Philly nonprofit execs spent millions on golf, art, Sixers tickets, and sketchy contracts. No one has been held accountable.

Community Council Health Systems has anchored West Philadelphia’s Mill Creek neighborhood for decades by providing mental health care and drug treatment to low-income adults and youths.

But behind the scenes, the 68-year-old, publicly funded nonprofit was systematically plundered by its top executives for years, according to an internal investigation.

About $5 million was allegedly misappropriated — into questionable contracts awarded to a maintenance company owned by the nonprofit’s leaders, and extravagant purchases made with company credit cards for travel, art, golf, even $84,764 worth of 76ers tickets.

Executives of the $12 million nonprofit also created a real estate holding company and used it to quietly sell off a beloved community tennis center, built on donated public land, to a developer for more than $1.5 million.

» READ MORE: A North Philadelphia community center ended up in the hands of a developer

And yet, for years, despite publicly filed tax returns and audits that showed an organization in financial distress and pointed to the potential for fraud, none of the board members, city funders, or state licensing authorities took action.

Even after the nonprofit’s chief executive, Joseph Watkins, commissioned an investigation and reported the concerns to the Pennsylvania Attorney General’s Office, no one was held accountable, court records show.

Watkins urged the attorney general to remove the two remaining board members. Instead, the board fired him as president and board member last August.

Then, the board members reached their own agreement with the office. According to the agreement, filed in Commonwealth Court, the attorney general alleged that board members Chuck Grant and Tammy Worsley had violated the law by failing to prevent $2.7 million in improper spending — but agreed to not hold them liable.

The deal enabled them to deny wrongdoing. They resigned, but were permitted to elect their successor, who notified Watkins in writing that his position had been terminated.

Grant, of Ormond Beach, Fla., did not return calls. Worsley of Bear, Del., hung up when contacted by a reporter.

Watkins’ lawyer, Richard Glanton, describes the board’s maneuver as a cover-up of a corruption scandal — and said board members have sought to sell off Community Council in order to bury the investigation. After Watkins refused to go along with a sale, its members turned on him, Watkins’ lawyer said.

“It’s a really brazen effort by the attorney general to be complicit in the scheme by the people they say breached their fiduciary duty,” Glanton said.

The Attorney General’s office said it would not comment on its handling of the case.

Ed Cyran, a lawyer hired by the two board members to represent the Community Council, said there are no plans regarding a sale. He said new board members are expected to be elected, but declined to answer specific questions about the nonprofit’s future.

He said Community Council Education Services, which runs a publicly funded private school for Philadelphia children with behavioral challenges, “continue[s] to operate on a normal basis.”

He declined to answer questions regarding the termination of Watkins’ position.

The extravagant spending raises larger questions about oversight of the network of mental health and drug treatment nonprofits that collect more than $1 billion of federal health care funding in Philadelphia every year. Those organizations, which include Community Council and dozens of others, are licensed by the state Department of Human Services (DHS), but paid through the city-contracted nonprofit Community Behavioral Health (CBH).

The allegations bear striking parallels to a scheme that led to the 2018 conviction of the heir to a Philadelphia political dynasty, Renee Tartaglione, for embezzling millions from another CBH-funded mental health clinic, in North Philadelphia.

Laura Otten, a nonprofit consultant and former director of La Salle University’s nonprofit leadership graduate program, said it’s clear that multiple layers of oversight failed.

“You have to put the blame or responsibility at the feet of the board,” she said. They were supposed to commission and approve annual audits. “Where was the board?”

She said that CBH, the primary funder of the West Philadelphia mental health nonprofit, should also have provided closer scrutiny.

A CBH spokesperson declined an interview regarding how millions of dollars could have been siphoned from Community Council.

Instead, the spokesperson said in a statement that CBH has a “rigorous oversight and monitoring system” in collaboration with state DHS and the attorney general. A DHS spokesperson said its oversight is only programmatic, “to ensure care and services are in compliance with regulations.”

Philadelphia City Councilmember Jamie Gauthier, who represents the district served by Community Council, said she worries about the potential impact on “an underserved neighborhood.”

“I am very concerned about the real possibility that this situation will lead to a disruption or cancellation of mental health services,” she said. “I urge all parties to do everything they can to ensure the community continues receiving the medical services they desperately need.”

The disarray at Community Council was more than a decade in the making, going back to when the previous chief executive, James V. Nixon Jr., took the helm.

Nixon had been on the board of the nonprofit, but had worked in banking, most recently as senior vice president at Commerce Bank. He became available for the nonprofit’s CEO job while dealing with allegations that he had embezzled $15,904 at Commerce. In June 2009, Nixon signed a consent order with the U.S. Comptroller of the Currency, agreeing never to work in banking again.

As CEO of Community Council, Nixon took over an organization with few financial controls, according to an investigation completed in 2022 by law firm Cozen O’Connor and accounting and consulting firm RKL.

In nine years, Nixon put more than $1 million on his company American Express card, according to the audit, including: $244,371 worth of art; $375,500 in meals, limos, hotels, and travel; and $108,447 on golf.

With two other Community Council executives, George Banks and James Paige, Nixon started a for-profit company called Salveo LLC that received more than $2 million from Community Council.

A lawsuit filed last year on behalf of Community Council contended that Salveo existed solely to extract money from the nonprofit. “Salveo provided little, if any, services,” the complaint alleged. “And the services that were provided were performed mostly by salaried employees of [Community Council].”

