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Follow the Money, an Investigative Report

Follow the Money, an Investigative Report

Posted - Dec. 1, 2004 at 5:27 p.m.



This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.

Debbie Dujanovic ReportingRep. Steve Mascaro (R), West Jordan: “The public needs to know how their dollars are being spent. It isn't my money, it isn't the state's money, it's the public's money."

Six-figure salaries, six family members at the top of the pay scale. Tonight Eyewitness News Investigates how one Utah Family is using millions of your tax dollars.

The family's non-profit gets funding from the Utah Department of Human Services and runs group homes for disabled clients. According to the state, the family-run non-profit passes all of its home inspections. The state says the patients the non-profit serves are well cared for. But at what cost?

Public documents paint the financial picture. A Utah non-profit called TKJ has received 22-million of your tax dollars over a five year period to take care of clients, public money paid out by the Department of Human Services.

TKJ cares for disabled patients who live in group homes like. This year, TKJ says it will help 102 clients.

James Jensen, Director of Professional Services, TKJ INC.: “We pride ourselves in providing quality services. We pride ourselves with being reputable and honest in our dealings.”

In fact, no one suggests that TKJ offers anything but a good service for its clients. The question is, are state regulators paying enough attention to what non-profit agencies do with public money once it leaves the state?

Representative Steve Mascaro oversees Human Services appropriations.

Rep. Steve Mascaro, Vice Chairman, Health and Human Services: “It’s the public’s money and we’ve got to make sure that the public’s money is being spent on public service programs in a meaningful way.”

For example, take a look at salaries. We obtained TKJ's tax filings from the IRS. Here are the salaries for one year. The Executive Director is Terry Jensen. Jensen, his two sons James and Jeffrey made over six-figures, Terry's wife Karen, a mother-in-law Marian Hunt, and daughter Jennifer, are also listed at the top of the non-profit's payroll. Jennifer made $75,800 a year as an office manager.

Jensen says all salaries are based on long hours and qualifications.

We compared the Jensen's salaries with a 2004 National survey. CEO's who run non-profits with similar-sized budgets make between 86 and 88 thousand a year. In this case, the Executive Director of TKJ and his two sons each make more than the Doctor who runs the Department of Human Services.

We should point out, all of this is okay with the state of Utah

Debbie Dujanovic: “You’ve never been told that your dad can’t make $160,000 a year, your mom can’t make $95,000 a year, that you can’t take home $123,000, your brother can’t take home $123,000 a year.”

James Jensen is speaking on behalf of TKJ, while his parents are on an extended personal leave from the company, but remain on the payroll -- at $300,000 for 18 months. They gave us a spreadsheet to show they've earned enough leave or vacation time to justify the pay. State auditors who have reviewed TKJ admit the salaries are 20 percent higher than other comparable non-profits.

Carol Sisco, Department of Human Service: “We went through five years of financial data, looked at all the state and federal laws, and there really isn’t anything we can do about the size of the salaries.”

Aside from salaries, the state also allows non-profits to use state money in other ways. With few strings attached in the case of TKJ, the non-profit's records show loans totaling about 3 million dollars, to their father's real estate holding company, called J-Quad. Public documents show JQUAD uses the money to buy homes for TKJ's disabled clients to rent.

In an email a spokeswoman for TKJ wrote to us, “JQUAD borrows money from TKJ in the same manner it would from a bank or other financial institution.” TKJ says the loans are a good deal for the state, because the money produces a better return from interest paid than it would in an investment account.

State officials point out in the recent audit they are aware of the relationship between the non-profit TKJ and the private company J-Quad, but government auditors admit they've never closely examined the millions of dollars of loans, involving the purchase of 28 properties.

James Jensen, TKJ Inc.: “We laid this entire thing out to the state of Utah. They did an audit on it. The findings speak for themselves.”

The day we interviewed James Jensen he told us family members who work for the non-profit are taking a 16.5 percent pay cut overall, cue to cuts in contracts. In the meantime, Representative Mascaro who we interviewed for this story, says he wants to ask more questions, because a lot of taxpayer money is involved.

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