as an appropriate use of the Ike funds.
The state received a total of 48 million dollars from the federal government to repair damage caused by that 2008 storm.
The NRI is already the subject of a federal investigation after a state audit slammed the program for mismanagement and questionable spending.