Financial problems of Churchill entrepreneur were never scrutinized
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In 2006, Internet entrepreneur James H. Rossell III was having financial problems. A bank sued him for falling behind on the mortgage of his Churchill home and a court froze his bank account to seize the assets for child support.
Even as those proceedings played out, a Greene County nonprofit organization -- oblivious to Mr. Rossell's woes -- planned to hand him a $500,000 state grant for his start-up company, Gravity Web Media.
Donald Chappel, executive director of Greene County Industrial Developments Inc., said that at the time he sought the grant money from the state Department of Economic Development he had no idea about Mr. Rossell's financial circumstances.
When he was turned down for trying to tap a nonprofit state fund on behalf of Mr. Rossell's for-profit company, Mr. Chappel successfully reapplied on behalf of his own corporation, which then struck a deal to put the money in Mr. Rossell's hands -- a deal that the state says should have been disclosed at the time but was not.
How the grant was spent by Greene County Industrial Developments and Gravity Web Media is the subject of a new state audit launched because of questions raised by the Pittsburgh Post-Gazette. The state economic development agency anticipates auditors will complete that review this week.
Mr. Chappel -- who called the situation with Mr. Rossell "a nightmare" -- has been unable to account for $84,000 of the $243,000 spent through the grant.
"I'm human. I made a mistake," Mr. Chappel said last week.
A look at how taxpayer money funded Mr. Rossell's company shows lax oversight by the development corporation, poor record-keeping, and the influence of politics in delivering grants.
Mr. Rossell said Michael Manzo, former chief of staff for Democratic Rep. Bill DeWeese, first brought up the availability of state grant money for Gravity Web Media during a meeting at the Downtown Pittsburgh offices of Gravity Web Media's law firm, Tucker Arensberg. Then-Tucker Arensberg lobbyist Robert Vescio introduced Mr. Rossell to Mr. Manzo. Mr. Chappel was there, too, as Greene County is part of the district represented by Mr. DeWeese, the former House Democratic leader.
First Published February 21, 2010 12:00 am
