Community Action Duluth retaliates against whistleblowers, ignores transparency laws, censors the press

For a year and a half, the nonprofit organization Community Action Duluth (CAD) has had a new executive director, Classie Dudley. Ms. Dudley’s tenure at the organization has been marked by upheaval, conflict, and staff departures.

Per CAD’s bylaws, the purpose of the board of directors is to provide oversight of the organization, but the board refuses to address violations of CAD’s bylaws and personnel policies. In June of 2023, when Director Dudley fired an employee over a Facebook post, the board said and investigated nothing.

Community Action Duluth, as one of 24 community action agencies in the State of Minnesota, receives public funding to administer a variety of income-based programs for area residents—including free tax preparation and hands-on vocational job training.

Over a six-month investigation, the Monitor has documented Ms. Dudley and the board of directors retaliating against whistleblowers, ignoring transparency laws, and censoring the press—all of which could jeopardize the organization’s funding.

We present our findings here.

A new director

In February of 2022, after 4 years with Community Action Duluth, Jeff Longenecker resigned his position as the executive director.

Three months later, in May, an internal search committee settled on two finalists for the executive director position:

1. David Clanaugh—Career administrator and former executive director of Western Lake Superior Habitat for Humanity; and
2. Classie Dudley—President of the Duluth chapter of the National Association for the Advancement of Colored People (NAACP).

In addition to board members, the search committee included CAD employees. Office Coordinator Dawn Paquette was one of the employees. When the Monitor spoke with Ms. Paquette on June 7, 2023, she told us that Classie Dudley hadn’t been the employees’ top choice. “She was inexperienced, to say the least,” said Paquette. The 29-year-old Dudley was in her second year running the NAACP.

However, several board members strongly advocated for Ms. Dudley. “There were several of the board members that knew of her and were just kind of, like, ‘Yes!’ … Like, you know, ‘We gotta hire her! She’s going to do just wonderful things.’ So they went ahead and did that,” Paquette said.

Classie Dudley started work as the executive director of Community Action Duluth on June 6, 2022.

Paquette said she found it concerning that Dudley was running two organizations simultaneously. This concern sharpened shortly after Dudley began work. CAD employees were planning a sendoff celebration for a longtime coworker who was leaving and they invited Dudley to join them, but Dudley’s other obligations kept her from attending.

Dawn Paquette: Brandon had been at Community Action for years, and he was leaving just as Classie was [coming in]. So we said, ‘Let’s have a big potluck in the park and have kind of a staff meet-and-greet and we can all just kind of get to know Classie.’ Instead, Classie had to take off to Denfeld and deal with an NAACP matter. So she blew us all off for that … So that was kind of, like, why are you still there, you know? I mean, you kind of need to make Community Action a priority now, and this is the first opinion you’re giving us all of yourself.

Throughout the Monitor’s investigation, Classie Dudley has not responded to invitations to comment. In a Duluth News Tribune interview published on June 25, 2022, she addressed the matter of running two organizations, saying: “It’s not as hard as people think. I have such strong committees.”

Dawn Paquette said she resigned from CAD in October of 2022, after Director Dudley slandered her to the board of directors.

Paquette: One of my duties that I had done since I started was all the board stuff. I handled all board correspondence. I put our packets together and sent them out. If board members had questions, usually they would come to me … I attended every single board meeting, took minutes, organized the files. Everything was pristine when Classie came on.

So my first one-on-one with her, she’s talking about all this restructuring that she’s going to do, and [how] people are doing things in their positions that they shouldn’t be. And so, right off the bat, she did not like me doing the board stuff. Not at all. So she took it from me to do herself. Then she went to the board and told the board that I no longer wanted to do it.

