Chavis inherited $500,000 deficit when he took NAACP post, treasurer says

October 16, 1994|By James Bock | James Bock,Sun Staff Writer

The Rev. Benjamin F. Chavis Jr., who was fired as NAACP executive director for alleged financial improprieties and mismanagement, inherited a $500,000 "cash deficit" when he took the job in April 1993, the civil rights group's treasurer has said in a sworn deposition.

The treasurer, Jerry L. Maulden, president of an Arkansas electric utility system, told a shocked NAACP board this May that the financial shortfall had grown to $2.7 million in just over a year and was raging out of control.

But depositions of Mr. Maulden and Dr. William F. Gibson, the NAACP's chairman of the board, show that while they were dissatisfied with Dr. Chavis' management, not all the red ink was the 46-year-old executive director's fault.

The depositions provide an inside look at a year of upheaval at the National Association for the Advancement of Colored People, a year in which Dr. Chavis was fired, Dr. Gibson has faced calls for his resignation and the Baltimore-based organization has struggled to maintain its credibility with members and donors.

The Sun obtained transcripts of the unsigned depositions, which were taken as part of the ousted executive director's suit against the NAACP in District of Columbia Superior Court.

The legal battle is part of a blame game that has been played since the NAACP board voted overwhelmingly Aug. 20 to fire Dr. Chavis.

The central issue in his dismissal was Dr. Chavis' agreement -- without the knowledge of the board or the NAACP general counsel -- to pay a former aide, who had accused him of sexual harassment, up to $332,400.

The players are blaming the NAACP deficit, now about $3.8 million, variously on Dr. Chavis; his predecessor, the Rev. Benjamin L. Hooks; the NAACP's financial and legal staff; and the board.

According to the transcript of Mr. Maulden's deposition Sept. 22 in Little Rock, Ark., Dr. Chavis started his NAACP job $500,000 in the hole. He said the NAACP did not have the "liquid assets, enough cash or investments that could be converted to cash" to pay its bills.

Dr. Chavis has maintained in the past that he inherited a $2 million deficit.

Dr. Hooks has said that he left the NAACP in the black at the end of his 16-year tenure in April 1993.

NAACP sources said the organization did have a $600,000 reserve fund -- established with the help of a special $500,000 grant from the Ford Foundation -- when Dr. Hooks left, but that money could not becounted as "liquid assets."

By May 1994, the time of an NAACP board meeting in South Carolina, the deficit had reached $2.7 million. Mr. Maulden said he ordered a special presentation to the board because "there was not the level of concern that I felt was necessary in order to avoid a financial crisis."

Mr. Maulden, answering questions from a lawyer for Dr. Chavis, said that some elements in the deficit were:

* A big loss at the 1994 NAACP Image Awards, a nationally televised Hollywood production supervised by T. H. Poole Sr., an NAACP board member.

The program aimed to boost the image of African-Americans and raise funds for the NAACP. Projected to net a $600,000 profit, the show instead lost $600,000.

* A $680,000 civil judgment against the NAACP. The award stemmed from a 1986 lawsuit involving someone injured on NAACP property in New York.

Dr. Gibson said in his deposition that he understood the case could originally have been settled for less than $10,000. After appeals failed, the judgment had to be paid on Dr. Chavis' watch.

* A retirement package in which Dr. Hooks was guaranteed a "supplemental pension payment" of $25,000 a year for life. Dr. Gibson's deposition leaves unclear the size of the former executive director's special retirement fund or other perks that he received.

The board chairman refused yesterday to comment on the deposition, saying: "We've got a legal case pending. One day I may have to stand in court and testify."

* Settlement of a dispute with the Internal Revenue Service that reportedly cost the NAACP $150,000. Mr. Maulden said the dispute involved payments to "people classified as private contractors instead of employees" and the tax status of some NAACP local branches, which did not qualify as charities under IRS rules.

Mr. Maulden said that at the time Dr. Chavis was fired, in August, the NAACP was having difficulty meeting its payroll.

Other NAACP documents show that in March the NAACP had an annual payroll of $5.1 million, including Dr. Chavis' $200,000 salary. Lewis Myers Jr., Dr. Chavis' deputy, earned $120,000 a year, according to the documents, and 12 other staff members earned more than $60,000 a year.

The NAACP treasurer said that neither he nor the NAACP's outside auditor was aware of $82,400 in payments made to Dr. Chavis' former aide, Mary E. Stansel, plus the possibility of a final $250,000 payment, "until the matter broke in the newspaper" in late July.

Dr. Gibson said in his deposition that when he learned of the Stansel settlement, he told Dr. Chavis to return from Jamaica, where he was traveling, because "we had a very hot pot that was brewing over here that needed to be dealt with that nobody knew anything about except him."

The treasurer said that when Dr. Hooks left the NAACP, "we really kind of had things under control" and had a "realistic hope" of keeping the budget in balance.

But he said that Dr. Chavis ordered an across-the-board 8 percent salary increase while not devoting enough time to raising funds and controlling costs.

Mr. Maulden said he felt a "sense of frustration" because the NAACP's financial crisis "was either not being understood or not being taken seriously, or that we were being unrealistic and just hoping that something good would happen to us."

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.