President of Sebastopol nonprofits accused of misappropriating city, sponsor funds

A well-known music promoter and the president of two Sebastopol nonprofits is accused of fraud and misappropriating more than $70,000 over the span of two years from the Barlow and the City of Sebastopol, according to the organization’s former executive director, two former board members and an attorney from the Rowan Firm.

Jim Corbett, locally known as Mr. Music, allegedly misappropriated funds from the Peacetown nonprofit, of which he is the board president, by directing grant awards and contract monies meant for Peacetown into the Mr. Music Foundation, from which he directly benefits.

The allegation was reported to the Sebastopol Police Department on Monday, June 26 by former Peacetown executive director Elizabeth Smith. The police department forwarded the investigation to the Petaluma Police Department due to a potential conflict of interest, according to Sebastopol Police Chief Ron Nelson.

In an email to the Sonoma County Gazette, Lt. Jeremy Walsh of the Petaluma Police Department said his department is not “in a position to make any comments about the investigation at this point as it is an active and open investigation.”

Interviews with Peacetown board members indicate that for two years, Corbett took $2,000 a week for 14 weeks from contracts with the Barlow, funds that were meant for the Peacetown organization.

“We thought that money was going to Peacetown,” said Barney Aldridge, owner of the Barlow. Aldridge said the funds were meant to pay for the musical festival.

During an interview with the Sonoma County Gazette, Corbett agreed that he entered into a contract with the Barlow “to produce Peacetown,” for which he received $28,000 in 2021 and again in 2022. The contracts indicate Jim Corbett as the primary contact and client.

“The contract was for entertainment and infrastructure and I took a little bit out for myself, too,” Corbett said, adding that he would have to look at his tax returns to verify the exact amount he says he paid himself.

Corbett says the Barlow hired him to be the promoter and producer of the concert series and that “a good portion of the funds” from the Barlow were used to pay for musicians, artists, soundmen, advertising and signage. However, former Peacetown board member David Bush says the organization, not Corbett paid for the entire festival, including the cost of musicians, from the Peacetown bank account. Bush believes Corbett pocketed the $2,000 a week Barlow payments.

“From the very first week checks were coming from the Peacetown account,” Bush said. “We were adamant against the commingling of accounts and funds from the beginning,” he said.

In this case, “commingling of funds” refers to the mixing of funds between the Mr. Music Foundation and Peacetown. The two have been synonymous to the public since the inception of the free music concert series in 2013. The summer series brings together thousands of people into Sebastopol each Wednesday night for at least 10 weeks during the summer and early fall.

For six years, the Mr. Music Foundation, of which Corbett is the founder and board president, was responsible for planning and organizing the popular Peacetown concert series. From 2013 to 2019, the concerts were held at Ives Park. In 2019 Peacetown incorporated and became its own nonprofit, where Corbett also serves as board president. The goal of incorporation was for Peacetown to be independent of the Mr. Music Foundation, according to Smith.

“It made sense to create its own identity separate of the Mr. Music Foundation,” Smith said.

Rather than canceling the concerts during the COVID-19 pandemic, Peacetown was held virtually in 2020. In 2021, the series moved from Ives Park to the Barlow to comply with the city’s COVID-19 restrictions.

A timeline of questionable activity

When the concert series moved to the Barlow in 2021, Corbett reportedly told the Peacetown board that no contract was needed between the nonprofit and the Barlow property management company.

“We thought it was odd that the Barlow wasn’t paying us,” Bush said. “After all, we’re bringing 2,000 to 4,500 folks into their place every week. But Jim insisted it was OK. Of course, he’s been getting $2,000 a week from the Barlow from the start.”

Bush, who is an attorney, said he tried to help Corbett negotiate a deal with the Barlow in 2022.

“But then Jim came to a board meeting one night and said it was already done,” Bush said. “It felt very sneaky.”

