Nonprofit Executives Respond to Cindy Chavez Conflict Allegations

On March 24, Metro/San Jose Inside reported that Santa Clara Family Health Foundation (SCFHF) executive board member and officer Cindy Chavez participated in a board decision to provide $250,000 in funding to the Yes on A committee, of which she and Kathleen King—CEO of SCFHF—constituted a majority of the three-member committee. The committee subsequently turned over a large portion of the funds to the South Bay Labor Council Issues PAC and Democratic Central Committee’s PAC. Because of Chavez’s obvious conflicts of interest—she headed up the SBLC at the time—and the importance of a countywide sales tax increase, which will be paid by all residents, Metro/San Jose Inside felt this was a matter of public interest.

On Friday, nine nonprofit executives wrote a letter to express their thoughts on recent articles. They worry that investigative reporting could make nonprofits “the target of unfounded accusations and public reproach.” Because we feel this is a useful debate to have, and because we want to give differing points of view the proper attention they deserve, we are running below the letter in full, in addition to its appearance in the comments section where it was submitted. —Editor

29 March 2013

Editor
Metro / SanJoseInside.com

Recent articles in the Metro have criticized two local non-profit organizations, the Valley Medical Center Foundation and the Santa Clara Family Health Foundation, for their support of Measure A, a small sales tax increase to fund county services. The clear implication of the article is that it is risky for non-profits to engage in lawful political activities and collaborations. If they do so, they may suddenly become the target of unfounded accusations and public reproach. The effects of this guilt-by-innuendo message will be bad for non-profits, bad for public policy, and bad for free speech in Silicon Valley.

To begin with, the IRS specifically acknowledges the right of non-profits to support or oppose ballot measures and to earmark resources for those purposes.  Decisions by government directly affect the charitable objectives that non-profits seek to accomplish. If non-profits have the goal of supporting high quality health services to the indigent or supporting health insurance for low-income children, then the financial capacity of county and community clinics and of Valley Medical Center are of paramount importance.  Non-profits that significantly supported Measure A have performed a positive service for the hundreds of thousands of county residents that depend on the county health and hospital system for their well-being.

Secondly, it is commonplace in Santa Clara County for non-profits, clinics, community groups, and the county to collaborate in order to create and implement health care innovations, to seek and win major grants, and most recently to implement federal health reform. A collaboration that included People Acting in Community Together, Working Partnerships, the Santa Clara Family Health Plan, labor unions, and county government created the extraordinarily successful Children’s Health Initiative. The county, unions, and community groups collaborated on the bond issue that is funding a public hospital that meets modern earthquake standards. Clinics, non-profits, and community groups have formed a major collaboration to perform outreach for the new health exchange. When people from other places interested in health care visit our region, they invariably express admiration for our track record of working together. 

True, some individuals work on behalf of more than one organization. Unfortunately, here, as elsewhere, there aren’t enough dedicated people to take on all the important volunteer roles, and some folks do more than their share. In the non-profit world, we view those people with gratitude. Metro views them with suspicion.

Finally, non-profits should be engaged in lawful political activity because we have something useful to say. We aren’t mere do-gooders; we are experts in our fields. We should speak out, and government should listen. Metro articles that would discourage us from bringing our voices into public debates are harmful to the robust discussion of ideas and to the spirit of free speech in our region.

Signed,

Carole Leigh Hutton
President and CEO
United Way Silicon Valley

Patricia Gardner
Executive Director
Silicon Valley Council of Nonprofits

Reymundo Espinoza
CEO
Gardner Family Health Network

Christopher Wilder
Executive Director
Valley Medical Center Foundation

Richard Konda
Executive Director
Asian Law Alliance

Sarah Triano
Executive Director
Silicon Valley Independent Living Center

Jethroe Moore
President
San Jose/Silicon Valley NAACP

Poncho Guevara
Executive Director
Sacred Heart Community Service

Linda Williams
President and CEO
Planned Parenthood Mar Monte

16 Comments

  1. In addition to ray espinosa’s laundry list, I’d like to add the employee and facility sharing with County agencies.  People that work for these two nonprofits are directly paid with taxpayers money.  These two nonprofits occupy government office space and use government office equipment and supplies.

    Is it proper for taxpayers money to directly fund a nonprofit that then contributes a sizable amount to campaign for tax increases?

    I wish all the focus wasn’t on Cindy Chavez.  These issues are looking much bigger than just Cindy Chavez.  Much like another Metro investigation started with a small question that uncovered something much, much larger, the laundry list of unanswered questions keep getting longer.  That may be why these non-profit leaders are circling the wagons.

    There’s always a nonlinearity in the progress of stories like this.  I think that has to do with the influence exerted to contain the reporting and public discussion.  Sooner or later, even the Merc will have to cover this story.  Stay the course guys.  You’re on the right track.  This smells like there’s more to come.