Now, mind you, this is three-and-a-half years of my blood, sweat, and tears. I put more time into that board stuff than I did anything else. That was my baby. And so one of the board members had come and asked me, ‘Why is it that you no longer want to do it?’ And I’m like, ‘Excuse me?’ …

So I had confronted Classie, and … she threw a hissy—‘No, that’s not true’ and ‘You said that you didn’t want to do it.’ And I’m like, ‘No. Why would I just give that up? It’s part of my job that I’ve been doing. Why all of a sudden would I stop now, because you came on board? Nothing’s changed.’

The first whistleblower

CAD’s whistleblower policy states that the CAD board chair “has specific and exclusive responsibility to investigate all reported violations … in the case of an organizational violation/violation by the Executive Director.”

On Aug. 30, 2022, CAD Finance Director Lynn Habhegger submitted a formal whistleblower complaint to the CAD board of directors, describing her concerns with Director Dudley.

“Please know that I do not take this correspondence … lightly,” wrote Ms. Habhegger. “As an 18-year veteran of the military and an experienced professional with more than 25 years in leadership roles in public and nonprofit administration, I hold the hierarchy of the ‘chain of command’ in deep regard … However, my concerns have escalated to a degree that I feel warrants formal staff-to-board communication. Furthermore, as several of my concerns pertain to the organization’s financial management, it is my duty to be transparent with the board in such matters.”

Ms. Habhegger stated that Director Dudley had only met with the finance director once in the 3 months since she had taken over CAD.

Classie has not once inquired about the financial health of the organization, requested any type of financial reporting, nor has she shown any interest in keeping abreast of cash flow … Classie has not shown any initiative to collaborate on, or participate in, the FY23 budget process which management staff have logged hundreds of hours preparing. I have not received any formal input from her regarding the Administration department’s budget, nor the organization’s budget as a whole; nor did she attend any of the budget preparation sessions I presented to the management team.

A Monitor review of the board minutes lends support to Habhegger’s allegations. On Sept. 29, 2022, the board of directors convened a special meeting to review and approve CAD’s budget for Fiscal Year 2023. Seven directors listened and asked questions for an hour as Finance Director Habhegger and Development Manager Katherine Mueller presented CAD’s $2.5 million budget and funding forecast. Executive Director Dudley did not attend the meeting.

“While I am confident in my personal skills and have no desire to be ‘micro-managed,’ I find it alarming that there is such a lack of engagement by the Executive Director regarding the agency’s finances,” wrote Habhegger. “The Executive Director’s understanding of, and involvement in, the organization’s finances is pivotal to its financial health and success.”

Habhegger went on to describe several specific instances where she felt Director Dudley was failing the organization. She noted that the director of field operations position had been vacant for several months, leaving two of CAD’s most important programs without direction, and that Director Dudley could have assisted them.

The managers of these programs have been left to flounder to the point of exasperation. As Executive Director, Classie should most certainly be leading these programs by taking up the slack and filling the voids left by the yet unfilled position. Neither of these program managers have ever had any budgeting or grant experience; yet they demonstrated the initiative to learn and take on this daunting task without any support from the Executive Director.

Habhegger also described a situation where Director Dudley had allegedly forced one of CAD’s valued construction managers to sign a binding legal document “without fully comprehending its ramifications” and “without adequate opportunity to read and comprehend it.”

“He is now left fearing for his future career in the wake of an error that should have never happened had the proper guidance and leadership been provided,” Habhegger wrote.

Habhegger also alluded to the slandering of Dawn Paquette:

The public frustration and visible distress displayed by Classie at last month’s board meeting was nothing less than unprofessional, embarrassing, and appalling. With staff present, she blatantly lied about her conversations with staff, refusing to accept responsibility for her decision to remove duties from a staff member.

Board silence

The CAD board refuses to confirm whether they investigated Ms. Habhegger’s whistleblower complaint. No items relating to the complaint appear on board agendas or minutes reviewed by the Monitor.

The minutes for the meeting of Nov. 2, 2022, however, note the following:

There was some discussion on the process of how to create or find a policy that does not have employees overriding the ED or HR by reaching out to the board about complaints. This will be addressed at the next governance committee.

