Blagojevich has acknowledged a “bureaucratic mistake” in sending the $1 million grant to Loop Lab. He originally promised it to help rebuild the historic, century-old church, Loop Lab’s landlord, shortly after the Jan. 6, 2006 blaze.

The Department of Commerce and Economic Opportunity, which wrote the check, and Attorney General Lisa Madigan are investigating how the mistake occurred. Officials will say little about the botched effort.

The school used the money to buy a Loop business condo, hoping to return the enterprise to financial stability, said Watson, who has completed the school’s financial reports dating to 2003.

Watson said the school was forced to move from its original location several years ago, but he didn’t know why. It leased space at Pilgrim Baptist, about five miles south of the Loop, but suffered at the site.

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