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June 28th, 2006 Ian Demsky | News Stories
 

Citizen Clara

How one powerful Hispanic businesswoman is getting ahead in Multnomah County, and why taxpayers should be concerned.

     
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In 1987, after serving as New Mexico's secretary of state, Clara Padilla Andrews moved to Portland when her husband, a lawyer, took a job.

"I thought we would be here two, maybe three years," the petite, charming 65-year-old said during an interview last week. "That was 19 years ago."

Today, Padilla Andrews is one of the single most potent influences in Portland's Hispanic community, which has more than tripled in size since her arrival.

"She's one of our leaders," says Cuba native Bertha Ferrán, a commissioner on the Portland Development Commission.

"She's clearly the most well-connected and well-respected Latino leader in Portland," City Commissioner Erik Sten says. "Everyone knows her."

Padilla Andrews' résumé is a veritable catalog of the institutions at the heart of Portland's Latino community.

She's the publisher of El Hispanic News, a 20,000-circulation weekly newspaper that is the oldest Hispanic publication in the Northwest. She started and heads the Susannah Maria Gurule Foundation, which has an annual budget of $400,000 and raises money from private donors and government grants to promote Latino healthcare issues.

She is, as Sten points out, exceedingly well-connected. Padilla Andrews is good friends and even drinking buddies with Maria Rojo de Steffey, a Multnomah County commissioner who shares her Hispanic background—their informal social group is called the "Don Julios" after the tequila they favor.

The Lake Oswego resident and former Multnomah County staffer is a current board member and past president of the Hispanic Metropolitan Chamber of Commerce. And over the years, she's been involved with numerous other boards and groups, such as the Hacienda Community Development Corporation, which has built hundreds of low-income housing units in Northeast Portland's Cully neighborhood.

"She's a tireless advocate for the community," says Maria Lisa Johnson, executive director of the Latino Network, a nonprofit aimed at at-risk Latino youth that Padilla Andrews helped to found. Padilla Andrews won a prestigious George Russill community service award in 2001.

But there are flaws in Padilla Andrews' diamond.

In late May, The Oregonian reported Padilla Andrews' SMG Foundation was more than $100,000 in arrears—raising the specter of foreclosure—to a private lender that, along with Multnomah County, loaned it money to buy a building.

Earlier this month, WW published a story revealing that at the time Multnomah County gave SMG a $450,000 loan to buy the building—a type of loan the county has made only five other times in its history—Padilla Andrews' foundation was having trouble even making its rent and had been threatened with eviction.

A continuing WW examination of public records, tax documents and interviews has raised several other questions. WW has learned, for example, that one Multnomah County employee spends half her work week at one of SMG's programs while on the county payroll. Another works out of SMG's offices three days a week—a situation county officials acknowledge is unique. And that employee has been listed in Padilla Andrews' own newspaper as SMG's director, which is against the county's guidelines for her position.

Moreover, WW has learned that in 2004, Padilla Andrews' foundation paid her a salary for working two hours a week that is the equivalent of $336 an hour.

In addition, as WW first reported June 7, Padilla Andrews' for-profit El Hispanic News, which is headquartered in the building owned by SMG that is financed in part by Multnomah County, does not pay rent for the space it uses.

All of which raises unanswered questions: Is Padilla Andrews, and by extension her foundation and her newspaper, simply the deserving beneficiary of public assistance being directed to an underserved minority community? Or is there a subtler quid proquo linking favorable treatment of Padilla Andrews by the county with positive support for county politicians from El Hispanic News? Or is this all just politics as it's always worked—a well-connected person using her connections to get a leg up?

Rojo de Steffey says even to ask whether Padilla Andrews received special treatment from the county because of favorable newspaper coverage is unfair.

"I'm getting sick to my stomach," she told a WW reporter. "What's wrong with you?...I don't owe her anything, and she doesn't owe me anything."

Padilla Andrews, who two decades ago in New Mexico held the highest elected office of any Latina in the country, says her rise to prominence in Portland's Hispanic community is something of an accident.

"To be honest with you, I don't know how I got involved," she said in a recent interview. "My family likes to say that I don't know how to say no."

With bright red nails and a dark blue suit that brings out her blond hair, the 5-foot-5 Padilla Andrews exhibits a quiet yet gripping presence.

Not long after her arrival in Portland, she started to miss politics and volunteered on Bud Clark's 1988 mayoral re-election campaign.