This discussion seems to be about a “policy” which eliminates the whistleblower policy.

On Nov. 30, 2022, Lynn Habhegger submitted her resignation to the board of directors.

While I followed proper protocol in submitting my concerns, I have not received any communication from the Board Chair [Shannon Redbrook] regarding the receipt or status of this complaint, nor has there been an investigation of the complaint. All in direct violation of our personnel policy …

It has become evident that the board is unwilling or unable to address the staff’s concerns … The board has not done their due diligence in this matter and has allowed the Executive Director to perpetuate a dramatic, toxic, and unsafe work environment; not only resulting in staff departures, but leaving the board exposed to potential liability because of their inaction and violation of proper procedures and policies …

My decision to resign saddens me deeply, as I have forged many friendships here and worked hard to establish a top-notch finance team … This could have been avoided. As I cautioned in my letter to the board in August, staff departures in this type of environment are to be expected.

More whistleblowers

In October of 2022, shortly before she resigned, Dawn Paquette emailed her concerns with Director Dudley to Marcel Urman at the state Office of Economic Opportunity (OEO), CAD’s largest funder. Urman was scheduled to pay a monitoring visit to CAD in November to confirm the agency was in compliance with grant requirements.

Urman encouraged Paquette to have other employees contact him. “Dawn, thank you for this well thought out email,” he wrote on Oct. 7, 2022. “We have heard some complaints but none with this level of detail. Our office is aware of concerns and we are working on a plan to steady the ship … Please share this with your co-workers and tell them they too can reach out if they feel comfortable doing so.”

On Oct. 27, 2022, Development Manager Katherine Mueller sent a long email to Urman. “I have agonized about whether or not to reach out to you, but ultimately determined that I feel ethically obligated to inform you of some things that are happening at Community Action Duluth … I have worked with nonprofits at many levels of functioning and stages of life cycle. I’ve been through several executive director terminations and have worked with several executive directors who should never have been hired. What I have not seen is such an incompetent and untruthful executive director retain her position for so long after incompetence and unethical behavior is uncovered by the board of directors.”

Mueller continued:

I have seen Classie Dudley tell numerous untruths to the board that appear designed to keep them off balance and unable to hold her accountable (as she also does with staff) … At the October board meeting, she informed the board that OEO had directed CAD not to add new board members when Cruz Mendoza’s application was brought forward. At the September board meeting, she cast doubt on the bylaws, making the claim that they had been revised to reduce the number of board members when Salaam Witherspoon’s application was brought forward … The board needs to take these untruths seriously. The executive director does not control the board nor its membership, and her attempts to refuse qualified members are unacceptable.

The OEO report

When Marcel Urman visited CAD for his monitoring visit, on Nov. 2, 2022, he met with nearly a dozen employees, including Mueller, Lynn Habhegger, and most of CAD’s top managers. He listened carefully to their concerns and (according to those in attendance with whom the Monitor has spoken) left the group feeling they had been heard.

Urman’s report, which he submitted to the board of directors on Dec. 5, 2022, was a shock to the employees. None of their concerns were addressed. Instead, Urman dismissed staff complaints as “frivolous” and called for the removal of Classie Dudley’s critics from Community Action Duluth.

Urman started with CAD Board Member Alanna Oswald. Ms. Oswald, who was also an elected Duluth School Board Member, had been serving on CAD’s board since February of 2022. Oswald had also been one of the board members who had strongly advocated for Classie Dudley to be the new executive director.

Oswald, a stickler for process, drew the ire of the new executive director when Oswald requested that the board follow correct parliamentary procedure during their meetings shortly after Dudley was hired.

In an interview with the Monitor, Oswald stated that Dudley would declare meetings closed without stating a reason (a violation of the open meeting law) and would even make motions to the board herself (which executive directors are not authorized to do).

“Classie just tells them what they think and then they do it,” said Oswald. “I would be that obnoxious person that brings out the bylaws at the meeting and says, ‘Well, this is inappropriate’ and I would challenge her back. And she didn’t like to be challenged.”

