Social Agency Evicted; City Takes Control : Cudahy: Council, however, votes to retain Director James Graham. Councilmen question once-critical colleague’s vote in favor of Graham not long after libel suit is dropped.

A divided City Council voted to evict the controversial Cudahy Social Service Agency from a city-owned building and take over the agency’s food distribution program for the needy.

But the council, by a 3-2 vote, also decided to leave the program in the charge of the agency’s director, James Graham, who was heading the agency when city officials, citing inadequate record-keeping, cut off funds in 1988. Graham will be paid $36,000 a year.

One of the votes to retain Graham was cast by Councilman John Robertson, who had been highly critical of Graham, and had been named as a defendant by Graham in a libel suit. Graham announced Tuesday at the council meeting that he had dropped the suit late last year.

Two agency supporters, Councilmen Bill Colon and Tom Thurman, joined Robertson in voting to cancel the agency’s lease and to take immediate possession of the city-owned building, which also has been occupied by four other nonprofit organizations that rented offices from the Cudahy Social Service Agency.

Under the plan, all but one of the agencies will continue to operate in the building. The agencies provide food, clothing, advice and other help to disadvantaged people.

“We don’t want to throw the baby out with the bath water,” Robertson said last week after the meeting. “We still need these services in Cudahy. Hopefully now we will function better than before.”

Mayor Joseph Graffio and Councilman Joe Fregeau voted against the proposal and questioned Robertson’s motives during a raucous council session. Graffio and Fregeau pointed out that Robertson’s proposal surfaced after Graham decided to drop the lawsuit.

Robertson later vehemently denied any such connection. “I get tired of answering all these charges against me . . . wild accusations are not the way to conduct business,” he said. “Mr. Graham and I have had our disagreements, but he has the background. I didn’t have another suggestion. Graham just didn’t have the support before. He’s not the real problem here. The real problem is that the two Joes (Graffio and Fregeau) want to throw the whole thing out. They don’t want social services in Cudahy.”

At the meeting, Graham said he dropped the suit because he “got tired of fighting.” He could not be reached for further comment.

The council decision is the latest chapter in the Cudahy Social Service Agency’s controversial history. City officials suspended payments to the agency from Community Development Block Grant funds in September, 1988, after an independent audit found that the agency could not adequately document how it was spending its money. One month later, the city tried to evict the agency for nonpayment of rent. In August, 1989, the city’s Redevelopment Agency, which leases the building, approved an out-of-court settlement for $40,000 in back rent.

Eviction efforts were renewed last month after city officials learned that the state Franchise Tax Board had suspended the agency’s nonprofit status for failure to file income tax returns. At Tuesday’s meeting, City Atty. Glenn Watson informed the council that it could cancel the agency’s lease since the agency was not recognized as a legal nonprofit corporation.

Robertson then presented the council with a plan to take immediate possession of the building, draw up leases with the four independent social service agencies renting offices in the building, and retain Graham.

The proposal also prevents any councilman from maintaining an office in the building, a reference to charges that Colon, who is up for reelection this year, was using the building as his political headquarters.

Colon had worked as a volunteer at the Cudahy Social Service Agency, and recently formed Operation Upbeat, a youth agency that had an office in the building. Colon, who previously denied using the office for political purposes, said that he has moved the youth program.

After Fregeau denounced the plan during the council meeting, Graham said he was sick of fighting over the agency. He said angrily that he would get the lease and “burn it in front of you on the podium, if that will make you happy.”

Graffio and Fregeau also questioned plans to reduce tenants’ rent to about $60 a month each from about $375 each. The reduced rent would not allow the city to pay $3,000 a month to retain Graham and pay the building’s electricity bills, which run about $2,000 a month, according to the councilmen.

They also said the city should make arrangements with other agencies to distribute food and clothing, rather than taking over those programs from the Social Service Agency.

But it was Robertson’s proposal to retain Graham as director that generated most of the debate.

Robertson once accused Graham of misusing agency funds and demanded a grand jury investigation. In the fall of 1988, shortly after Robertson’s accusations were published, Graham announced that he was filing a libel suit.

At Tuesday’s meeting, Fregeau questioned whether Robertson could introduce a motion to retain Graham, saying the libel suit created a conflict of interest. Graham then told the council that he had dropped the suit. He said he did not remember exactly when he withdrew the suit, but said he believed it was sometime in November or December.

Graham had announced at a council meeting in mid-December that he had resigned as the agency’s director. He said Tuesday that the board of directors refused to accept his letter of resignation.

But Georgia Scrivner, one of the board members, said the board had not met, nor had she had any contact with the other two members.