State Orders Hermandad to Pay Back Funds

State education officials on Tuesday ordered a well-known immigrant rights organization to repay $4.3 million it received for adult education classes for the past three years, concluding it was impossible to determine whether the funds were properly spent.

In addition to the action taken against Hermandad Mexicana Nacional, a second group, the League of United Latin American Citizens (LULAC), was ordered to repay nearly $400,000 in adult education funds. Funding for the coming fiscal year, which begins today, was also stripped from Hermandad, LULAC and three smaller immigrant education groups across the state.

For the Los Angeles- and Santa Ana-based Hermandad, the loss of its prime source of funds could bankrupt the state’s oldest immigrant rights group, which department officials noted has been teetering on the brink of insolvency since 1995.

Hermandad’s development director and board member, Angelina Casillas, denied any wrongdoing and said membership nationwide will help keep them afloat. “We will fight the state Department of Education, and we know we are right. We know we have used this money to provide a service to the community.”

Arturo Montes, past statewide director of LULAC, called the moves “a witch hunt” aimed at Latino activists. Montes said California’s poorest non-English speaking citizens “from strawberry pickers to garment workers to the hotel workers who tuck you in at night” would be hurt by the funding cuts.

Education officials said funding for LULAC and the smaller groups was cut after they failed to provide required annual audits. In Hermandad’s case, education officials said years worth of shoddy bookkeeping, financial insecurity and a refusal to provide proof of how the money was spent triggered the demand for a refund and the funding cuts.

“During the four-year period that your organization has received the federal Adult Education funds, there has been substantial evidence of disregard and neglect on the part of your organization to adhere to the requirements or even show good faith effort to attempt to accomplish compliance,” wrote Assistant Supt. Mary Weaver in a six-page letter to Hermandad.

The department is reviewing an additional $3.2 million awarded Hermandad for 1997-98, and may require a refund of that too, Weaver said.

Ongoing Investigations

The FBI and the office of inspector general for the U.S. Department of Education are investigating whether Hermandad and nine other community-based organizations misused $15 million in federal funds earmarked to teach English to new immigrants in past years.

To date, investigators have subpoenaed more than 8,000 documents and are conducting ongoing interviews as part of the probe. LULAC was not one of the other groups named in subpoenas served on the state Education Department.

Montes from LULAC said the probe and the cuts are an effort “by the Republican Party to eliminate any organization that is working for immigrant rights and civil rights.”

Hermandad first came to the public’s attention after the hotly contested 1996 race between Rep. Loretta Sanchez (D-Garden Grove) and former Rep. Robert K. Dornan (R-Garden Grove), amid allegations the group illegally helped register noncitizens as voters, some of whom cast ballots in that election. But a probe by the Orange County district attorney’s office and the grand jury failed to substantiate allegations of voter fraud.

State education Deputy Supt. Henry Der said the cut in funds had nothing to do with anti-immigrant politics, noting that his boss, state Superintendent of Public Instruction Delaine Eastin, is a registered Democrat who had spoken out against Proposition 187 and other initiatives called anti-immigrant.

“We’re not following any partisan political agenda,” Der said. “This is a state superintendent . . . whose record with regard to minority rights is very strong.”

Der said the state’s actions were taken as part of new efforts to set up fair rules for all the organizations that receive federal funding. In past years, as many as 40 organizations have shared as much as $30 million in funding for citizenship and English classes.

Hermandad has received by far the largest share of that funding, despite a history of reporting deficiencies, including the failure to provide required student enrollment sheets, the most basic form of proof that English and citizenship classes were held with the funds provided, Weaver said.

In addition, poor financial accounting systems and record-keeping procedures “render it impossible to determine . . . that the Adult Education funds were used legitimately and exclusively . . . for supporting Adult Basic Education, English-as-a-Second-Language, and ESL-Citizenship classroom instruction,” Weaver wrote in a letter faxed to Hermandad late Tuesday.

Weaver also cited Hermandad’s failure to pay more than $230,000 in payroll taxes, and its inability to satisfactorily explain how it spent a $26,000 state health grant and a $400,000 federal health grant.

Groups Can Appeal

Hermandad and the four other groups involved in Tuesday’s action have 30 days to appeal and provide needed documentation, but “the burden of proof is on them,” said state education spokesman Doug Stone.

Experts in the field of nonprofits said the state agency’s action was unprecedented in scope and size.

“Public agencies don’t do this lightly, it doesn’t look good, but what it means is the system works. . . . I’m just amazed that they kept funding them as long as they did,” said Rosemary Fei, a San Francisco-based attorney who has represented hundreds of nonprofits. “But the pigeons have come home to roost. . . . The sad part is that it will make it harder for others who perform this mission, this valuable work, to obtain funding. When one organization does something wrong, they are often all unfairly tainted.”

Der said that would not be the case with the adult education program. Der said 50 other community organizations have applied for funds, and the money will be awarded to deserving groups.

In a related development, state superintendent Eastin has asked for an independent audit of the adult education unit. The state Board of Education, which is often at odds with Eastin, made an identical request at its meeting last month.