Marcel Urman’s report did not call for anyone to follow correct parliamentary procedure or adhere to the bylaws. Rather, he attacked Alanna Oswald.

As a board member has no authority individually and decisions can only be made as a full board, it appears that one member, Alanna Oswald, has violated her role by going against the board’s recommendations to hire the Executive Director. She … [is] leading the charge to terminate the current ED without cause which is not in accordance with a clear and fair hiring process and may put the entire board at personal risk.

It is unclear what Urman means when he says Oswald is “going against the board’s recommendations to hire the Executive Director.” He offers no examples. Nor does he explain how Oswald’s actions could “put the entire board at personal risk.”

Moreover, despite Urman’s assertion, executive directors MAY be terminated without cause. CAD’s personnel policies state:

All employment with Community Action Duluth is considered “at will” and may be terminated at any time by either CAD or the employee for any reason or no reason.

Further, CAD’s bylaws state:

The Executive Director is directly accountable to the Board of Directors. The Executive Director may be removed from employment only by the determination of the Board of Directors. A two-thirds (2/3) vote of all seated Board members (excluding vacant positions) shall be necessary to remove the Executive Director.

No cause is necessary for removal—only a 2/3 vote of the board.

Urman’s report continued:

This board member has also conspired with CAD staff to undermine the current Executive Director by means of intimidation, slander and withholding pertinent information. Per your bylaws, Alanna is in violation of the conflict of interest [policy] and is subject to removal for cause …

One paragraph earlier, Urman had ignored CAD’s bylaws. When it pertained to removing Ms. Oswald from the board, he was suddenly citing them like a parliamentarian.

Urman offered no evidence that Oswald had violated CAD’s conflict-of-interest policy. Nor did he provide evidence for his accusations of “intimidation, slander and withholding pertinent information.”

With Oswald beaten down, Urman moved on to the employees.

Through conversations with staff, it appears that some are inciting other staff to file frivolous complaints against the current ED, for example, “we never know where she is or what she is doing.” There is a clear misunderstanding of roles within this organization. There have been no reports of fraud, misappropriations of funds or illegal hiring/firing practices. Programming seems to be on track and participants with low incomes are being served.

Here, Urman packages up the many concerns voiced by top managers over several months and collectively dismisses them as “frivolous complaints.”

It was true that CAD employees hadn’t alleged fraud or illegality against the executive director; they were reporting ethical violations. It was their right to do so under CAD’s personnel policies, which Mr. Urman does not mention in his report.

In retrospect, Urman appears to have been baiting a trap when he encouraged employees to reach out to him. Once identified, Urman targeted the leaders for punishment.

Two staff members appear to be acting in an insubordinate manner which should be grounds for termination according to the agency’s personnel policies. In conversations with them, OEO staff found that they use company time to gather staff, write emails and try to stir up emotions to sabotage the ED. Some staff said to myself, in front of the Human Resources Director, that they would rather see CAD fail and be swallowed up by AEOA than see the executive director succeed. Staff with this attitude should not be able to continue to damage the agency which provides important programming to the community. These staff were Lynn and Katherine.

When the Monitor contacted Lynn Habhegger and Katherine Mueller for comment, Ms. Mueller responded via email on Jan. 13:

Staff who were present at the meeting … do not recall anyone stating ‘they would rather see CAD fail and be swallowed up by AEOA than see the executive director succeed.’ Lynn, [Human Resources Director] David Huntley and I told Classie as much when Marcel’s report came out.

Mr. Urman had no stern words for Executive Director Dudley. Ultimately, his report concluded that CAD’s problems were due to “disruptive and ineffective board meetings, interference of staff, and a new Executive Director who is not supported to effectively manage the agency.”

Everybody leaves

Dawn Paquette resigned from CAD in October of 2022.

Lynn Habhegger resigned from CAD on Nov. 30, 2022.

