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GREENSBORO - A controversial police lieutenant is again embroiled in an internal investigation after a newspaper discovered his co-ownership of a group home for troubled girls.

The investigation, expected to take weeks to complete, focuses in part on whether Lt. James Hinson and a police colleague should have informed the department of their plans to open the home late last year.

Hinson and Sgt. Kevin Chandler were licensed by the state to run a home for teenage girls on Glenside Drive in northeast Greensboro. Hinson signed an agreement this spring with the Guilford Center to take up to four clients referred for help by the mental health agency.

The for-profit corporation is listed as Center of Progressive Strides: Or C.O.P.S.

Police Chief Tim Bellamy said he knew nothing about the group home until he was contacted July 2 by the Rhinoceros Times. The internal investigation opened the next day because the newspaper's editor had complained to Internal Affairs about Hinson's business.

Department policies require officers who are interested in outside employment - jobs not affiliated with the police department - to submit an application before they begin that work.

Hinson and Chandler declined to comment Tuesday. They referred questions to Charlotte attorney James Ferguson II.

Ferguson said he does not believe either officer is in violation of department policies governing employment outside the agency.

"It's a nonissue," Ferguson said, noting that the rules apply to anyone who would earn a salary, wages or tips, which neither officer receives because they own the business. Also at issue is whether a conflict of interest exists. The internal investigation may look at whether clients referred to Hinson and Chandler landed at the home as a result of their own police work, Bellamy said last week. On Tuesday he declined to talk about specifics of the investigation.

City officials expressed concern that the officers' ownership of the home, which is properly licensed, will keep in place a cloud of suspicion that first shrouded the department two years ago.

"Eyebrows are going to raise," said Councilwoman Yvonne Johnson, who has announced plans to run for mayor. "It may be something that's a good thing for young people, but I don't know ... and I'm going to hold out until I know, because I don't like to damn somebody unless I have good reason to do so."

Hinson's name is linked with the police scandal that led to former Chief David Wray's January 2006 resignation. Seven months earlier, a different lawyer for the lieutenant made allegations of internal racial profiling against his client by a small squad.

Wray defended the Special Intelligence Section, arguing that Hinson was under suspicion of working a second job on city time.

Multiple complaints soon filtered into City Hall about the way Wray managed the department. City Manager Mitchell Johnson, then in an interim role, launched an internal review of Wray. Wray later resigned under pressure.

Internal and criminal investigators had cleared Hinson of wrongdoing by early 2006.

The SBI was asked last year to investigate possible criminal conduct within Wray's administration. A special prosecutor with the N.C. Department of Justice is reviewing evidence compiled by the State Bureau of Investigation.

Contact Eric J.S. Townsend at 373-7008 or etownsend@news-record.com