ESL Funds Mismanaged, U.S. Alleges

U.S. prosecutors are alleging that the state Department of Education mismanaged millions of federal dollars earmarked for English and citizenship classes for adult immigrants, including money that went to Hermandad Mexicana Nacional, a community organization based in Orange County and Los Angeles.

In a Dec. 17 letter obtained Wednesday by The Times, the U.S. attorney’s office in Sacramento tells state Supt. of Public Instruction Delaine Eastin that its investigation has found evidence of “potential criminal and civil violations of the law.”

The letter also alleges that the Department of Education ignored evidence of gross abuse by the organizations in charge of conducting the classes. Moreover, the agency failed to disclose the problems, which surfaced last year, to federal authorities and instead “knowingly gave the impression that the program was operating according to federal law.”

Among the evidence is the education department’s dealings with Hermandad, which has offices in Santa Ana and Los Angeles. According to the letter, signed by Assistant U.S. Atty. Michael H. Hirst, the state funded Hermandad “despite awareness of [its] tax deficiencies and other delinquent payment problems.”

Underscoring Hermandad’s fiscal woes, the department at one time directed payment straight to a Hermandad creditor instead of the organization, Hirst said in the letter.

The letter does not say whether any legal action would be taken against Hermandad or the nine other organizations involved in the probe. Hermandad officials have long denied any wrongdoing.

Eastin was not available for comment Wednesday, but in a prepared statement she said: “I have always taken these concerns seriously, and one of my highest priorities as Superintendent has been to strengthen oversight and monitoring of all recipients of federal funds.”

Last year, the state Department of Education ordered Hermandad to repay $4.3 million allotted to the federally funded English as a second language and citizenship program. Hermandad has appealed that order. The state also announced at that time that it was stripping the agency of any new funding because of Hermandad’s inability to provide proof of how it spent the money.

Hermandad officials did not return calls Wednesday requesting comment, but Department of Education spokesman Doug Stone said his agency received and is reviewing student data the organization provided to determine how many people actually took the classes.

“We are still in the process of evaluating how much money they will have to pay us back,” Stone said.

In another case, according to the letter, the department failed to heed reports from its own staff consultant that another of the organizations, Fresno-based Colegio de Amnistia, listed nonexistent training sites in its application.

“The [California Department of Education] established a virtually meaningless review process for funding compliance,” Hirst said in the letter. “The ‘checklists’ utilized . . . were so cursory that virtually all entities would be found in compliance with program requirements.”

Federal authorities estimate that between 1994 and 1998, the years in question, California received $36 million to fund ESL/citizenship programs, of which $14 million was spent by community organizations such as Hermandad.

Hirst set a deadline of Jan. 17 for a response from Eastin. On Wednesday, citing the ongoing investigation, he declined to comment on possible consequences if the state did not respond appropriately. But in the letter, Hirst said that “our desire is to work with the State to resolve the concerns.”

Last summer, a state audit found that the Department of Education mismanaged $21 million in program money by funding expenses that the community-based organizations could not substantiate.

If federal authorities file legal charges against the department, the state may end up paying as much as “three times the damage caused by its conduct,” the letter stated.

Times staff writer Mark Gladstone contributed to this report.