Records Show Lavish Spending By Bankrupt Charity

Charity Managed In Part By City-County Councilor

New documents obtained by 6News Friday show a pattern of lavish spending by an Indianapolis-based charity now deeply in debt and missing as much at $1.5 million.

City-County Councilor Paul Bateman, who, according to the Russell Foundation's Web site, serves as its chief operating officer, is among those within the organization now being investigated by a grand jury, 6News' Jack Rinehart reported.

Last week, Marion County grand jury investigators served search warrants on the headquarters of the Russell Foundation and at the Carmel home of Manuel Gonzalez, named on the foundation's Web site as its chief financial adviser.

Gonzales declined an interview with Rinehart Friday, but stated in a letter that he was under no formal grand jury investigation and that his volunteer experience with the Russell Foundation had been disappointing.

Court records show grand jury investigators seized computers, IRS records, credit card statements and other business documents.

The Christian-based not-for-profit -- which lists its mission as trying to develop rail- and ethanol-related economic ventures that benefit minority workers and contractors -- has declared bankruptcy.

According to the bankruptcy declaration obtained by 6News Friday, the foundation had racked up more than $2.5 million worth of debt.

Records show the foundation's financial officers signed off on credit card bills of $106,000, including $36,000 for office rugs.

The foundation also owned 17 vehicles, including a $50,000 Cadillac Escalade, and maintained offices in a southeast side business park on lakefront property.

Authorities are also investigating missing funds that could total as much as $1.5 million, according to court records, Rinehart reported.

The foundation's attorneys released a statement Thursday afternoon saying Bishop Michael Russell himself initiated the investigation.

"The Russell Foundation and Bishop Michael Russell welcome the investigation by authorities into the disappearance of hundreds of thousands of dollars from Foundation bank accounts during 2006 and 2007," the statement reads. "The Foundation initiated the request that this matter be fully investigated, and will continue to provide full cooperation with the investigators assigned to the case."

Bateman spoke from behind his door to Rinehart Thursday afternoon. He said he couldn't comment on the Russell Foundation but that he had done nothing wrong.