In Feb. 2023, Bush and Smith wanted to work with Corbett to negotiate a deal with the Barlow on behalf of Peacetown. On the morning of the scheduled meeting, Bush said Corbett told him the representative from the Barlow “was stuck in traffic and couldn’t make the meeting. That seemed weird to me because she lived and worked in Sebastopol.”

When Smith and Bush rescheduled the meeting with the Barlow later in February -- which happened without Corbett -- they discovered the Barlow had a history of contracts with Corbett.

“We were flabbergasted,” Smith said. “They told us they had always had a contract with us.”

Bush and Smith learned that for two years, the Barlow paid Corbett $28,000 for each summer concert series.

“But we had never seen the contracts,” Smith said.

Smith consulted Dan Cortwright, an attorney from Rohnert Park’s Rowan Firm. “The attorney read through the [Barlow] contract and said that there is overwhelming evidence of possible civil/criminal charges, and possibly felony embezzlement. Jim misrepresented Peacetown,” Smith wrote in an email to the Peacetown board on Feb. 19. “The attorney said that this could be a ‘self-dealing transaction.’”

When Smith confronted the Peacetown board of directors about the contracts with the Barlow, Smith said the issues were “swept under the rug.” In an interview, Corbett said the board, “scolded” him about the contract with the Barlow and “admitted it was all sloppy bookkeeping.”

“They said I shouldn’t have done that and deemed it not to be criminal,” Corbett added.

Bush, Smith and another board member, Josh Walden, called for Corbett’s resignation. Instead, Smith was fired and Bush was voted off the board.

“We are taking this too seriously and have the opportunity to learn from each other in this world of imperfection,” board member Onye Onyemaechi said, according to minutes from the Feb. 23 Peacetown board meeting obtained by the Sonoma County Gazette.

City funds unaccounted for

The Barlow funds are not the only payments in question. In 2022, Peacetown was awarded a total of $10,000 in community benefit grant funding from the City of Sebastopol. The city wrote four checks meant for Peacetown to Corbett’s Mr. Music Foundation on June 9, 2022, Oct. 4, 2022, Dec. 21, 2022 and Apr. 13, 2023, according to accounts payable documents obtained by the Sonoma County Gazette. Smith says that Peacetown hasn’t seen any of the funding and that it’s unclear how or where it was spent.

The Sonoma County Gazette reached out to Sebastopol City Councilmember Stephen Zollman, who, according to a July 2 email obtained by the Gazette, was in contact with Bush about the Peacetown funding.

“Given the ongoing investigation, we have been advised to deny all interview requests until it is completed,” Zollman responded.

Larry McLaughlin, Sebastopol’s city manager said he had confidential conversations with the council but that he “cannot instruct them to do or not to do anything.” He also refused interview requests by the Sonoma County Gazette, citing an open public records act request.

Corbett says the Mr. Music Foundation used the funding to pay for “five bands per week, soundmen, advertising and stage managers.”

But Peacetown bank statements from 2022 show the organization paid for sound, advertising and emcees throughout the summer.

Corbett calls it a misunderstanding. “Some things with Mr. Music just got mixed up,” Corbett said. “I’m the first one who wants to make our books clean. I’m a musician, not a bookkeeper.”

Phone calls and emails to Mr. Music Foundation’s CPA were unanswered.

Sebastopol Police Chief Nelson said Corbett’s response isn’t surprising.

“Typically in cases involving fraud, embezzlement and misappropriation of funds, those are the smoke screens used,” Nelson said.

Corbett swears all the funding -- from grants, sponsorships and cash placed into the Peace Pot donation container during Wednesday night concerts -- is all accounted for and spent appropriately.

“It’s all sucked up by the free concerts,” Corbett said. “We’re not pulling money out.”

Following the money

In 2022, according to bank statements obtained by the Sonoma County Gazette, Peacetown brought in $26,703.83 through basket donations, $29,537 through food and beverage sales, $16,579.99 in personal donations and $12,839.59 in merchandise sales, totaling $85,660.41. Also accounted for were check debits for more than 60 musicians spanning all 14 weeks of the 2022 concert series. This documentation supports the assertion by Smith and Bush that the nonprofit paid the musicians, not Corbett.

