A Hackney councillor failed to manage a “conflict of interest” between a charity and his estate agency, a Charity Commission report has found.
A homeless man was referred from Michael Desmond’s charity, House the Homeless, to estate agency On the House, also owned by the councillor.
Desmond, the former speaker of Hackney Council, set up the charity to provide support and information for homeless people.
The report released by the Charity Commission was responding to a complaint filed in March that Desmond’s “involvement with the charity was benefitting his private interests”.
However, the report also recognised that the rent paid by the former homeless man was significantly less than what would have been charged under a private rental.
The report found that the two organisations were not acting independently of each other. They were operating from premises owned by Desmond and the charity’s phone-line was run by a joint employee of the estate agency and the charity.
Some trustees were also found to have little experience and knowledge of running a charity and charity law.
Desmond previously attributed complaints to the “nimbyism” of certain residents who were uncomfortable with formerly homeless people moving in next door.
In response to the report, Desmond told the Hackney Citizen: “The report seems innocuous enough, although trustees need to take cognisance of it. I was never a trustee and stepped down as a co-ordinator six months ago and the charity found alternative accommodation to avoid a possible perception of a conflict of interest.”
“There had been total transparency and no complaints from any homeless people we helped. Whilst speaker, I helped to raise almost £29,000 for other charities.”
The charity has since confirmed that it no longer refers any beneficiaries through the estate agency and has now established its own phone-line manned by volunteers.
Trustees of the charity will need to report any progress to the commission by March 2015.