Urban League Sues Former President : Lawsuit: Black service group alleges Herb Cawthorne spent $13,000 on such personal items as dental work and a painting.

The San Diego Urban League, claiming “fraud and deceit” by former President Herb Cawthorne, sued him Friday to recoup more than $13,000 in league funds that Cawthorne allegedly diverted for personal use.

The Superior Court lawsuit accuses Cawthorne of spending Urban League money on airline tickets, hotels, meals, auto expenses, dental work and a $1,395 painting. The black service group also charges Cawthorne with giving away at least one of two Super Bowl tickets purchased with $2,400 of the organization’s funds.

The lawsuit is the first official explanation of the charges that led to Cawthorne’s sudden resignation from the Urban League on June 7, leaving behind a position that had made him perhaps the city’s most visible black leader.

“Since Mr. Cawthorne’s resignation in June, 1989, the Board of Directors has attempted to resolve this matter in a confidential fashion consistent with traditional personnel procedures,” Urban League Chairwoman Deborah Brady-Davis said in a news release. “Repeated attempts to seek a negotiated settlement with Mr. Cawthorne have been unsuccessful. Consequently, the Board of Directors voted (in January) to initiate this legal proceeding.”

Cawthorne’s attorney, Robert Baxley, said: “I’m making no comment until I see the lawsuit. I think you’ll find our position will come out relatively soon in the public domain, and, when that happens, everybody will know it.”

In January, Baxley confirmed that the Urban League had demanded repayment of an unspecified sum of money and added that he and Cawthorne “don’t believe it’s owed.”

Cawthorne, who has maintained silence on the matter since he stepped down in June, did not return a telephone call to his office at the Black Federation of San Diego, where he is now chief executive officer.

But Urban League officials broke their silences with the filing of the lawsuit Friday. Former board chairwoman Patricia McQuater revealed that, to this day, she does not know the original source of the information that caused her to launch an audit of Cawthorne’s financial records.

McQuater said she received a telephone call on Palm Sunday, 1989, from a “very credible” source, who passed on complaints of financial irregularities against Cawthorne.

“I felt rather confident that there was nothing to it, but I felt that the prudent thing to do was to investigate,” McQuater said Friday.

But, as auditors began digging into Cawthorne’s records, they uncovered numerous financial irregularities, she said.

“Every time the auditors came back, there would be something else, and it just got sickening,” McQuater said. “It got to the point where there were more than just one or two little things.”

A three-member committee of Urban League directors overseeing the audit decided to confront Cawthorne at a June 7 meeting. But Cawthorne declined to speak to the group, and, an hour later, resigned in tears before the full board, McQuater said.

“No questions were answered,” she said.

The nine-page complaint against Cawthorne seeks more than $25,000 in general damages, more than $22,000 in “special damages” and unspecified punitive damages. It demands repayment of the $13,000 plus interest and claims that Cawthorne’s actions cost the Urban League the expense of a special audit of Cawthorne’s financial records. The audit cost more than $25,000, according to the lawsuit.

The allegations mark the second time in a decade that an Urban League official has been accused of financial improprieties. In 1982, president Clarence Pendleton resigned after being ordered to rehire a former controller who claimed that Pendleton had misspent $94,000 of a federal grant. Pendleton died of a heart attack in 1988.

The detailed complaint alleges that, on seven occasions, between Nov. 19, 1987--little more than three months after Cawthorne had been hired--and Nov. 23, 1988, Cawthorne used the Urban League checking account to pay for more than $3,200 worth of airplane tickets “for personal travel unrelated to business.”

The lawsuit also charges that Cawthorne was reimbursed by “third parties” for some of the tickets but did not pay back the Urban League.

Between May 11, 1988, and May 31, 1989, Cawthorne issued checks worth more than $2,200 to pay for “meals, travel, auto expenses, hotel accommodations, dental treatments and other purchases charged on (an Urban League) credit card which were personal in nature.”

In an interview, Brady-Davis declined to provide details on where Cawthorne traveled or which third parties reimbursed him because she did not have documentation at her office.

“It would appear from what we saw on the credit card statements that there were some expenditures for dental work that the league paid for,” Brady-Davis said.

She said the automobile expenses involved the unauthorized rental of a car when Cawthorne traveled to another city.

On Feb. 23, 1988 and March 10, 1988, Cawthorne authorized the issuance of $1,866 in Urban League checks to pay for the rental of a car while his own was “not functioning,” according to the lawsuit and Brady-Davis. However, Cawthorne also collected $1,100 in his monthly automobile allowance and mileage reimbursement for the same period, the lawsuit alleges.

“He rented a car and charged that to the Urban League, and records indicate he was still receiving an auto allowance and mileage at that point,” Brady-Davis said.

Perhaps the most unusual charge pertains to Cawthorne’s alleged 1988 purchase of a $1,395 painting from a Portland, Ore., art gallery, with two checks drawn on the Urban League account Feb. 6 and March 21, 1989, according to the lawsuit. Cawthorne came to San Diego in 1987 from Portland, where he headed that city’s Urban League.

The art was never delivered to the Urban League, the lawsuit states.

In another count, the lawsuit claims that Cawthorne purchased two tickets to the 1988 Super Bowl in San Diego using $2,400 in Urban League funds. The board had approved a plan to attract a celebrity to San Diego for an Urban League fund-raiser. Brady-Davis declined to name the celebrity, but one source identified her as talk show hostess Oprah Winfrey.

When the plans fell through, the lawsuit claims, Cawthorne gave one or both of the tickets to Vernon Sukumu, president of the Black Federation, the organization that now also employs Cawthorne.

Cawthorne and a friend attended the Super Bowl as a guest of The Los Angeles Times.

“I was surprised to hear that the tickets were an issue, because he and a friend were among 50 community leaders who were guests of The Times,” said Phyllis Pfeiffer, general manager of The Times San Diego County Edition.

Brady-Davis and McQuater said board members were disturbed to learn of how Cawthorne had disposed of the tickets.

“The plan was that we would do an alternative fund-raising event,” Brady-Davis said. “The plan wasn’t that we would give (the tickets) away, I’ll tell you that.”

The lawsuit also accuses Cawthorne of collecting $2,850 in mileage reimbursements without providing documentation for the expenses he incurred.

Under his contract with the Urban League, Cawthorne was paid a salary of $58,000 the first year and $66,700 during the second year, according to the lawsuit. In addition, he received a $400 monthly automobile allowance and as much as $150 for mileage. Cawthorne also had a $500 monthly expense account, for which he used an Urban League credit card, the lawsuit shows.

“What you can see is we’re not dealing with someone who is not well-compensated,” Brady-Davis said.

Brady-Davis and McQuater said no public funds were misspent, but said that, because the Urban League relies heavily on charitable contributions, the board of directors had a fiduciary responsibility to donors and the National Urban League to recoup the alleged losses.

But Brady-Davis maintained that the volunteer board would have been unable to prevent the losses through tighter oversight of Cawthorne.

“We go over our reports item by item, but when you get a line item and there’s a certain amount there, we can only trust that the information there is accurate,” she said.