  2. Could they please give us their conflict of interest policies or policies against self dealing?  Then, comment about the Chavez situation.

  3. Just thinking.  What if the Chamber of Commerce set up a nonprofit that got tax exempt contributions then wrote $250,000 checks to its political operation to support or defeat measures and candidates?  Damn,I think I just gave them an idea.  Sorry voters.  The era of honesty and transparency is gone.

    • Municipalities and agencies are members of various chambers.  The Santa Clara Valley Water District belongs to several chambers.  According to this web site, the water district paid tens of thousands in “membership” fees to chambers in Santa Clara County.  These chambers in turn endorsed the water district’s parcel tax measure, last November’s Measure B.

      https://sites.google.com/site/scvwdunofficial/

  4. It is interesting that the non-profit directors saw the Metro/SJI articles as attacking non-profits in general when the article in question clearly was focused on a very specific conflict of interest issue with the decision making process, small committee and large sum of money that benefited Cindy Chavez’s run agencies.  The conflict is important because of her personal gain (her salary from the group) and the benefit to her labor causes from the health foundation.  Chavez wears many hats in the non-profit board and foundation arena and her paid gig is a direct beneficiary from her decisions on those boards.  Since non-profits rely heavily on taxpayer government funding as well as private and corporate funding it is essential that the reporting Metro does continue.  Non profit boards may worry that their voices be stifled by the reporting but as a taxpayer I offer that I would be stifled from knowing where my tax dollars are being spent if the investigative reporting doesn’t happen.  It is unrealistic to expect people outside of specific fields to know all the ins and out or to have time to research each potential conflict of interest so blatant ones should be reported on. 

    Maybe if SJI had gotten involved sooner they would have gotten to the bottom of the MACSA scandal before so much of the money was stolen from teacher’s pensions or they would have put pressure on the DA to ramp up the investigation to find the money.  There are a number of fishy deals in the non-profit world and the political lobbyist and officals.  The Shirakawa mess is testament to the power of good reporting and that mess went on FOR DECADES.  The public will never know the true and actual amount Shirakawa cost taxpayers through his theft and gambling. 

    If the non-profits have nothing to hide, keep impeccable records, respond to taxpayer and reporter requests for information then there should be no concern with what is reported.  They still have their right to exercise their legal right to political action but why should the general public be denied the right to know what that political leaning is and make a decision on whether we support the funding by the tax dollar for those ideas?  Isn’t it more democratic to give the information and let the agencies, people, leaders ALL be informed and active?

  5. Wow, what a deceptive letter. It attacks the article’s “implication” and “guilt-by-innuendo” (i.e. things that were not actually written) but doesn’t respond to a single legitimate issue that was in fact contained in the pieces. Such as the lack of arms-length transactions, the conflicts of interest, the use of the measure A committee to launder funds to SBLC. It papers over the lack of transparency that occured when the polically influential nonprofits refused to release their minutes and dodged interviews. Is that good for free speech? Is that good for the nonprofit community? Where’s the outrage there?

    The letter seems to suggest that it is okay for supervisor hopeful and health foundation CEO Kathleen King to hand huge amounts of money to another supervisor candidate, machine boss Cindy Chavez. Oh, yeah, that’s free speech. Not graft or anything. No, of course not.

    Executives like former Mercury News editor Carole Leigh Hutton, who’s paid 250k to run United Way,should know better than to attack public spirited journalism. The articles were free speech that educated the public to items that were swept beneath the rug by her former employer, which endorsed the $50 million tax increase even while admitting the county wasn’t exercising good oversight of Supervisor Shirakawa’s criminal spending spree.

    • Seems like they totally dodged the Cindy Chavez question, how she managed to be at every stage of the transaction.

      Didn’t the United Way actually give money to employ Steve Preminger, the Democratic Party chair? The WPUSA site says “For most of the 1990s he served as the United Way labor liaison and the Community Services Director of the Labor Council. In 2000, when the United Way made the program an independent agency, the Union Community Resources program became part of Working Partnerships. Preminger has been the director of UCR since 2000.” That means that United Way has been spending some of the money it raises to help the needy to pay the salary of someone who helps elect crooks like Terry Gregory, George Shirakawa and Xavier Campos. For shame!

      • The public has a right to know where the money comes from, where it ends up and who makes the decisions on the path.  Seems like there is a very incestuous culture in the nonprofit and political world and that means the general public must rely on the good investigative reporting the Metro and San Jose Inside do. Lets not forget that Nixon and all his co-conspirators weren’t happy about the investigative reporting of Woodward and Bernstein but after Watergate can we say that they were wrong or exercising a prejudice against the White House or Presidency?  It is somewhat ridiculous that nonprofits and their leaders would think they should be shielded from public scrutiny when they rely so heavily on public money.

  6. “We aren’t mere do-gooders; we are experts in our fields. We should speak out, and government should listen.”

