AIDS group to have policy review

Nonprofit hires lawyer to look into compensation

April 01, 2004|By Kate Shatzkin | Kate Shatzkin,SUN STAFF

Board members of a Baltimore AIDS organization have hired a lawyer to review their policies, including staff compensation, after disclosures that their executive director used charity money for a personal trainer, received thousands in bonuses and made a loan to another nonprofit whose board he leads.

Health Education Resource Organization is the target of several investigations after allegations surfaced two weeks ago against Executive Director Leonardo R. Ortega.

Board President Carlton R. Smith said yesterday that the panel will also ask its external auditor to review HERO's books. Otherwise, he would not comment. A statement said the board will cooperate with government investigators.

"We firmly believe that the current situation and the questions raised about the organization's corporate governance and compensation policies and practices warrant immediate and decisive action," the statement said.

"This is a matter of taking responsibility for the organization's actions. This is a matter of disclosure and openness that is required of every organization that depends on the public's confidence. ... HERO's board is intent on responding swiftly and we believe effectively."

Some board members have called for Ortega to step down at least temporarily while the investigations proceed, but the statement indicated that will not happen.

"The Board has determined any staff or executive changes at this time would be disruptive and could impede the assessment and evaluation process," the statement said.

In an interview last week, Ortega, HERO's leader for nearly 11 years, said his contract allowed for the bonuses and for the personal trainer under a "wellness" package, and permitted him to make the loan. This year's contract calls for him to make $16,000 in bonuses in addition to a $122,000 salary, he said.

Ortega did not return a phone call yesterday.

HERO has a budget of more than $4 million, most of it from government grants to provide legal counseling and medical services to 3,500 clients with HIV and AIDS.

The current and former board treasurers conducted an internal audit earlier and announced that they found no wrongdoing by Ortega. But other board members said that announcement was premature, and they asked for a broader investigation.

Last week, Dr. Peter L. Beilenson, the city's health commissioner, asked the FBI to investigate whether the $1.4 million in federal funds that flow from the Health Department to HERO were being misused. The Maryland Association of Nonprofit Organizations is conducting a review of its certification of HERO under its Standards for Excellence program.

Kevin Ropp, a spokesman for the Health Resources and Services Administration of the U.S. Department of Health and Human Services, which has awarded more than $1 million in grants to HERO, said yesterday that the federal agency has renewed a $300,000 grant for HERO's medical clinic. The current grant expired yesterday.

Health Care for the Homeless, another Baltimore nonprofit group, informed HERO last week that it would no longer provide doctors to the clinic because it was difficult to see clients there.

Ropp said his agency, HERO and Health Care for the Homeless are working to find other doctors for the clinic's 100 patients.

Other grants from the federal agency flow through the city and state, which are responsible for policing the money, Ropp said.

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