NIHC in 'uncharted territory'

By RALPH BARTHOLDT

Staff Writer

COEUR d’ALENE — A Coeur d’Alene housing coalition victimized by embezzlement has a long history of helping families in the region.

When news broke earlier this year that the executive director of the North Idaho Housing Coalition had embezzled more than $500,000 of taxpayer funds and donations, a questioning tremor rippled across the Panhandle.

The coalition, which has access to approximately $3 million of federal funding annually to assist families with affordable housing in Idaho’s five northern counties, was formed under a different name in 1991, and has undergone a series of transformations over the past 25 years.

Lori Isenberg, its executive director since 2008, was arrested in February and charged with grand theft. For the prior 18 months, her responsibilities had grown to include performing the majority of the organization’s accounting functions in-house. The organization’s longtime accountant periodically reviewed the reports.

Before then, the group — officially named the North Idaho Community Services Corp. — had undergone annual outside audits.

Isenberg, who bonded out of jail, has since failed to appear for court appointments and a First District Judge has ordered a $500,000 warrant for her arrest.

North Idaho Housing Coalition president Kerri Thoreson said the coalition is undergoing a forensic audit to determine how much money Isenberg allegedly stole. The group is also in the process of hiring an interim director, Thoreson said, and the organization remains financially sound.

“We’re paying our bills, and we’ll continue to pay our bills,” she said. “Anyone who has a relationship with us, no one has been harmed financially.”

Phil Colozzi, one of the group’s founders who served as its executive director until 2000, said the organization began as a stopgap to prevent mortgage foreclosures for families who had hit hard times, and to get homeless people off the street.

“We saved over 600 families from foreclosure in 10 years,” Colozzi said.

In those early days, most of the money to administer the organization came from a group called the Northwest Area Foundation based in Minnesota. Prior to 2000 it received no money from the state of Idaho, or the federal government, he said.

Donations from businesses, local companies and private donors amounted to around $70,000 annually, and the group’s board comprised of lawyers, accountants, insurance executives, business consultants and private citizens used their expertise to operate the nonprofit.

The group teamed up with the city, which donated properties including the Mudge apartments on First Street, which were transformed into housing for homeless people. Churches such as First Presbyterian, gave the group its first house, which was moved and placed on city property on the 600 block of Hattie Avenue.

Back then, about 60 percent of clients were single mothers, Colozzi said. The need to help families who couldn’t afford their homes and who were in danger of defaulting on their mortgages — and to find housing for homeless — was immediately apparent.

“There were more people running into foreclosures than we had money for,” Colozzi said. “We had 60 clients the first month, and it went up from there.”

Helping people stay in their homes, or get off the streets, Colozzi said, was a goal the board deemed significant.

“We weren’t dealing with millions of dollars,” Colozzi said of the group’s modest budget. “We had an audit every year.”

After Colozzi retired, the Panhandle Area Council, or PAC, took over the administration’s accounting, and state and federal funding became more of a driver for the nonprofit.

John Austin, a longtime board member, said the group’s relationship with PAC was a good fit.

“PAC did the accounting,” Austin said, and he also noted there were annual audits. “It looked like it worked well for years.”

In 2008 the group’s name was changed to the North Idaho Housing Coalition, but the mission was the same.

In the decade since its reorganization, the coalition has helped 138 families and individuals to purchase homes, Thoreson said.

Individuals must meet a set of standards, and be able to pay the mortgage, but the coalition will help by providing affordable homes — usually distressed properties that have been refurbished — and with down payments.

“We make it very affordable for them.” Thoreson said.

Past board members have conceded that Isenberg joined the coalition with strong credentials.

“She was well-known, highly regarded,” Austin said. “She was doing a good job.”

Past president Nancy Lowery said there was an intimacy in the organization that stemmed from like-minded people working toward the common and noble cause of providing roofs for people who couldn’t otherwise afford one.

“There is a feeling of trust,” Lowery said. “And there never had been any money stolen.”

Lowery, who hired an accountant for the nonprofit — the same accountant whose in-house services Isenberg began providing under the auspices of saving money — said she would have likely questioned limiting the accountant’s involvment in the day-to-day bookkeeping, had Isenberg leveled the suggestion under Lowery’s watch.

She doesn’t blame the board for its trust in Isenberg.

“I have lost sleep over how the hell something like this could have happened,” she said. “It’s atrocious. Why steal from this community? You’re stealing from people who needed the help.”

Colozzi, who is 78, said operating the housing nonprofit was difficult enough without having to wonder where the money was going.

“Business is business, is business, is business,” he said. “Whether it’s a nonprofit, or a for-profit.”

Although the Idaho Housing and Finance Association, which funds the coalition, would not release the amount of money it has provided as loans, spokesperson Dean Johnson said all loans provided to the coalition have been repaid.

“We don’t know how this will impact our funding relationship with (North Idaho Housing Coalition) until we see the forensic audit,” Johnson said.

The group hasn’t applied for more funding from Idaho Housing and Finance, he said.

Despite the alleged theft, Thoreson said her organization, which earns a developer fee of between 10 and 14 percent for each home it sells, has been able to use profits to donate to other, similar groups.

In 2016, the coalition gave $20,000 to a local housing nonprofit and last year it gave $40,000. When financial irregularities were discovered, the group had the cash to hire an attorney and pay for an audit.

“This is uncharted territory,” Thoreson said. “We’re absolutely committed to what the organization has done and to what it will continue to do.

“I am confident we will prevail.”