INACCURATE, MISLEADING, AND BIASED MEDIA COVERAGE ABOUT CORE SERVICES GROUP, INC.
Recent media coverage about CORE Services Group in The New York Times and other news outlets is filled with inaccuracies and insinuations based on assertions that are incomplete and taken out of context. The Times, in particular, seems set on presenting CORE and Jack Brown as bad actors without offering any facts or evidence to support such serious allegations. We are deeply disappointed that the Times and others are focused on making these unsubstantiated allegations and demonstrating a biased view of CORE and the facts, especially at a time when there is a great need for the services we have provided faithfully to the NYC Department of Homeless Services (DHS) clients for many years.
What’s even worse is that the Times is using CORE as a scapegoat in connection with the growing homelessness problem. The fact is that CORE and its frontline staff have worked with great dedication throughout the pandemic (as we have done for nearly a decade) to provide high quality social services to those in need in New York. And CORE has continued to do this despite the fact that DHS has not paid CORE for more than $30 million in services already provided to clients over the past two years.
CORE’s concerns about continuing to provide services under these circumstances compelled CORE to notify DHS of its desire to stop providing services for programs without contracts and its request to be released from existing contracts. It became untenable for CORE to continue to work without greater assurance of payment for services performed.
We believe it is important to correct the record because the media outlets have irresponsibly chosen to attack CORE, Mr. Brown, and the dedicated employees helping the less fortunate, all for the purpose of spinning salacious, biased, and click-worthy stories.
SUMMARY OF SOME OF THE MISLEADING MEDIA COVERAGE
The New York Times has written two lengthy stories about CORE in the last two months, which unfortunately have led to other news outlets parroting much of the incorrect, misleading, and unsubstantiated content. Below is a summary of what the Times (and others) have said, what is inaccurate or lacking context, and the complete facts that provide the full picture.
• Full Transparency Regarding Corporate Structure and Affiliation with For-profit Businesses
The Times reported the following in its October and November stories:
The nonprofit has channeled contracts worth at least $32 million into for-profit companies tied to Mr. Brown, allowing him to earn more than $1 million a year, The New York Times found.
In fact, Mr. Brown does not own the for-profit companies. They are wholly-owned subsidiaries of CORE Services Group, Inc. – a New York non-profit. The Times’ use of the word “channeled” implies secret dealings. In fact, CORE described its corporate structure in letters sent to DHS executives in 2017, and also identified the wholly-owned subsidiaries in CORE’s annual disclosures, which are filed with the City. There never has been an allegation that CORE’s corporate structure was illegal or unethical or that it compromised services to CORE’s clients.
In fact, there are legitimate business reasons for CORE’s corporate structure and the creation of for-profit subsidiaries. CORE found that other third-party vendors were not able to consistently meet the standards of quality and dependability that it wanted for its shelters, especially because DHS was so slow to meet its financial obligations. So, CORE created the subsidiaries to help address those issues and bring certain necessary services within a vertical structure that is common in the corporate world. Again, this was explained and disclosed to DHS starting back in 2017, and for years there were no concerns about this structure—or the fact that the subsidiaries were providing services to some of CORE’s DHS programs.
• Fair and Fully Disclosed Executive Compensation
The Times insinuated that there is something inappropriate about the amount of Mr. Brown’s compensation, alleging that he “personally prospered” as the CEO of CORE. But, as Dr. Wilmer Leon observed in a recent op-ed in Black Press USA,
[The New York Times’] main criticism appears to be that Mr. Brown, a talented African American businessman, is compensated too generously – about $1 million on what CORE says is an annual revenue of $132 million in 2019. Never mind that his salary is in line with those of top executives of organizations of similar size. He routinely has to disclose his salary to the city as he applies for contracts and/or contract renewals, as CORE pointed out.
This is just another example of the smoke and mirrors reporting the Times utilized throughout its coverage of CORE in an apparent effort to create the specter of impropriety where none exists.
• Hiring of Qualified Relatives Was in Full Compliance and Transparent
In both articles, the Times reported that Mr. Brown “hired his family members,” implying, incorrectly, that it is illegal or wrong for an organization to employ relatives. Each of Mr. Brown’s five family members (out of over 1,100 employees) are fully qualified for their positions, were hired in accordance with both CORE’s anti-nepotism policy and DHS’ policy; and were identified as relatives in Mr. Brown’s annual conflict of interest disclosures. What the Times failed to report is that for-profit and not-for-profit companies allow relatives of employees to also work for the company as long as the relative is not a direct-report and is qualified for their position. While the Times’ tried to imply otherwise, it did not claim that these standards were violated.
• Mr. Brown’s Development of Real Estate Was Disclosed to DHS Well in Advance
Another insinuation the Times makes is that there is something inappropriate about the fact that CORE operates shelters in two buildings owned by entities in which Mr. Brown has an ownership interest.
What the Times failed to report, however, is that DHS knew about Mr. Brown’s participation in both real estate development projects, even before CORE submitted proposals to operate shelters in those locations, that these buildings were selected in light of the scarcity of decent standalone shelters for homeless people in New York, and that CORE, a minority-founded not-for-profit with no endowment, could not afford to finance the development of these projects itself. In fact, it was for that reason that CORE’s fully independent and impartial board approved Mr. Brown’s role in the development of both properties. Nor did the Times report that CORE described Mr. Brown’s role in real estate development in letters sent to DHS executives in 2017, and that Mr. Brown and CORE disclosed Mr. Brown’s ownership interest in both real estate development projects to the City in annual required disclosures, CORE’s annual Form 990s, as well as other required disclosures. Moreover, there is nothing illegal or unethical about this type of transaction. Indeed, as part of the budget process, CORE provided DHS with copies of the leases for both locations, which included the rent schedule for both properties, all of which were reviewed and approved by DHS and CORE’s Board. Like other parts of the Times’ reporting about Mr. Brown and CORE, there is simply nothing to see here when all the facts are fully and fairly presented.
The New York Times did not write a fair and balanced report about CORE or Mr. Brown. Instead, as Dr. Leon expressed: “The New York Times article [about CORE] was unfair, deliberately provocative, and incomplete. It is not what one should expect from the so-called ‘national paper of record.’ Mr. Brown and his organization do not deserve to have targets on their backs. They deserve our support.”