SAN JOSE - Latino schools corrupt

Latino charter schools in San Jose and Gilroy under investigation

By Joe Rodriguez

Mercury News
Posted: 05/06/2009 06:35:58 PM PDT
Updated: 05/07/2009 08:20:11 AM PDT

One of San Jose's oldest, largest and most politically powerful Latino community organizations is under investigation for improperly diverting tens of thousands of dollars in retirement funds for employees at its two charter schools in San Jose and Gilroy.
"We are outraged that this happened,'' said Louis Rocha Jr., president of the Mexican American Community Services Agency board of directors, on Wednesday. "We are committed to a full investigation, and we're going to make the accounts whole.''
The scope of the alleged skimming and the amount of money involved remains unclear. However, Rocha acknowledged that the investigation could grow to include retirement funding for the organization's non-educational employees, pushing the total in question to about $790,000.
The Santa Clara County District Attorney's Office and Office of Education have asked a state investigative team to look into the retirement funding practices at the two schools: El Portal Leadership Academy in Gilroy and Academia Calmecac in East San Jose. Both are small, coed high schools of about 200 students.
Earlier this year, the Gilroy Unified School District ordered an independent audit at El Portal. That report, Rocha said, showed that MACSA administrators had shifted at least $140,000 from employee retirement plans without their knowledge. Gilroy school officials could not be reached for comment Wednesday. The district approved the
declined to comment on where the funds might have gone but said the alleged skimming extends beyond El Portal school. He said an additional $250,000 from retirement funds at Academica Calmecac may be involved, plus $400,000 more from retirement funds from employees working in MACSA's other programs, which range from youth athletics to senior housing.
Rocha would not identify the administrators suspected of diverting the funds, but confirmed they remain at the organization and hold high-ranking positions.
Ironically, MACSA will celebrate its 45th anniversary this year with a gala banquet scheduled in June. The agency was born during the early years of the Chicano Movement for civil rights, when community activists in East San Jose formed an organization that aspired to deliver community care, such as housing and social services. At the same time, MACSA's overall mission was to end injustice, poverty and abuse of power by the police. It wanted to promote equality and racial integration.
Over the decades, the organization has grown into one of the Bay Area's most prominent Latino organizations, tapping into millions of dollars in government funding and cultivating political allies from the ranks of San Jose councilmen to county supervisors and beyond.
Larry Slonaker, a spokesman for the county Office of Education, said auditors with the state Fiscal Crisis and Management Assistance Team will look for evidence of "fraud, misappropriation of funds or other illegal fiscal practices'' in the retirement funding at the two charter schools. He said an initial meeting scheduled for Monday between MACSA and investigators was postponed and not rescheduled. The report, Slonaker said, would take two or three months. It remains unclear what agencies will investigate the other employee funds at MACSA.
Bud Frank, a deputy district attorney with Santa Clara County's Government Integrity Unit, said no criminal complaints have been filed as yet, and that state and federal law enforcement agencies could join in because irregularities involving retirement funding "cross many jurisdictions.''