Katherine Mueller resigned from CAD on Dec. 1, 2022.

Marcel Urman filed his report on Dec. 5, 2022.

At CAD’s regular board meeting of Dec. 7, 2022, the board went into closed session to vote on whether they should remove Alanna Oswald from the board. Votes are not allowed to be taken during closed sessions, but this was another state statute the board ignored. They debated Oswald’s alleged violations and ultimately voted to allow her to remain on the board.

On Jan. 1, 2023, Oswald resigned from the board. “First I want to say thank you for not allowing fictitious, erroneous statements about me [to] affect my board membership. I am grateful the majority of you would not allow me to be booted from the board for false allegations,” she wrote in her resignation letter. “Although I know my knowledge of board organization is desperately needed … I know my strengths will be better used in other places that will embrace the strengths I bring, rather than fight and bully me as [Board] Chair [Shannon Redbrook] and ED [Dudley] knowingly do.”

Oswald reiterated her concerns with the organization, several of which pertained to parliamentary procedure.

When closing a meeting, you must cite the specific law that allows for closing a meeting, such as privileged attorney-client conversations, or protected private data, and ONLY that topic can be discussed in a closed session. Otherwise, an open meeting must be open to all. Many of our funders REQUIRE this openness so they can check in if they feel the need. Removing open meetings from the bylaws may dramatically affect the ability of CAD to fund its programs.

Ms. Oswald is not the only board member who has departed. Of the 12 people who were serving on the board when Classie Dudley was hired, 8 of them— Alanna Oswald, Amy Galarowicz, Ashley Grimm, Beth Burt, Helen Davis, Mercedes Halverson, Mike Mayou and Rosie Loeffler-Kemp—departed within a year.

The board struggles to maintain its membership today.

Fired for a Facebook post

On Friday, June 2, 2023, paychecks from Community Action Duluth were not deposited into a number of employees’ accounts as scheduled. When CAD closed for business that day, at noon, employees discovered the missing deposits.

At 1:14 p.m., CAD Tax Site Manager Kyra Gustafson posted the following message to her personal Facebook page: “Wow, didn’t get paid from work and no email from the boss either.” Gustafson did not identify Community Action Duluth or Classie Dudley by name.

Seventeen minutes later, at 1:31 p.m., Director Dudley emailed all CAD employees:

Happy Friday Everyone, 

I wanted to update you on a few things regarding payroll. Today is payday! I know some of you are used to seeing it early in the direct deposit process, due to our transition in converting to [a new payroll system] … Payroll has been processed and … employees will be paid today before 7 pm.  We apologize for not communicating this earlier as we were not notified about this until recently.

Gustafson responded to Dudley, copying all CAD employees:

Classie, this is unacceptable! I cannot book a hotel room to go out of town because I do not have money in my account. This is your responsibility to ensure we get paid on Friday … Banking rules [say that] even if we get paid at 7 pm, we will only get $200 and the rest will post on Monday night. I’m very upset. I don’t get paid much and depend on my paycheck.

On Monday, June 5, Ms. Gustafson saw that Executive Director Dudley had invited her to a meeting at 8:30 a.m., when Gustafson had a previously scheduled meeting. Dudley’s meeting request was declined.

Later on June 5, Dudley gave Gustafson a performance improvement plan (PIP). In the PIP she told Gustafson that Gustafson was not listening to her, failed to attend meetings, and failed to provide requested information. Dudley cited Gustafson’s failure to attend the 8:30 meeting earlier that day as a concern but did not offer any other specific behavior that led to the PIP. In the PIP, Dudley told Gustafson that she needed to respond to emails within a day and complete a training about professionalism in the workplace.

As requested, Ms. Gustafson completed the training.

On June 12, Ms. Dudley fired Ms. Gustafson.

Dear Ms. Gustafson:

This letter should serve as confirmation that your employment with Community Action Duluth is being terminated effective today.

The reasons for this decision include:

1.Violation of Offensive Behavior and code of Ethics.

