Personal Empowerment Zones

Nick Gillespie | February 4, 2003

The Cincinnati Enquirer has a devastating piece on the malfeasance rampant in the Queen City's federally funded "empowerment zone," which got various grants and tax breaks to help boost the local economy in depressed neighborhoods.

Up to $10 million a year in grants went down the toilet faster than the Bengals. Where'd the dough go? To well-connected folks, who generally didn't live in the designated neighborhoods, who ran the businesses and nonprofits funded by the largess.

A congressionally mandated audit found such gems as this one:

Nu-Blend Paints Inc., a zone-funded nonprofit company in Over-the-Rhine that recycles latex paint and containers into new paints, failed to complete job training or employ a single zone resident - despite spending $239,489, according to the audit.

The agency in charge of the zone responded with this:

The Empowerment Corp. disagrees, saying it provided check stubs and documents to show one employee completed job training.

Cincinnati is not alone. Fourteen other cities around the nation fared equally dismally, suggesting the empowerment zone concept--backed long ago by Republicans and put into practice by Democrats under Bill Clinton--is ripe for abuse. One good sign: The Dept. of Housing and Urban Development is actually cutting funding as a response to the program's poor track record, rather than using it to justify more funding.