Ameriquest Capital Corp. and the Greenlining Institute have had a rewarding friendship -- an odd coupling of an Orange County-based mortgage giant and a Berkeley-based activist network known for criticizing big corporations.
Ameriquest donated $350,000 to the institute in little more than two years and kept up a steady dialogue about the advocacy group's concerns about the mortgage industry. The Greenlining Institute, in turn, endorsed Ameriquest's pledges to treat borrowers fairly.
But lately, the relationship has been strained.
In March, the institute returned a $100,000 donation from Ameriquest after a Times story detailing ex-employees' allegations of improper sales tactics and the disclosure that authorities in 25 states have raised questions about the lender's conduct. Lawsuits in California and at least 20 other states accuse the company of misbehavior, including fraud, falsifying documents and bait-and-switch tactics.
John Gamboa, the Greenlining Institute's executive director, said his organization had no choice but to stop taking the money because Ameriquest had failed to adequately answer Greenlining's repeated requests for a response to the allegations.
On Friday afternoon, Gamboa said the company called him and agreed to work with the institute on an independent review of Ameriquest's lending practices.
An Ameriquest spokesman said the company's consent to a review showed that if someone had concerns, it was willing to "work to resolve them."
"We take any allegation of flawed business practices seriously," the company said in a statement. "If we find problems to fix, we will fix them."
Ameriquest's contributions to the Greenlining Institute and donations it makes to other fair-lending groups are not unusual: Citigroup Inc., Bank of America Corp. and others have funneled millions of dollars in grants and billions of dollars in special loan programs through groups that in some cases had previously accused them of discriminating against minorities and financially strapped consumers.
Some observers worry that such financial connections compromise the independence of nonprofits that monitor corporate behavior.
"It creates an issue when you're taking money from a company that you're supposedly a watchdog over," said W. Michael Hoffman, executive director of the Center for Business Ethics at Bentley College in Waltham, Mass. "It creates a clear conflict of interest that I'm not sure you can overcome."
