HERO director denies allegations of misusing funds

Nonprofit AIDS group exonerates Ortega as state group starts probe

March 25, 2004|By Kate Shatzkin | Kate Shatzkin,SUN STAFF

The executive director of an embattled AIDS organization denied yesterday allegations that he had misused the group's money, and blamed the furor on "misinterpretation and a lack of communication."

Dr. Leonardo R. Ortega, executive director of Health Education Resource Organization (HERO), said his contract allows him to bill the organization for a personal trainer, to make loans to other nonprofit organizations and to receive monthly bonuses even during tight financial times.

Ortega made his comments in an interview yesterday as HERO's treasurer released a statement that said an internal review had found Ortega did nothing wrong.

The Maryland Association of Nonprofit Organizations, however, has begun a review of HERO, which provides medical and legal help, counseling and other services for 3,500 clients with HIV and AIDS in Baltimore.

Three years ago, HERO earned the association's "seal of approval" for complying with standards of accountability and governance.

Peter V. Berns, executive director of the Maryland Association of Nonprofit Organizations, said that his organization routinely conducts a review when questions are raised about a group it has certified. If problems are found, the association might ask a member nonprofit group to correct them, or take the "extreme of pulling the seal," Berns said.

Nonprofit in tumult

HERO has been in tumult since last week, when Deputy Director Indira Kotval was fired three days after presenting a series of allegations to the group's 20-member board of directors.

It was unclear yesterday whether the statement from treasurer Lataysheia Lance and former treasurer Sara Smalley -- both certified public accountants -- would end discussion by HERO's board of Kotval's allegations. Lance would not elaborate on the statement, which said "in our opinion, there were no improprieties on the part of the executive director."

President Carlton R. Smith did not return a reporter's call yesterday. The board is to meet again Monday.

In the interview, Ortega defended his tenure of nearly 11 years at HERO.

In a five-page report to the board, Kotval said she had become concerned that Ortega was often away. After coming to the office on a day off to review records, Kotval wrote, she found that Ortega had received bonuses totaling $6,000 between November and January, "over the period of time that we have had a fiscal crisis." She also found checks to Ortega's personal trainer.

Kotval wrote that she had found evidence of two payments totaling $6,000 to Centro de la Comunidad, an East Baltimore Latino organization. Ortega is president of that group's board.

Angry HERO staff members submitted a list of questions Monday to the board about the allegations.

Ortega said his employment contract is routinely negotiated with HERO's board president. His contract, which extends through 2005, calls for him to make $122,000, plus $16,000 in bonuses this year, Ortega said. He would not permit a reporter to review documents or figures for 2003, but said the bonuses included were a bit less. In 2002, the agency had a budget of about $4.1 million.

Included in the contract is a "wellness package" that allows for payments to a trainer, he said. "You have to keep in mind the stress level" of the job, he said. "You support preventive medicine in public health."

Berns said that a 2001 national nonprofit survey showed that of 157 organizations of HERO's general size, 15 contributed to an exercise program for the chief executive.

Loan to Latino group

Ortega said that he lent $3,000 to Centro de la Communidad last year when it asked for temporary help with "a cash-flow problem." He said he is permitted by contract to make such loans if the chief financial officer -- who reports to Ortega -- approves it, and if the loans are less than $5,000.

He pointed to a contractual provision he said supported his view, but would not let a reporter review it further.

The loan, Ortega said, was paid back within a week. "What you're doing is helping out another nonprofit," he said. He also approved an advance with the Latino group on a $2,000 contract to provide HIV outreach, and a $1,000 sponsorship of a fund-raising event, he said.

Berns said he could not think of another example of one nonprofit lending money to another, but "we would need to really get a lot more information about the nature of this transaction before being able to offer an opinion about it."

Centro de la Communidad executive director Carmen Nieves turned a reporter away from a board meeting yesterday and did not return a later call seeking comment on the loan.

Board vice president Magaly Rodriguez de Bittner, associate dean for academic affairs at the University of Maryland School of Pharmacy, did not attend that meeting. But she said, "What I can tell you is that in the past, any money that we have received from HERO has been for grants to do services for the Hispanic community."

Ortega declined yesterday to discuss Kotval's firing, except to say that "I never, ever fired anyone for speaking their mind."

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