Sen. Justin Wayne introduced and has been the driving force behind a bill that will soon deliver hundreds of millions of dollars to North Omaha and other low-income neighborhoods in the city and state – an unprecedented infusion of cash.
A few months before introducing the bill, Wayne filed paperwork for a nonprofit, Sankofa Development Corporation, which morphed last year into the Sankofa Innovation District, now led in part by Wayne’s friend and fraternity brother.
Sankofa Innovation District would receive $40 million – the single largest grant awarded – if the Legislature approves a plan drafted by an outside consultant.
In a series of interviews over the past week, Wayne, an Omaha Democrat, has said he has no current involvement with or financial interest in the company that applied for grant funding. He confirmed that he incorporated the original version of Sankofa but also said he did that work pro bono. He and others, including Sen. Terrell McKinney, who along with Wayne represents most of North Omaha in the Legislature, argued that Wayne’s connection to Sankofa isn’t a conflict of interest.
“The organization that applied is not the organization that I incorporated,” Wayne said.
Former lawmaker John Stinner, who chaired the Legislature’s Appropriations Committee when Legislative Bill 1024 passed, and a political science professor both told the Flatwater Free Press that Wayne disclosing his relationship upfront would have been a good idea.
When funds enter a senator’s district, it’s common for that senator to have a relationship with someone involved, said Stinner, a Republican from Gering.
“That should not take away from the fact that they may be best served to execute the plan, as long as it’s fully disclosed and everybody understood going in that that was the relationship that you’re having to deal with,” Stinner said.
The bill, called the Economic Recovery Act, passed the Legislature almost unanimously in 2022, sending $335 million in Federal American Rescue Plan Act and state dollars to areas like North Omaha, South Omaha and other areas hit hard by the pandemic.
Much of that money was set aside for a grant program overseen by a special committee. The law specifies that the committee be led by the senator who chairs the Legislature’s Urban Affairs committee – last year, that was Wayne. Now, it’s McKinney.
The special committee recommended the Legislature hire Nebraska engineering and design firm Olsson to create a plan for using the money, which involved workshops with stakeholders and public hearings.
In August 2021, Wayne, a lawyer, signed incorporating documents for “Sankofa Development Corporation.” Then, in January 2022 – the same month he introduced the bill – Wayne signed incorporating documents for a nonprofit with a slightly different name: “Sankofa Economic Development Corporation.”
Wayne said he had the original idea for a concept using the word Sankofa but was busy. He told friend and fraternity brother Victor Beanum about it, which Beanum confirmed with Flatwater Free Press. Beanum loved the name and asked Wayne to incorporate it for him, he said – work Wayne said he did for free.
When it became clear Beanum and others involved with Sankofa were interested in grant funding, Wayne said he told them he wanted nothing to do with it and they should start their own, new company.
Beanum, now a board member of Sankofa, said Wayne is not involved. He and Wayne said the “Development Corporation” and “Innovation District” are completely separate efforts. The corporation was focused on real estate use, Beanum said, while the Sankofa Innovation District is “a virtual hub for small business, entrepreneurship, and innovation.”
But state paperwork suggests that the two ideas are linked.
Amended documents for Sankofa Economic Development Corporation were filed Sept. 29, 2022, without Wayne’s name associated. On Oct. 21, the same four people that signed that documentation signed articles of incorporation for “Sankofa Innovation District.”
State paperwork for both entities lists the same primary function: “to restore value to the community by directly and indirectly acquiring, developing, and selling vacant and abandoned properties in cooperation with stakeholders and residents for the benefit of the community.”
The state received 367 applications for funding. Each was given a unique ID number and evaluated using a rubric approved by the special committee that Wayne chaired, according to Olsson’s report. The applications were reviewed three times and also scored according to economic impact.
According to its grant application, Sankofa Innovation District plans to create a centralized hub “for innovation, entrepreneurship, and high paying jobs” at 16th and Locust Street. The wide-ranging set of efforts and partnerships estimated a total budget of nearly $458 million and requested almost $139 million in grant funding.
“More than just ‘a building’ or ‘a campus’ the Sankofa Innovation District (‘Sankofa’) will be the mecca of entrepreneurship and innovation (E&I) in the Midwest,” the application reads. “… At Sankofa, we’re building and championing a place and an idea that, hundreds of years from now, history will celebrate as changing the world and forever improving human conditions both in North Omaha and around the world.”
