The fall-out from a federal investigation finds an inner-city program designed to help kids, going into the new year with a huge dent to its bottom line.

Omaha Mayor Jean Stothert’s office telling NCN, the city has suspended $341,500 from Police Athletics for Community Engagement, commonly known as PACE.

At the same time the group wants you to know that raising money is a yearly “struggle.”

NCN follows the money that has found investigators going through the home of one top city official.

[View our video report above and check back for a complete transcript]

Also, note the statement below from the PACE Board of Directors, concerning its Executive Director Rich Gonzalez.

NCN has examined PACE’s 2020 990 IRS report which at that time found Gonzalez making $94,000 annually.

Here’s the PACE statement:

December 21, 2022: 

The PACE Board of Directors takes any allegation or inference of wrongdoing very seriously. We have placed Rich Gonzalez, Executive Director of PACE, on leave until further notice, effective December 19th, 2022. In the interim, the organization’s founder and current development director, Tony Espejo, will serve as acting Executive Director under the direct and full oversight of the Board. The Board is presently not aware of any actions that would be improper but is cooperating fully with the authorities to resolve this matter.


PACE Website Video: “How do you improve the quality of life for the entire city? Here’s a proven program for 16 years, 31,000 kids”

PACE, a North and South Omaha non-profit aimed at keeping kids, largely black and Hispanic, in sports and out of trouble is now part of a federal investigation.

Police Chief Todd Schmaderer recently noting he’s “Concerned that PACE may have been used for criminal activity.” That concern, likely financial, following several federal search warrants served in Omaha.

Including one, right here at the south Omaha home of City Council Vice President Vinny Palermo, who has refused to comment.

But in September, Palermo asked the council and got more city money for PACE, an added $26,000 for 2023.

Palermo (Sept 13, 2022): “For me it always goes back to the kids.”

But that money and more is now in limbo.

Mayor Jean Stothert recently announcing, “Until the conclusion of the investigation, all city financial support to PACE is suspended.”

And NCN has learned that support is significant. For 2022 PACE was scheduled to receive $100,000. Most has already gone out but now $35,499 is on hold.

For 2023 the city budgeted another $100,000 for PACE, add in the Palermo $26,000 and PACE is wondering if and when it will receive that $126,000.

Other government money also in question is the federal government’s ARPA dollars, COVID cash, over $100 million distributed by the city.

Stothert: (June, 2022) “We spent a lot of time, a lot of people working on this to make sure we were getting the money out where it was needed the most.”

All told PACE was in for $360,000, half in 2022, half in 2023. PACE has received the $180,000 for 2022, but that remaining $180,000 is also on hold.

Some community leaders are upset with the suspension of city funds, which PACE heavily relies upon.

PACE Website Video: “It’s a struggle every year to make sure we have enough money to accommodate a free program.”

According to IRS records, in 2020 PACE had expenses totaling nearly $800,000.