The Urban League of Metropolitan Seattle "did nothing wrong" in its dealings with a Seattle Public Schools small-business contracts center now at the center of a financial scandal, its new leader said Wednesday.

Breaking a week of near silence, the new leader of the Urban League of Metropolitan Seattle said Wednesday his organization “did nothing wrong” in its dealings with Seattle Public Schools’ small-business contracting center.

Tony Benjamin, acting chief executive of the civil-rights and community-service organization, called a news conference to rebut what he called “innuendos” surrounding a state audit that questioned $595,000 the Urban League received from the school district over a four-year period.

“The auditor’s report clearly states that the Urban League did nothing wrong, and so we wanted to set the record straight that we have done nothing wrong,” Benjamin said.

State auditors criticized the Urban League’s invoices provided to the school district as vague and lacking in detail. Some district employees and a consultant told auditors the spending did not benefit the school district.

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In an interview, Benjamin said his organization provided all the documentation the school district required. He said auditors performed only a “cursory review” of district records and never asked to see the Urban League’s additional documentation proving that work was done.

However, state Auditor Brian Sonntag’s office partially disputed Benjamin’s account. Sonntag’s office pointed to interview notes indicating auditors requested additional records from the Urban League about one of its subcontractors, the Platinum Group. The Urban League did not provide any records, the Auditor’s Office said.

Auditors also questioned the Urban League’s charges of up to $15,000 a month for “general overhead and administration.”

Benjamin said the Urban League charged for the time staff spent on school-district work — such as meeting with minority firms about possible construction contracts on school renovations. He said that, contrary to the audit’s accusation, the Urban League could document that work.

“Ease of accounting”

The state audit also questioned Urban League invoices that charged identical dollar amounts for several unrelated services. For example, in April 2006, the school district was charged $1,621.88 for “service provider,” $1,621.88 for “technical support” and $1,621.88 for “project coordinator.”

Benjamin acknowledged that in 2006, his organization would just take the total amount it was charging the district and divide it up into categories “for ease of accounting.” He said that subsequently the organization has taken more care to specify the time it spent on each service.

He also sought to explain the audit finding that the Urban League was paid $25,000 to develop software that was never used by the school district. Benjamin said the Urban League provided a “functional prototype” to match small businesses with possible district work, but the district tested it and ultimately decided to use a different product.

Benjamin said he had no suspicions that Silas W. Potter Jr. — the man in charge of the district’s small-business program — was doing anything wrong. Potter, who now lives in Florida, was accused by auditors of awarding contracts to favored businesses and consultants who charged inflated prices for work of little or no public value. The King County Prosecutor’s Office has launched a criminal probe.

Benjamin said the Urban League hasn’t had any contact with prosecutors or police investigating the Potter scandal. He said the organization had nothing to hide and would cooperate with any such investigation.

Another figure caught up in the schools scandal, longtime African-American community activist Eddie Rye Jr., also crashed the Urban League news conference in an attempt to clear his name.

Rye was told to take his own news conference outside. He told reporters he was “betrayed” by Potter and “deceived” by the school district.

Rye added that he was disgusted when he learned that Potter had possibly misused public money and told him so in an angry phone call last June. That was the last time he spoke with Potter, he said.

According to auditors, Rye billed the school district for more hours than he spent at school-related meetings. Rye said that’s because he did work before and after meetings, but auditors said they couldn’t find documentation of that.

Rocky times

The Urban League, founded in 1929, has gone through a rough stretch this year, even apart from being spotlighted in the schools audit.

The organization’s longtime president and chief executive, James Kelly, stepped down in January, citing personal and health concerns.

Meanwhile, the Urban League recently lost its $500,000-a-year no-bid city contract for youth-violence prevention. A city evaluation faulted the Urban League for sloppy invoices and other problems, and the work was awarded to two other organizations in January.

But Paul Chiles, president of the Urban League’s board of directors, said the city’s “cookie-cutter” evaluation missed the main point: The spate of deadly shootings of youths in Seattle halted after the Urban League got involved. Its program sent staff out to the streets — even in the middle of the night — to talk with kids and “de-escalate” possible violence.

“Let me put it this way — the violence stopped. I am not arrogant enough to say we had everything to do with it, but we made a difference,” Chiles said in an interview.

Jim Brunner: 206-515-5628 or