2. Non-Compliance with providing requested information to supervisor as requested in Employee PIP.

3. Damaging fraudulent statements about the Organization …

While this is an unfortunate situation, we feel it is within the best interests of the business needs of Community Action Duluth.

Sincerely,

Classie Dudley

The “fraudulent statements about the Organization” are a reference to Ms. Gustafson’s June 5 Facebook post.

Because Ms. Gustafson was fired for misconduct, she was ineligible to collect unemployment benefits in the State of Minnesota. She appealed to the state Unemployment Office, which conducted an investigation that produced the documentation presented here.

During the investigation, Kyra Gustafson and Classie Dudley were asked to produce evidence of their claims. The report notes that Gustafson’s “consistent, detailed, sworn, and first-hand testimony was more likely than the employer’s vague, written statements to the contrary. The preponderance of the evidence supports Gustafson’s version of events … There was no evidence that Gustafson violated any reasonable policy against offensive behavior when she posted her June 2 2023 comments on Facebook … There was no evidence that Gustafson failed to meet any other expectation … including the expectation for responding to the supervisor’s request for information.”

On Aug. 15, 2023, the Unemployment Law Judge ruled that Kyra Gustafson had been fired for reasons “other than employment misconduct” and could not be denied unemployment benefits.

Censoring the press

The Monitor first became aware of Community Action Duluth’s problems on June 5, 2023, when we were tipped off that CAD employees hadn’t received their paychecks. We also discovered that several months’ of employees’ retirement account deposits hadn’t been made.

On June 6, Monitor reporter John Ramos visited CAD offices and requested their financial disclosure statements, known as Form 990s. Federal law requires nonprofit organizations to provide their Form 990s to anyone requesting them.

CAD did not have their 990s immediately available. A CAD employee, Zach, said he would assemble the requested forms and have them ready for Ramos the following day.

The following day, Mr. Ramos returned to Community Action Duluth for the 990s. Unfortunately, he found that they were still not available. Apparently, Zach was not authorized to release the 990s. Only Executive Director Dudley could do that, and she was in a meeting.

Mr. Ramos left CAD empty-handed, telling them he would return for the 990s the following day.

After Mr. Ramos left, Executive Director Dudley called 911 and asked the police to trespass Ramos from the property.

The 911 call transcript follows:

Classie Dudley: Hi, I called … in regards to trying to get a gentleman trespassed …

911: Ok, is the person there right now?

Dudley: No, no.

911: Ok.

Dudley: But they said they were going to come back tomorrow.

911: Ok, um, where do they live?

Dudley: I am unaware of where they live. I have their number and their email [another voice heard in background] … Oh, actually, we know exactly where they live.

911: What is the guy’s name?

Dudley: John Ramos.

911: Ok, so he’s not there right now? Correct?

Dudley: No, he’s not here right now, but he’s come in, at least of what we know, twice within the last two days.

911: Ok.

Dudley: Um, very agitated [unintelligible] …

911: Ok, yeah. So if police don’t…they have to actually tell a person that they’re trespassed before it goes into effect, so if he’s—

Dudley: Yeah.

911: —not there right now, they can’t get him that information and they don’t have an address to go knock on the door of.

Dudley: Nope, we have an address.

Like many who call 911, Ms. Dudley used the opportunity to create a self-serving narrative. She was reading Mr. Ramos’s contact information directly off the business card he had left, but she did not mention that Ramos was a reporter, nor that he was requesting documents CAD was mandated to provide.

Instead, Dudley described a “very agitated” man who was repeatedly returning to Community Action Duluth for no reason.

The audio recording of Mr. Ramos’s visit to Community Action Duluth is posted below. The interaction features 2 minutes and 18 seconds of Ramos speaking with Office Manager Scott Yeazle about the 990 forms. As Ramos leaves, Mr. Yeazle says in a friendly voice, “Good to see you again”—managing to hide his terror incredibly well.