Martin Williams, the Innovation District’s incorporator and president of its board, could not be reached for comment. Michael Piernicky with Olsson said the contractor was told by the special committee to direct all media requests to McKinney’s office.
Sankofa was recommended to receive far more funding than any other proposal in North Omaha. The next-biggest North Omaha recommendation was a $20 million project submitted by the Omaha Economic Development Corporation, one of two projects from that organization that Olsson recommended funding. In South Omaha, Olsson recommended that Southside Redevelopment Corporation receive $39 million for a project.
Wayne said he has been no more involved with the current Sankofa organization than he has with other groups interested in funding. He confirmed that he has spoken to Sankofa Innovation District board members and other entities involved with the idea – Creighton University, for example – and encouraged them to come together, he said.
He and McKinney did the same thing with South Omaha leaders, Wayne said.
In an interview this week, Wayne initially said he would declare a conflict of interest and not vote on a bill if it’s specific to LB 1024, to avoid any perception of a conflict.
Later the same day, he said he didn’t see why he would declare a conflict, given he has no financial stake in the company and it’s a separate entity from the one he helped. McKinney agreed that there’s no conflict.
”If people in the community feel like I shouldn’t, I won’t vote on it,” Wayne said. “But I don’t know why.”
The proposed $40 million to Sankofa and other projects are still several steps from actually being funded. The funding recommendations will become a bill that goes through the typical lawmaking process, including deliberation by a committee, any potential changes to the bill, and finally votes by the full Legislature. Wayne is no longer the chair of that committee, but was recently appointed as a member.
Both Wayne and Ja Keen Fox, a community advocate, suggested that Wayne himself and the funding effort are receiving extra scrutiny. Fox emphasized that it’s because much of the funding is flowing to North Omaha, a historically Black area.
Fox said he has heard North Omaha community members raise questions about the grant process similar to the questions Flatwater Free Press asked for this story. Fox did not directly apply for funding, but has helped groups who did apply and is in touch with Wayne and McKinney.
“There’s always an elevated need to be pristine and perfect in the way that Black people operate in America, specifically in conservative states like Nebraska,” he said, referring to the level of scrutiny on Wayne’s relationship to Sankofa and also the selection process, generally.
“This is a symptom of that larger, systemic paternalism kind of thing,” Fox said. “That we need to be removed from our own processes for it to somehow be fair.”
Stinner said he would be “shocked” if there was an actual conflict of interest. There was ample discussion about such conflicts last year during debate, he said.
“I would think that Justin Wayne would be particularly careful – along with any other senators sitting on that oversight (committee) – be particularly careful not to have some kind of self-dealing,” Stinner said.
Ari Kohen, a political science professor at the University of Nebraska-Lincoln, said that Wayne’s explanation – that he incorporated the documents for a friend – makes sense on its face. But, in politics, appearances matter.
“It’s very hard on the first blush to know whether it’s a serious problem or the appearance of a problem,” Kohen said, and it’s further complicated by the fact that Wayne had a hand in setting the parameters that led to the selection of the group.
“I would want to see a statement from him as they went into that committee’s work saying, ‘Full disclosure, I’ve been involved in the incorporation of an organization that might want to do this,’” Kohen said.
Fox said he believes Wayne and McKinney have handled this expertly, but also sees opportunities for transparency to address community anxiety around the funding.
One question in the community: Who or what is Sankofa?
Fox said even he hadn’t heard of the effort before it was recommended to receive the $40 million grant.
He said he’s talking to Wayne and McKinney about organizing an informational meeting where organizations with recommended projects present their proposals to people in North Omaha.
“I think for it to be so new to get this amount of investment is a scary thing,” he said. “… I think the community is rightfully wary, and that’s whose anxieties we should be prioritizing, especially in this moment.”
Important story and well reported. Thank you for a little more daylight on important topics!
Was there this much scrutiny regarding the Paycheck Protection Program[ PPP] at the beginning of the pandemic in 2020? Heard that Pillen Family Farms returned a significant sum after Jim decided to enter the governors race. Hope the immigrant labor was compensated adequately.
When one regularly reads of the conflicts of senators and their business and investments, this work by the Senator is nothing. E.g. Ricketts investments in China and North Korea.
Was this reported in the World Herald, or the Journalstar?
Conflict of interest by a state senator, I’m taken a back, wonder what or who is behind the hit piece.