Published: Sept. 30, 2007  
Stackhouse
About the series

Poverty Peddlers is the continuation of a Miami Herald series published in June that revealed sweeping problems at a celebrated biopharmaceutical park proposed in Liberty City.

The newspaper found that developer Dennis Stackhouse diverted more than $500,000 from the project through double billing and questionable expenses while paying a host of political insiders to rally support for the plan.

The nonprofit agency that sponsored the project - The Miami-Dade Empowerment Trust - was supposed to monitor the developer's spending, but no reports were produced nor were any audits conducted, the newspaper found.

After the series was published, Miami-Dade County leaders killed the deal and broke all ties with the trust, while local prosecutors began a criminal investigation. After three months, prosecutors charged Stackhouse last week with improperly bundling campaign contributions. The investigation into the project's finances continues, prosecutors say.

While the newspaper was investigating the biotech deal, it was examining dozens of other projects sponsored by the Empowerment Trust - the subject of the current series that begins today.

To report the stories, reporters reviewed more than 300 resolution files from the agency, culling through thousands of pages of memos, correspondence, receipts and contracts to track the trust's efforts in combating poverty.

The reporters also examined dozens of lawsuits and bankruptcy cases, property records, nonprofit tax filings from the Internal Revenue Service and thousands of documents from other county agencies, including the Office of Community and Economic Development.

To verify job numbers the trust filed with the U.S. Department of Housing and Urban Development, reporters sifted through hundreds of pages from 15 progress reports the trust submitted to HUD this year and compared them to the agency's own internal files.

The comparison showed that the trust created eight of the 310 jobs it claimed in reports to HUD.

Reporters also interviewed scores of small-business owners scattered throughout the county and visited dozens more.

To measure the effectiveness of the empowerment zone program, the newspaper analyzed 16 years of demographic data from the U.S. Census and Claritas, a private research firm.

Because the empowerment zone program uses geographic areas created by the U.S. Census Bureau - called Census tracts - to identify neighborhoods, the newspaper relied on data from Claritas, the only source for current tract-level data available.

Although Claritas does not rely on the one-in-six sample used by the U.S. Census to report economic statistics, it is cited by many academic, corporate and government papers as a reliable source of economic and demographic data.

In fact, the U.S. Government Accountability Office cites Claritas economic data in a September 2006 report to Congress regarding the status of empowerment zones nationwide.

As part of its analysis, the newspaper examined various economic indicators from the 1990 and 2000 censuses, including family poverty data, workforce and employment statistics and median household income.