Today, the trespass order remains active. Mr. Ramos is prohibited from visiting Community Action Duluth property.

Board meetings are held on CAD property. This means that Mr. Ramos cannot report on board meetings.

Community Action Duluth has censored the press.

What about the 990s?

On June 8, 2023, Mr. Ramos filed a formal complaint with the IRS, stating that Community Action Duluth was not providing him with their 990 forms. As evidence, he submitted the audio recording of himself requesting the 990s and Community Action not providing them.

On June 18, 2023, Community Action Duluth provided their 990 forms to Mr. Ramos.

Chasing the minutes

Under Minnesota state law, community action agencies are required to follow the same data practices requirements as governmental agencies, which means that journalists and members of the public must be given access to the agency’s data when they request it.

Section 9.2 of Community Action Duluth’s bylaws further defines the materials they are obligated to provide the public:

A copy of the Charter, Bylaws, minutes of Board meetings, roster of membership, and financial records of the Corporation shall be open to public inspection and available at the principal office of the Corporation … All books and records of CAD shall be open for inspection by any individual upon request to the Executive Director … Books and records must be reviewed at CAD offices during normal business hours. Requests for reviews require five (5) days’ written notice and must be approved by Executive Director and/or designee.

These bylaws were adopted by a formal vote of Community Action Duluth’s board of directors in July of 2023. The board and executive director have refused to follow them ever since the Monitor began investigating this story.

On July 20, 2023, the Monitor filed a data practices request with Community Action Duluth, asking for board meeting agendas, board meeting minutes, a board member roster, and a schedule of board meetings.

As of publication of this article, 178 days have elapsed with no response to this request from CAD.

Mr. Ramos has sent Director Dudley and the board 8 follow-up emails during that period, reiterating his request and asking why they are not following their bylaws. He has received no response.

On Jan. 7, 2024, Ramos emailed Board Chair Shannon Redbrook: “I have never come across a board of directors who refused to tell me who they were … As of today, how many people are on CAD’s Board of Directors, and who are they? Please tell me.”

Ms. Redbrook did not respond.

Duluth City Councilor Azrin Awal is one of CAD’s board members. On Jan. 8, 2024, Mr. Ramos visited City Council chambers prior to the beginning of the regular City Council meeting and asked Councilor Awal if she could tell him the number of board members on CAD’s board of directors.

Councilor Awal refused to comment.

The other CAD board members the Monitor knows of are Cruz Mendoza, Melissa Grimes, Salaam Witherspoon and Thomas Motl. There have been recent reports of additional board members being added, but CAD refuses to verify the update.

The Monitor was able to speak with one active board member during this investigation: Melissa Grimes. Mr. Ramos encountered Ms. Grimes on Oct. 13, 2023, at CAD’s annual Dream Big fundraiser, which was held at Bent Paddle Brewing Co. Ms. Grimes was very friendly and open to talk.

Ramos asked if Grimes had been receiving his emails about CAD failing to provide him with requested materials. Grimes said she had.

John Ramos: Are you getting these emails that I’ve been sending?

Melissa Grimes: I did get an email, and I responded—not to you, but to the chair [Shannon Redbrook]. And I asked her if this issue had been addressed … So we had a meeting, and she … told me that the issue had been taken care of. And I was, like, ‘Okay!’ And then, like, two weeks later, I saw your email come through, that said it had been 43 days now [with no response to the data request], and I was, like—

Ramos: Yeah, it’s in the 80s now.

Grimes: —and I emailed her, the chair, just to say, hey, I thought this issue had been addressed. And she assured me … that the issue had been resolved.

Later in the conversation, Grimes spoke about the meeting where the board had discussed removing Alanna Oswald.

Grimes: I encouraged Alanna … to stand firm … Like, there was just so many accusations, and … I encouraged Alanna … not to let them remove her because of these accusations. I stood behind her in that, and we stood firm. Because it was just a lot. It was a lot … Alanna had been so dedicated to the board for so long, and so it was a lot.

