Former Henderson City Councilwoman Vermillion draws scrutiny involving charity

Former Henderson City Councilwoman Vermillion draws scrutiny involving charity

By Molly Waldron. CREATED Jan 26, 2012

Las Vegas, NV (KTNV) -- The allegations ex-Henderson City Councilwoman Kathleen Vermillion has made against her ex-boyfriend, County Commissioner Steve Sisolak, came out after some very serious allegations were made against Vermillion herself.

They involve the charity she founded to help homeless youth.

A picture from the Nevada Partnership for Homeless Youth Facebook page is from happier times for charity founder Kathleen Vermillion and Executive Director Arash Ghafoori.

The smiles vanished on January 10 when Ghafoori filed a formal complaint with the state attorney general alleging "fraud, collusion and mismanagement."

He accuses Vermillion of misusing the charity's funds, and the board of being "unwilling or unable to take action against her."

The Attorney General confirms they are investigating, but won't say anything more. Neither will Ghafoori or Vermillion.

But Greg Esposito, the charity's former treasurer, will.

"I think the allegations against Kathleen are overblown and they're overstated," Esposito said.

Esposito's name comes up in Vermillion's defamation lawsuit against Sisolak, but without any context as to why. She says in the complaint he's friends with Sisolak, and also that he "resigned amid allegations that there were some irregularities relating to Nevada Partnership for Homeless Youth -- or NPHY -- finances."

"I don't think she's throwing me under the bus," Esposito said. "I think it was...I think it's the wording that can be interpreted in two ways.  I resigned during a time that people were making allegations of financial impropriety.  It was a timing thing."

Esposito says he's never been accused of any financial impropriety and that he resigned because the allegations against Vermillion were getting out of hand and obscuring his ability to do his job.

"It was becoming a battle of he said/she said and 'I'm gonna go to the press' and 'I'm gonna launch this investigation' and it was taking up a lot of time," Esposito said.

However, he did have questions about the charity's finances.

"I can't say improprieties because the expenses that I saw may have been completely justifiable," Esposito said. " We were never given the opportunity to ask the questions, was this right?  Was this approved?  What was this for?  We were never given the chance to fix what we would have liked to have seen fixed."

He says Ghafoori took it out of their hands by filing this complaint with the AG. In it, Ghafoori accuses Vermillion of preparing to spend $51,000 on an upcoming 2012 trip to a San Diego resort and spa for NPHY staff, their family members and clients. The trip was to include five nights in the presidential suite for Vermillion's use at a cost of $28,000. It's something Esposito questioned.

"Your family's having hard time, you don't go on your beach vacation," Esposito said. "Maybe you just go to the amusement park.  Maybe you just go camping, something like that.  It was a suggestion I threw out there but unfortunately I resigned before it got acted on."

Contact 13 has learned the trip was canceled after Ghafoori blew the whistle to the AG. In the complaint, Ghafoori also questions Vermillion's salary - $110,000 in 2010 and $230,000 in 2011.

"She wasn't paying herself. The board was paying her," Esposito said. "The board was making those decisions.  And yeah, that salary was approved by the board."

Ghafoori accuses Vermillion of using the charity's money for personal expenses including ATM cash withdrawals, phone calls, travel and medical and/or therapy expenses.

"I think these allegations... Kathleen never had a chance to address these as to whether they're truthful or not," Esposito said. "This is one man's statement from what he saw."

We've given Kathleen Vermillion multiple opportunities to address the allegations, but through her public relations firm, she's refused to talk to us. NPHY issued a written statement late Wednesday saying Arash Ghafoori--who's been on paid leave--has been re-instated as executive director and "has the full support and faith of the board of directors." They say they are conducting "organizational and financial audits in order to leave no stone unturned."

"It didn't' need to rise to this level.  It didn't need to hit the media," Esposito said. "It didn't need to get this big."

Esposito says his main concern in all this is for the charity.  He's concerned that all the mudslinging and the negative publicity will adversely impact the charity's ability to fulfill its mission which is serving Nevada's homeless youth.

The charity claims its services have not been affected by recent situations and that it continues to serve youth in crisis. The Attorney General won't say how long their investigation may take.

Later, Contact 13 also learned that Esposito's girlfriend works as Kathleen Vermillion's secretary. We have not been able to confirm whether Vermillion is stepping down from her work with the charity.