"She was already pretty aggressive about getting involved in things," Clark recalled.

"When you work on a campaign, you get to know a lot of people," Padilla Andrews says. "One thing leads to another. A lot of people that volunteer on campaigns are community activists, so it's natural for one of them to call you and ask to help them out on whatever cause they're working on."

In 1993, it was her turn to make the calls. Her granddaughter, Susannah Maria Gurule, was diagnosed with leukemia.

"After the first relapse, they told us she was in need of a bone marrow transplant," she says. "All of us in our family went and got tested, and none of us matched. The doctor told us her best chance for a match would be with another Hispanic."

But she soon discovered that very few Hispanics were registered as donors. She took it upon herself to recruit more Latino donors.

"I called every Hispanic I had ever met in my lifetime and asked them to get their families tested," she said.

A match was eventually found for the 12-year-old girl—"that was the last time I saw her smile"—but it was too late.

Padilla Andrews founded SMG in honor of her late granddaughter to raise awareness about bone marrow. But over time, she says, she was pressured by others in the Hispanic community to broaden the group's scope to tackle other important healthcare issues facing Latinos.

Health issues are "not my background, but how I could help SMG and their programs was by helping them fundraise, opening doors whenever I could, advising them," Padilla Andrews says.

SMG now has six employees, some of whom are part-time. Its programs promote Latino health and wellness in a variety of areas, including recruiting young women into healthcare professions, providing health education and trying to increase school retention rates.

For fiscal 2004, the last year for which figures were available, about $30,000, or 7 percent of its revenue, came from government grants. The rest came from private donors. SMG executive director Rebecca Hernandez would not provide a detailed financial breakdown for the organization.

Five years ago, when SMG was having a hard time paying rent, city and county officials stepped in with a fix.

In 2001, SMG began renting a 4,000-square foot-building at 1200 SE Morrison St. from the Portland Development Commission.

In February 2002, PDC records show, Padilla Andrews bounced a rent check. She promised to send over a cashier's check right away and to speak with her accountant. A few months later, PDC received a check from Padilla Andrews that was made out to herself and couldn't be deposited.

"We need to return the check to her and inform her that she's in default on her lease," an internal PDC email reads.

By May 2002, Padilla Andrews was $11,850 behind on her $3,300 monthly rent, and the PDC sent her a letter saying she could be evicted if she couldn't come up with the money. But Padilla Andrews was able to rally powerful allies at the city and county to come to her aid.

"Clara is looking for [a] political fix," one handwritten note in the PDC file says. Another note says that Portland City Commissioner Sten said to "make it happen."

Sten told WW he did what he could on Padilla Andrews' behalf to help find a solution that would allow her to buy the building—which a PDC report recommended selling.

"I thought it was a good use of the building," Sten says. "It probably is and was. I'm disappointed she wasn't able to meet her financial obligations. She's always been someone who comes through on things."

On the county side, Commissioners Maria Rojo de Steffey and Serena Cruz Walsh, as well as Chairwoman Diane Linn, helped her to secure a 4 percent, 15-year loan of $450,000 to help SMG buy the building. Rojo de Steffey, by her own admission, took the lead on the initiative.

It was an unusual move, one that county officials had made only five times in the past for groups like the Oregon Food Bank and Port City Development Center, an outfit that teaches job skills to adults with disabilities. Some of those loans have had to be refinanced, but the county has never lost money.

Rojo de Steffey told WW that her close relationship with Padilla Andrews was not a factor in her getting the loan from the county.

The county does business with more than 60 nonprofits. Rojo de Steffey, Cruz Walsh and Linn say SMG got the loan because money was available and it met the criteria.

"They asked for it," Cruz Walsh says. "I don't think there's anything mysterious about it."

Even at the time, however, the deal didn't make a lot of sense to some.

A county document detailing the loan's history shows that county finance director Dave Boyer warned the board of commissioners, "This loan has a greater risk of default than the other transactions because SMG currently has no source of funds other than projected fund raising, to make payments on the loans."

Along with the $450,000 from the county, Padilla Andrews borrowed $235,000 from Enterprise Community Partners, a private lender specializing in nonprofits and community development. The PDC also forgave $45,000 in unpaid rent.

Multnomah County's support of SMG has extended beyond giving it a low-interest loan.