Nixon and Banks also set up a nonprofit, Olympia Real Estate, that in 2009 paid $400,000 to purchase the nonprofit Althea Gibson Community Education and Tennis Center. Within five years, they closed the center and sold the property to a developer for $1.55 million.

Though the property was built on donated Philadelphia Redevelopment Authority land — and deed restricted for civic uses through 2026 — it has since been redeveloped into luxury apartments.

Nixon, who died after a sudden illness in 2021, was mourned as a visionary arts benefactor.

Banks died in 2020. Paige, who retired in 2019, said that Salveo was created to provide cost-effective maintenance services. He said he was not involved once Salveo “went in a different direction.”

The audit found that Paige had also spent $244,330 on his company American Express card; and that he, his ex-wife, and his son had received consulting contracts from the nonprofit worth nearly $650,000 all together.

Paige, the former director of operations, disputed the Amex bill. He said the contracts were legitimate. “I’m sure it creates an appearance of impropriety, but services were provided,” he said.

However, Paige said, misappropriations under Nixon were an open secret.

“He basically used Community Council as a personal piggy bank,” Paige said.

Paige said the board was Nixon’s “handpicked people,” which discouraged whistle-blowers. “Plus, it became a question of proving it. We saw the art, and there were plenty of rumors, but nobody who could substantiate it ever stepped forward.”

The largest share of art purchases on Nixon’s company American Express card — $85,000 — went to Galerie Marie in Collingswood, according to the audit. Owner Kimberly Camp, a painter, sculptor, and arts administrator, described Nixon as a friend and “an avid art collector who collected my own work personally.” She said that, as a small-business owner, she had no reason to question his purchases.

Now, Nixon’s estate is suing the nonprofit — seeking not only unpaid wages and benefits, but the art collection and sports memorabilia that remain in Community Council’s possession.

Nixon’s widow and her lawyer did not return phone calls.

Years before Nixon’s death, signs of trouble at Community Council were becoming visible — on publicly filed financial records and court dockets, and in state inspection reports.

A routine 2017 audit filed with Community Council’s federal tax returns, for instance, found significant irregularities within the nonprofit’s financial records: Accounts were not being reconciled, and spending decisions and financial oversight were being performed by “the same individual.” Fuzzy record-keeping and lack of independent oversight led to increased risk of “misappropriation of assets,” the report concluded.

The Pennsylvania Department of Labor and Industry filed more than a dozen liens against the nonprofit in the last decade, seeking close to $1 million in unpaid unemployment taxes.

And the nonprofit’s tax returns showed that the board — which under best practices should have included about a dozen people, according to Otten, none of them on the payroll — had dwindled to three or four independent board members, plus a number of Community Council staffers. Watkins — a pastor and media personality who was previously the controversial receiver of the Chester Upland School District — was one of those board members. But he claimed in court documents that before taking over as CEO he was in “inactive status,” because he’d informed Nixon he didn’t have time to be a board member.

The tax returns also showed the nonprofit losing money — more than $1 million a year.

The most recent publicly available audit, from 2020, said there were questions about hundreds of thousands of dollars in city special education money for the Community Council Learning Academy, because proper accounting practices weren’t followed.

According to Paige, the former executive, the financial woes were evident in every aspect of Community Council’s operations.

He said maintenance of the building had been deferred for years. Also, the nonprofit eliminated employee benefits such as subsidized health insurance and retirement accounts. The organization was chronically short-staffed, leaving the remaining employees to handle multiple jobs, he said.

“All the soft costs that most businesses would have, we as employers in the later years of my being there didn’t have any of those things.”

Pennsylvania DHS, which licenses and inspects mental-health care and drug treatment providers, repeatedly cited Community Council in recent years for failing to properly maintain patient charts and treatment plans, and for failing to properly supervise its treatment providers. In 2023, the state found that three of eight newly hired mental health staffers working at a Community Council program did not possess minimum educational requirements.

After Watkins took over as Community Council’s CEO in 2021, he stabilized the organization’s finances, obtained $3.85 million in federal Paycheck Protection Program loans, and won a $900,000 state grant to refurbish the nonprofit’s building, according to Glanton, his lawyer.

In the nonprofit’s 2020 audit, the first filed in three years, Watkins promised a new era of transparency, and said that a new accountant and controller were getting the finances in order.

He also oversaw an aggressive litigation strategy. He sued Salveo as well as Paige, and filed malpractice lawsuits against the nonprofit’s previous lawyer and its accountant.

Since December, though, staff at Community Council, staff have been working through chaos.

Last month, they received a volley of conflicting memos, including one notifying them that the nonprofit had been turned over to a crisis manager, Howard Brownstein — and another from Watkins, who said he was not stepping down as CEO. Finally, Cyran got an injunction barring Watkins from the organization.

Watkins, for his part, has filed a petition in the Philadelphia Orphan’s Court seeking $3 million in damages from the outgoing board members. According to Watkins’ court filings, before he was fired the board members pushed him to approve a sale to a larger mental health care provider. In his view, that would be a blow to the community.

Paige confirmed that similar talks were underway years ago, when he was at Community Council. A sale, he said, “would have provided a certain amount of relief” and much-needed financial accountability — but Nixon had blocked it, according to Paige.

Brownstein, the crisis manager in charge of the nonprofit, declined an interview.

In an all-staff email, he said he would elect several new independent directors “whose talents and experience will lead CCHS toward strong financial and administrative footing.”