    What a pompous thing to write! I feel so sorry for these highly compensated executives at organizations with budgets in the tens of millions annually. These “Metro articles … discourage us from bringing our voices into public debates.” Awww. They wouldn’t be able to spend half a million to buy an election because the public would actually know what they were doing. Didn’t read about that in the Merc, did we?

    Their funders might actually figure out that they were giving money to raise taxes and fund SBLC campaigns—rather than do what they said they were going to do (pay health care premiums for poor, uninsured children).

    If it’s “harmful to the robust discussion of ideas and to the spirit of free speech in our region” to bring these facts to light, then we might as well go back to the Middle Ages. I am shocked to see progressive organizations like Planned Parenthood sign on to this. Do they want to see a return to the days when things just weren’t talked about?

    Haven’t we come too far for that?

  7. “…there aren’t enough dedicated people to take on all the important volunteer roles…”

    Interesting to read this group of non-profit leaders considers Ms. Chavez a volunteer.  Most of us would call Ms. Chavez a highly paid political activist.  Her job description obviously includes sitting on the boards of non-profits funneling money into Ms. Chavez’s own non-profit.

    Also, could we see a show of hands from these non-profit leaders if their organization publishes board meeting minutes on their web site I was disappointed to read Ms. King refused to give the meeting minutes to the Metro reporter.

  8. I really want to thank the Metro for their stories on this issue. I must admit that I agree with everything posters are saying. This letter avoids the real issues being brought to light concerning conflicts of interest, and about using tax payer money improperly. I think they should have addressed the Metro’s concerns in an above board, open, and honest matter. By not doing it, they have cast even more suspicion on themselves, and their organizations.

    I have served on many non profit Boards, and even founded one myself. None of us got paid one red cent for our service to others, or for being on the Board. I believe that if you are going to assist people or animals in need, and advocate for others, you do so because you believe in your heart that it is the right thing to do, without profiting personally.

    This whole thing is so disheartening, and really exemplifies why people who donate their hard earned money should be careful and really question how their donations will be used, and find out exactly what percentage actually goes to helping others. 

    What bothers me most about this whole thing is that in the end, and at the end of the day, people in need will be the ones who are punished.

  9. Richard Konda is a disgrace. Lawyers offering “free” advice to their race specific clients while at the same time soliciting funding from every entity that is not exclusively “Asian”
    Besides the donations they solicit, how much funding do they accept directly from the city of San Jose? How many times have they directly sued the city? It’s truly stranger than fiction. The city gives them millions so they can use those funds to sue the city. Yet,  the city council, the mayor, and city manager lack the courage to stop “gifting” taxpayer money that should be used for services for all San Jose residents.
    Get a real job Konda, then go do pro bono work if you’re really interested in helping your brethren.

  10. Am I the only one who finds it weird that all of these non-profit big shots sat silently by while George Shirakawa stole public funds and Cindy Chavez engaged in blatant conflicts of interest …yet they get their panties in a twist over Metro’s reporting?

    Where’s the outrage over Chavez’s support for Terry Gregory and George Shirakawa Jr.? Over the misuse of public funds?

    No…  Carole Leigh Hutton,  Patricia Gardner,  Jethroe Moore, et al are upset that articles will chill their ability to hornswoggle the public into the next tax increase.

    Where is your integrity, non-profit directors? Why don’t you speak up about political corruption.

    I am scared. Very scared. If Cindy Chavez becomes supervisor, a Cortese-Yeager-Chavez majority and Jeff Smith-mismanaged county will spend county government broke. How can a sophisticated place like Silicon Valley be in the pocket of a crude and corrupt political machine?

    And by the looks of it, the nonprofit community is lining up to sing its praises. I’d think twice before I donate again to Planned Parenthood or United Way.

  11. United Way is a joke. The money they raised for charity went to Steve Preminger, a political operative who spends his time getting guys like George Shirakawa elected, rather than to help the poor and needy they profess to help.

    http://is.gd/JzyPRs

    Obviously former Knight-Ridder exec Carole Lee Hutton lacks a moral compass.

    United Way is tied in with Xavier Campos and Joseph Sanchez from his office and Shirakawa aides Andrea Flores Shelton and Andres Quintero. Anyone who donates to United Way should ask themselves why its leadership associates with the former head of an organization that steals teachers’ pension funds (MACSA) or who worked for convicted embezzler/perjurer Shirakawa.

  12. We’ve always questioned Carol Leigh Hutton’s judgment since November 30, 2007, when she approved the use of “gringo” as the name of the diverse white Americans in the San Jose Mercury News on the front page.  She was Executive Editor.  She refused to allow comment that such an illegitimate label reflected a desire to portray us as without diversity or nationality.

    We’ve quietly boycotted her failed leadership of the local United Way organization since her appointment. Her letter reveals the same disingenuous and misleading spirit as her embrace of “gringo.”