The first official warnings about financial irregularities came from Colleen Yoshihara, a county auditor assigned to conduct a routine fiscal review in 2009. Records show Yoshihara, in a Sept. 2, 2009, report to the Urban League and its board, identified five findings about the organization’s lack of financial controls.
Mundy’s credit-card use topped her list.
“The League’s president has not submitted supporting documentation for charges on the organization-issued credit card for the past year,” Yoshihara wrote.
Yoshihara lowered the Urban League’s score of financial health to 3 out of 4, and asked the League to respond to her review within 30 days, which is county policy.
It took Mundy 147 days to provide an official response. On Jan. 27, 2010, he wrote Yoshihara in an email that they might want to schedule a “brief meeting (45 minutes or less) sometime in the next four to six weeks.”
For the next three months, records show, Yoshihara tried without success to get documentation of Mundy’s spending.
Finally, on April 27, 2010, Wilhoite told the county the board took the findings “very seriously” and “effective April 5, 2010, suspended the use of company-issued credit cards.”
Wilhoite also pledged “the CEO’s expense report will be reviewed and authorized by the board chair.”
But when Yoshihara reviewed the Urban League’s books in May of this year, she found Mundy was once again using the Urban League credit card without oversight. And the organization’s financial controls had weakened.
“The League’s CEO continues to use the organization’s credit card without providing timely substantiating documentation as to the business purpose of expenses,” Yoshihara wrote Aug. 9, 2011. “The League’s Board has been unable or unwilling to follow through with [promised procedures] resulting in a lack of reasonable oversight of League management.”
The Urban League hired operations director Derrick Moten after the 2009 review to beef up accountability. When he got Yoshihara’s 2011 fiscal review, Moten’s response was succinct:
“I am dead!!” he wrote to Yoshihara on Aug. 10, 2011.
Meanwhile, the Urban League’s own independent auditor, Gary McGee & Co., echoed the county’s warnings, citing “material weaknesses” in the League’s internal controls.
“Charges to the President’s credit card were not adequately supported or documented,” reads a June 14, 2011, draft management letter from the McGee firm.
“For example, of the $41,512 in total credit card charges made during the year [ending] June 30, 2010, $11,605 were not supported by receipts or other contemporaneous documentation,” the auditors wrote. “[I]n addition, there was no documentation for the business purpose of these charges in most cases.”
The outside auditor expressed nearly identical concerns a year earlier. This year, the McGee firm wrote that the IRS could view Mundy’s undocumented expenditures as compensation—and that could trigger sanctions from the IRS.
At the same time the Urban League’s fiscal controls went awry, Mundy suffered personal financial setbacks.
Property records show Mundy made heavy personal investments in Portland real estate, with disastrous consequences.
In recent years, Mundy bought condos on Northeast Broadway, in the Pearl District and in South Waterfront, while living in a million-dollar Irvington home. Records show he sold the Broadway property for a small loss. The South Waterfront condo went into foreclosure in 2008; the Pearl District property went into foreclosure in 2009.
The strain of those investments left him overextended.
Records show the state of Oregon filed a $26,000 lien against Mundy for unpaid income taxes in 2009, and the IRS filed a $42,000 federal lien against him the same year.
Even Multnomah County, got into the act, suing him in 2009 for $2,472 in unpaid county income taxes.
In 2010, after his home also went into foreclosure, Mundy sold it and used some of the proceeds to clear his tax liens and pay the county.
But his troubles did not end there. Records show that in October, a Multnomah County judge ordered Mundy’s car towed because of $302 in unpaid parking tickets.
Mundy denies there is any connection between his financial troubles and his use of the League credit card.
“One thing had nothing to do with the other,” Mundy says.