On Jan. 8, 2024, Mr. Ramos filed a complaint about CAD’s non-compliance with the state Data Practices Office, in St. Paul. A representative of the office has indicated that she will reach out to Community Action Duluth to see if she can expedite matters.

The Monitor is hopeful she succeeds, as we have several more data requests lined up for submission.

Questioning OEO

Marcel Urman’s OEO monitoring report recommended that senior staff be fired and a board member dismissed from CAD, based on various unsubstantiated allegations.

On Sept. 25, 2023, John Ramos emailed Marcel Urman and Francie Mathes (Urman’s supervisor at the Office of Economic Opportunity) questions related to Urman’s report.

On Jan. 3, 2024, the OEO press office provided the Monitor with answers to some of our questions via email, but did not include any evidence to support their answers.

Monitor: Mr. Urman recommended that 2 senior staff members be fired for insubordination and 1 board member be removed from the board for engaging in ‘intimidation, slander and withholding pertinent information.’ Mr. Urman did not provide evidence or examples to support his accusations.

OEO Response: “The OEO monitoring report documented conversations held at the time of the meetings on November 2-3, 2022. All statements included in the report reflect the information collected and available at the time of the visit. Evidence and examples to support Urman’s recommendations were provided to the board at the time of the meeting, and the Executive Director provided emails between one board member and two staff relating to withholding reporting and funding opportunities to the board.”

Monitor: Does OEO have the authority to make such heavy-handed recommendations to its grantees?

OEO Response: “The Community Services Block Grant Act empowers states to develop rules and policies for oversight and administration of Community Services Block Grant-eligible entities. In Minnesota, the Office of Economic Opportunity makes recommendations to grantees on a wide variety of issues like concerns on the overall health of the grantee organization, in order to ensure high-quality programming for the people to be served in the community.”

Monitor: Why did Mr. Urman’s report fail to mention that the two employees whose terminations he was recommending had filed whistleblower complaints against Community Action Duluth a short time earlier?

OEO Response: “OEO is not aware of any whistleblower complaints against Community Action Duluth.”

Monitor: We have an email that Francie Mathes accidentally forwarded to us, where she is instructing Marcel Urman to “ignore” the Monitor. Is ignoring us still your policy?

OEO Response: “DHS staff are directed to refer reporters to the designated media relations managers, who manage the response. The email between colleagues was a shorthanded way to instruct staff to direct the reporter to the media relations manager, and could have been more clearly phrased.”

On Jan. 10, 2024, the Monitor sent OEO a follow-up inquiry. We provided copies of email correspondence which showed Katherine Mueller describing her concerns about the executive director to Mr. Urman and Mr. Urman acknowledging those concerns. We asked OEO if they were still maintaining that they had no knowledge of whistleblower complaints.

OEO response: “Minnesota’s whistleblower law (Statute 181.932) protects employees who report ‘a violation, suspected violation, or planned violation of any federal or state law or common law or rule adopted pursuant to law to an employer or to any governmental body or law enforcement official.’ OEO is aware of concerns raised by a staff member, but they included no violations, suspected violations, or planned violations of federal or state law.”

Wrap-up

After leaving Community Action Duluth, Lynn Habhegger, Katherine Mueller, Dawn Paquette, and Kyra Gustafson all quickly found new employment and seem to be doing well.

Alanna Oswald lost her bid for a third term on the Duluth School Board. She was last seen relaxing with a 25 x 25 Sudoku puzzle.

The staff of Community Action Duluth unionized in August of 2023 and are now represented by the American Federation of State, County, and Municipal Employees (AFSCME).

The board continues to ignore their bylaws, and Ramos continues to be trespassed from Community Action Duluth.

Members of the community who wish to learn more about nonprofit governance from Classie Dudley will have an opportunity to do so on Jan. 24. The cost of the class is only $150.

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Cover photo: Classie Dudley. Source: Community Action Duluth webpage.