“We paid for the musicians,” Smith said. “Peacetown did. Not Jim. Peacetown.”

The bank statements do not include the four City of Sebastopol $2,500 community benefit grant checks meant for Peacetown, nor does it include a $5,000 sponsorship check from the Eye Care Institute (ECI), a Sonoma County vision care practice.

The ECI check was written to the Mr. Music Foundation, but meant for Peacetown, says Sebastopol City Councilmember Diana Rich, whose husband Daniel is a partner at the clinic. Notes in the organization’s sponsorship documents indicate Corbett was to deposit the check into Peacetown’s bank account, but it never showed up in the Peacetown’s 2022 bank statements.

“ECI really won’t like the idea that the funds didn’t make it from the Mr. Music account into the Peacetown account,” Rich said in a text message. “I’m hoping there’s an explanation. Honestly, I don’t see Jim/Mr. Music Foundation/Peacetown as engaging in anything nefarious. Maybe I’m being naive...I hope not.”

'Do we wish this to fall apart or come together?’

In their Feb. 23 meeting, the Peacetown board discussed the Barlow contracts, ultimately deciding they must “stand together in love, trust, strength [and] community to apply natural processes to find transformation and healing,” according to minutes obtained by the Sonoma County Gazette.

“Do we wish this to fall apart or come together? [We] shine together to touch millions,” the Feb. 23 minutes read.

The minutes indicate four board members -- Francis Rico, Jasmine David, Kate Aldrich and Onyemaechi -- all supported Corbett. Walden and Bush, who were both still on the board at the time, along with Smith, called for Corbett’s resignation.

The board voted to keep Corbett on as board president, despite Corbett’s admission to commingling funds. After the incident, Walden quit the board.

“He was smart to get out of this mess,” Bush said.

The rest of the board thought the request for Corbett’s resignation to be reactive and “completely out of alignment with [the] organization, including its principles and mission,” according to an email exchange between Smith and Rico.

“The idea that Jim was benefiting financially from this was absurd,” Rico said in an interview with the Sonoma County Gazette. “He hasn’t been pocketing funds and taking vacations. What you’re looking at is a transition period between organizations. There’s nothing that isn’t normal.”

The board’s bylaws require a director to disclose any financial interest they have because of their participation with Peacetown. If a violation occurs, the board is required by its bylaws to take appropriate disciplinary and corrective action.

Corbett wasn’t disciplined. In fact, the board believed Bush and Smith were at fault and working together “in opposition to what Peacetown is” without regards to what “is not in the best interests of anyone of us,” Rico wrote in an email to Smith on June 19.

“David has a personal vendetta against Jim,” Rico said in an interview with the Sonoma County Gazette. “People, you know, they idolize Jim and maybe that’s not right. But Jim’s mission is peace and I support Jim.”

Corbett wonders if Smith was out to usurp his position.

“It was kind of weird. I was the biggest advocate for getting her the executive director role,” Corbett said. “It felt like some kind of power play that she was trying to push me out.”

The day after Smith received Rico’s email, she was fired by the organization. Bush had already been voted out of the organization at a meeting where he was absent while on vacation.

It is against California law to retaliate against an employee, including contractors, for whistleblowing. Rico said the board let Smith go because her contract expired in April.

Bush disagrees. “The retaliation by the board is huge,” he said.

At the end of the day, both Bush and Smith are disappointed by the decisions of a board and organization they used to believe in.

“I was a Mr. Music fan myself. He does work hard but you can’t lie about it. And there’s so much we could do as an organization with the money. It’s just hard,” Bush said. “This is somebody I have really admired.”

Corbett maintains the entire issue is a mix-up.

“I was wrong in the assessment [of the] Peacetown bylaws. I should have informed the board of this dealing,” Corbett said of the Barlow contracts. “I did not do that and I was apologetic to the Board for not knowing the provision. It was a not knowing rather than a hiding.”