Bankruptcy of a group aiding gay Latinos has wide reverberations

Bankruptcy of a group aiding gay Latinos has wide reverberations
By Michael Doyle
Copyright by The McClatchy Newspapers (MCT)



WASHINGTON - The financial collapse of a prominent organization that aids gay Latinos has left federal officials scrambling to reclaim hundreds of thousands of dollars in allegedly misspent government money.

Once active in California, Florida and other states with large Latino populations, the National Latina/o Lesbian, Gay, Bisexual and Transgender Organization is mired in bankruptcy court. Its doors are shut and others are assuming its high-stakes health work while lawyers dissect a legacy of debt.

Uncle Sam, in particular, wants to reclaim more than $700,000 from the now-defunct organization that gay activists called LLEGO. It's likely, though, that the government will come up empty-handed.

"The (former) employees are the only ones who are going to get paid, because of the limited amount of money available," Jeffrey Sherman, attorney for the bankruptcy trustee, said Tuesday. "If there's anything left, it will go for taxes."

Founded in 1987, the National Latina/o Lesbian, Gay, Bisexual and Transgender Organization relied on grants from groups such as the Los Angeles-based California Endowment, which provided $25,000 in 2003 for a Latino health summit. The federal Centers for Disease Control and Prevention gave the Washington-based organization more money for AIDS/HIV education, including a $1.15 million grant in 2004.

Lives are on the line with such work.

Although Latinos compose 14 percent of the U.S. population, they accounted for 20 percent of the AIDS cases diagnosed in 2004. The number of AIDS-related deaths in the U.S. Latino population rose by 7 percent from 2000 to 2004, according to the Kaiser Family Foundation. AIDS-related deaths in the non-Hispanic white population fell by 19 percent during the same period.

"I do think it's a population that has special needs," Charlotte Jenks, an activist for gays and lesbians in Fresno, Calif., said Tuesday. "There are significant cultural differences, and if they are illegal they're not going to want to seek services, obviously."

LLEGO once touted itself as the only national organization of its kind. But five months after it got the 2004 federal grant, LLEGO shut down. When auditors began probing, they found that the organization had incurred $703,181 in "unallowable costs" instead of the promised HIV/AIDS education efforts.

"LLEGO engaged in activities not covered by CDC's (rules), including lobbying, fundraising and advocating on behalf of gay issues," concluded auditors with the U.S. Department of the Health and Human Services' office of inspector general.
In 2003, for instance, the organization's leaders rallied in Tallahassee, Fla., to support adoption by same-sex couples. The same year, the organization's leaders rallied in Sacramento, Calif., to support same-sex marriages.

The organization further urged lawmakers to oppose a 2004 bill that would strip federal courts of the chance to hear challenges to the Defense of Marriage Act, which declares that states needn't recognize gay marriages performed in other states.

LLEGO closed in the summer of 2004 and subsequently filed for Chapter 7 bankruptcy protection. The case is still unfolding. The group's former Executive Director Martin Ornelas-Quintero couldn't be reached to comment, although questions were left Tuesday with his attorney.

The organization tapped federal funds for political activities because it lacked its own money, auditors added in their report, which they issued quietly earlier this year. In addition, auditors said LLEGO used federal funds improperly to cover debts accumulated from previous years.

"An internal memorandum . . . claimed that about $300,000 in bills for services through March 2004 remained unpaid because no funds were available," the auditors found. Consequently, the organization "drew down additional (grant) funds to cover nongrant expenses" while failing to report that it was doing so, they said.

The organization claimed assets totaling $37,521 and debts totaling $543,948, including $45,000 owed to American Express, at the start of its Chapter 7 proceedings. Sherman said he expected the case to wrap up by the end of the year.
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© 2006, McClatchy-Tribune Information Services.