Since January 2005, a manager from the county's Department of Human Services has been working out of SMG's offices three days a week. The staffer, Rosemary Celaya-Alston, is a public employee who earns $87,700 per year. According to county officials, Celaya-Alston is doing the county's business and is located at SMG's offices three days a week simply because it is easier to reach out to groups focused on Latino healthcare from there.

But three separate sources who did not want to be identified, including one high-level county employee, say Celaya-Alston's work for the county bled over into work benefiting SMG directly.

In fact, Celaya-Alston is listed as SMG's "executive director" in materials for the 2005 Northwest Health Foundation Annual Community-Based Collaborative Research Conference in Portland—on whose steering committee she served.

She's also referred to similarly in a May 12, 2005, El Hispanic News article, which says "the governor met with SMG director Rosemary Celaya Alston."

Celaya-Alston declined to be interviewed.

"Never, never was it that she was to be working for SMG," says Iris Bell, the county's chief operating officer. Shown the two citations of Celaya-Alston as an SMG staffer, Bell says, "Under no circumstances would it be appropriate for the employee in question to be listed as such." The county will look into the matter, she says.

No other employee at Multnomah County's Human Services Department (which has more than 500 employees) works out of the offices of another nonprofit, according to the department's interim director, Rex Surface. Celaya-Alston will return to working out of county offices starting at the beginning of July due to budgetary constraints, he added.

Padilla Andrews says Celaya-Alston was based in SMG's offices but was doing work for the community as a whole, not SMG. Padilla Andrews says she doesn't know why her newspaper would refer to Celaya-Alston as SMG's director or executive director. "I don't pay too much attention to titles," Padilla Andrews says.

County Chairwoman Linn acknowledged the SMG-based position was unusual, but noted very clear guidelines and boundaries were established for it.

"We're an entity that steps up to meet the community where it is and make good things happen," Linn says.

Another county employee spends half her work week at SMG's Las Hermanas program. Raquel Aguillon, who is employed by the county's Department of School and Community Partnerships, earns $52,400 a year from the county. But she spends half her week working for SMG, where she helps recruit participants, coordinates speakers and serves as a mentor for young women.

DSCP does not have other employees working for other nonprofit programs the way Aguillon does, county officials say.

Despite the low-income loan and the personnel help. SMG has still had financial troubles, is behind in its mortgage payments and is in negotiations to avoid foreclosure.

Of course, SMG would probably find it easier to make its mortgage payments if it were not paying Padilla Andrews a salary.

The foundation's tax records for 2004 state Padilla Andrews was paid $35,000 for working two hours a week as its president and CEO. That amounts to $336 an hour or $700,000 a year, calculated on a full-time basis. (The prior three years she had served as SMG's "chair" or "president," worked five hours a week and received no monetary compensation, according to records.)

Padilla Andrews says she doesn't know why the tax records say she worked two hours a week when in actuality she worked much more than that, filling in while the organization was between executive directors.

"My husband would love to hear the words 'two hours a week,'" she says, because she's always working.

Former SMG board member Norm Monroe, who stepped down three weeks ago to spend more time on other commitments, told WW he didn't know Padilla Andrews had been paid a salary by SMG.

"It never surfaced in front of the board," he says.

Was her role at SMG worth that level of compensation?

"I have nothing to say about that at all," Monroe says. "If she thinks that she's worth that much, that's her prerogative."

Board member Baltazar "Buz" Ortiz says he believes Padilla Andrews put in more than two hours of work per week.

SMG would also be better able to make its mortgage payments if it received rent from the other tenant in the building, El Hispanic News.

In fact, as part of her original sales pitch to the county, Padilla Andrews had told officials that her newspaper would be a paying tenant in the building.

"El Hispanic News is committed to rent space from the SMG foundation," she lobbied in a 2001 letter to the PDC.

But IRS records show her paper hasn't been paying any rent; instead, in exchange for space in the building valued at $14,400 per year, it publishes ads for SMG.

Both Rojo de Steffey and Cruz Walsh said they were not aware El Hispanic News was not paying rent before WW brought it to their attention, but they would not comment on it.

That raises a final question. Does Andrews get special treatment from the county? And if she does, is it because she is a newspaper publisher?

In 1995, Padilla Andrews bought El Hispanic News from its founder, Juan Prats. Before that, she had been Multnomah County's Hispanic coordinator.

"I had no clue how to run [the paper]," she says. "I thought it would be a piece of cake." It turned out to be a full-time job instead.

