What’s the deal with CORE Services Group?

Jack A. Brown III, one of the biggest homeless shelter operators in New York City, has had his alleged dubious business dealings fleshed out in an in-depth report published by The New York Times.

Brown, the chief executive of CORE Services Group, has been earning $1 million from contracts with the city – making him the highest paid shelter operator in the city – while the shelters his nonprofit runs have been without necessary resources, such as housing assistance and job assistance. 

According to the Times’ findings, Brown has been securing city money by having all services used by the 24 shelters that CORE manages provided by companies that Brown runs, including a security, maintenance and catering company. Brown has also collected funds by renting buildings through two companies that he owns to CORE and has employed members of his family at CORE, including his mother, aunt, sister, brother and niece. Both state and federal law prohibit nonprofits from engaging in what is known as “self-dealing,” which is what happens when executives try to find ways to financially benefit themselves and choose not to disclose such information. 

CORE has denied all allegations of wrongdoing.

The city has been aware of some of Brown’s previous shady business dealings and practices at other nonprofits that he has managed since 2017, but has failed to part ways with the group and instead has continued to provide it with funding. To date, the city has awarded Brown’s shelters with $352 million.

Just last week, CORE backed out of a deal to run Trump Golf Links at Ferry Point in the Bronx, after The City published a story about the surprising contract won by the operator who had no former history of running a golf course and disclosed some of Brown’s suspicious dealings. 

However, the city is known for being reluctant to sever ties with homeless shelter operators, in particular, as the city has been overwhelmed by the record number of people experiencing homelessness. The city is also the only place in the country that has a “right to shelter” mandate, which has been in effect for the past 40 years, that guarantees all people the right to temporary housing. 

Despite Mayor Bill de Blasio’s insistence over the years that he would ensure shelters were not run for profit, little has been done to curb self dealing efforts. A sweeping shelter audit was ordered by the city in February, but it could take over a year to finalize the report. In the meantime, Brown is still able to continue business as usual.