PUEBLO's problems
Progressive Oakland nonprofit torn apart by dueling factions and accusations of misused funds

By Matthew Hirsch

It's not uncommon for a community-based nonprofit to fall on hard times when the economy turns south, as one of Oakland's most visible social justice organizations recently found out.

PUEBLO, or People United for a Better Oakland, issued a statement on its Web site last month saying, "as of Mar. 5 we no longer had adequate funds to pay salaries and were forced to lay off our paid staff."

That's a far cry from 2002 when PUEBLO took in almost $700,000 in grants and contributions, enabling it to be many things at once: police watchdog, tenants' rights advocate, environmental justice organizer, and youth-empowerment leader.

But budget cuts haven't been the only reason for PUEBLO's downfall. Someone was misusing funds in the organization, PUEBLO staff and members of the board of directors told the Bay Guardian. And while no perpetrators have been identified, the board president and treasurer responded by locking the staff director and all seven organizers out of PUEBLO's Lake Merritt office Feb. 28.

It's been 10 weeks since an initial police report was filed about the missing funds, and the investigation seems to have gone nowhere.

PUEBLO's former staff members have since relocated to the Oakland army base with Just Cause Oakland, an allied organization that was also booted from the PUEBLO office and is seeking funds from PUEBLO contributors in an attempt to continue its work.

The meltdown at PUEBLO means two very similar groups will be competing for a limited source of nonprofit funding. Score that a major setback for the social justice movement and a victory for anybody wishing to see PUEBLO fail.

Self-destruction

PUEBLO had been dealing with a nasty rift inside the organization long before anybody reported to the Oakland police that funds were missing. Dawn Phillips, who was fired as PUEBLO director March 5, told us there was a history of infighting between PUEBLO's youth activists and members of its police committee, who were vying for control of the organization.

The dialogue became much more strained once police got involved in the lockout, and the two factions now communicate only when lawyers are present. Gwen Hardy and Vildred Dawson, the board members who voted to fire Phillips and oust the staff, deferred comments for this story to PUEBLO legal counsel Jose Luis Fuentes.

Fuentes told us that as much as $200,000 and possibly more of PUEBLO's money was spent on tickets to Golden State Warriors basketball games and a property assessment, which weren't reported to the PUEBLO board. Through mediation the board and former staff agreed to turn over control of PUEBLO to an interim executive board, Fuentes said.

"The interim board's immediate duty is to deal with funders who have been bombarded by former staff competing for outstanding grants," Fuentes said. Anne Weills, a member of the interim board and a colleague of Fuentes at Oakland law firm Siegel and Yee, told us it would also continue investigating PUEBLO's financial account.

Follow the money

The police investigation, which was partially on hold during PUEBLO's leadership transition, may now start moving forward. Sgt. Roger Short, the criminal investigator handling the case, told us he had seen documents that backed up the charges of misspent funds but needed more information to prove somebody committed a crime.

"At this point the proof has not been provided to me," Short said.

Meanwhile, Short said he reported the case to the Attorney General's Office (which doesn't confirm or deny its nonprofit investigations) and Merrill Lynch, the financial institution that handled PUEBLO's bank account. Merrill Lynch spokesperson Bill Halden said his company cooperates fully with police investigations but generally doesn't disclose information about clients to the press.

Phillips, who Fuentes identified as a subject of the investigation, said what happened at PUEBLO is no different than what's happening to nonprofits across the country: less money was coming into the organization as the result of a stagnant economy. He characterized the staff lockout by Hardy and Dawson as a power grab.

"If they are saying this is about money, I disagree," Phillips said.

Neither he nor any of the staff who were laid off March 5 took any money from PUEBLO, Phillips continued. However, he said, "we know for a fact that there was theft and embezzlement.

"I have not been charged with the task of finding out who the guilty party is," Phillips said. "I'm not going to speculate on who did it, because I'm the victim of unjust speculation. I'm going to leave that to whose job that is."

Some say this was going to be a good year for PUEBLO, the product of having built strong ties with other leaders in the progressive movement. Instead it will be a struggle even for the organization to survive. And somewhere PUEBLO's worst enemies are laughing all the way to the bank.

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