There is no question that the paper is a booster of SMG. In addition to the ads it runs in exchange for rent, the paper is a huge editorial supporter of the foundation.

On June 30, 2005, for example, almost the entire Health page of the paper was devoted to SMG. There was a story about SMG being awarded a grant from the Susan G. Komen Breast Cancer Foundation, with a photo of SMG officials receiving an oversized check, a Spanish translation of the same story, an SMG-sponsored column on mental health and an advertisement for SMG.

More troubling to some, however, is that the paper runs only favorable coverage of Multnomah County's two Latina commissioners, Rojo de Steffey and Cruz Walsh.

For example, the paper ran a front-page story on a Latino youth forum Cruz organized last year. In the same issues, Cruz Walsh and Rojo de Steffey were pictured in the center of a photo page from an SMG fundraiser. Earlier this year, Cruz Walsh was shown in a photo for a story on a conference on the homeless but not quoted in the accompanying story.

Last September, Rojo de Steffey was pictured receiving an award at the "Power of the Woman" conference honoring local leading Latinas.

Rojo de Steffey said that for WW to even ask whether the seemingly favorable treatment SMG gets from the county was related to the positive coverage El Hispanic News gives to her and Cruz Walsh "makes me sick."

"They're a different newspaper than you guys are," she says. "You guys look for bad things to write about people. They look for good things. She's supporting people in our community by writing good stories about them."

Minority and mainstream newspapers shouldn't be thought about in the same way, says Earnest Perry, an associate journalism professor at the Missouri School of Journalism. Minority papers' traditional role has been to advocate on behalf of their communities because no one else will. And very frequently, ethnic newspaper publishers play leadership roles in their communities.

"You can't look at it from your prism [of traditional journalism]," he says. "They have very few advocates. One of the few advocates they have is their newspaper."

This month, Commissioners Rojo de Steffey and Cruz Walsh have found themselves at the center of the biggest media maelstrom since they were part of Multnomah County's decision to issue same-sex marriage licenses in 2004. The issue was the fate of the county's award-winning Schools Uniting Neighborhoods program, which brings community social programs to more than 8,300 Hispanic kids, nearly a third of the population that is served. Last week, in a 3-2 vote, Rojo de Steffey and Cruz Walsh voted along with Commissioner Lisa Naito to cut the SUN Schools program by $1.7 million despite the public outcry that has been covered on local TV news programs and in virtually every local newspaper.

Except El Hispanic News. There's been no mention of the controversy in that newspaper.


In 1990, there were about 18,000 Hispanics living in Multnomah County. Today, the population has grown to more than 62,000.

Since 2001, Multnomah County has bought almost $50,000 worth of advertising in El Hispanic News. The amount is similar to its spending in other ethnic newspapers.

County staffer Rosemary Celaya-Alston's husband, Dan, has worked for SMG in the past. Her supervisor said he was not aware of that fact, but that it didn't seem to violate the county's conflict-of-interest policies.

The Hacienda Community Development Corporation, on whose board Clara Padilla Andrews sits, owns a building on Northeast Killingsworth Street and rents space to Multnomah County for up to $21 per square foot, a price that approaches downtown rental rates. When Hacienda developed the building, it hired the Steffey Group to do so. The Steffey Group is run by Commissioner Maria Rojo de Steffey's husband, Dan Steffey.

In 1992, Padilla Andrews came under fire for stacking the Hacienda CDC board with allies and even her then-18-year-old granddaughter.

Padilla Andrews' husband, Frank Andrews, joined Harland Financial Solutions when the pair moved to Portland.

The Multnomah County Commission passed a resolution recognizing January 2006 as the 25th anniversary of El Hispanic News. "Clara Padilla Andrews is the owner and publisher of El Hispanic News and has dedicated her life to public and community service and focused on issues of justice and equity for Latinos," the resolution says.

Padilla Andrews was arrested for shoplifting from a Sears department store in Tigard in March 1992. She pleaded guilty and was sentenced to a year of probation, 40 hours of community service and a mental-health evaluation. At first, she told WW she did not remember the incident. When pressed, she said it involved her granddaughter taking something that she believed Padilla Andrews had purchased.

The American Institute of Philanthropy says at least 60 percent of a charity's total expenses should be spent on its programs. SMG spent 61 percent on programs in 2004.

 
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