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Charities linked to UFW are cleared

Procedures should be changed to avoid any further appearance of impropriety, the attorney general says.

December 27, 2006|Joe Mathews | Times Staff Writer

Charities affiliated with the United Farm Workers did not break the state's laws on charitable trusts but should change their procedures to prevent "the appearance of impropriety" in the future, the state attorney general said Tuesday.

Earlier this year, the charitable trusts section of the attorney general's office opened an investigation into transactions involving union insiders after they were detailed in a series in The Times.

That investigation is now closed, the attorney general said, and charges will not be filed.

In a statement, the Farm Worker Movement, the network of nonprofits related to the UFW, claimed "complete vindication of the L.A. Times' serious charges." The statement said the nonprofits' leadership "will take to heart recommendations" by the attorney general on improving procedures.

But the attorney general's investigation, as summarized in a 12-page letter sent by Supervising Deputy Atty. Gen. Kelvin C. Gong to the UFW last week, offered a narrow examination of 10 assertions in The Times series about the nonprofits' behavior. The UFW itself was not subject to the investigation because it is a labor organization, not a charity, the letter indicated.

While the Times series, headlined "UFW: A Broken Contract," offered a lengthy and damning portrait of the United Farm Workers, its related charities and the financial dealings of the families of UFW co-founders Cesar Chavez and Dolores Huerta, the attorney general's investigation attempted to determine only whether the charities affiliated with the UFW broke the law in how they raised money or used their assets.

According to Gong's letter, the investigation relied on interviews with board members of the union-related charities and a review of "documentary evidence and declarations in support of the UFW charities' positions." The UFW cooperated fully and no subpoenas were issued, a spokesman for the attorney general said.

Gong's letter was made public by the union. The attorney general's office declined to release the letter or other documents from the investigation.

"While we concluded that none of the questioned transactions violated the law, the appearance of impropriety existed," Atty. Gen. Bill Lockyer said in a statement. "In the future, when dealing with affiliated entities or individuals, UFW charities should take greater care to avoid conduct that, while it may not be unlawful, looks suspicious."

The United Farm Workers and the Times each endorsed Lockyer this fall in his successful campaign for state treasurer, a post he is scheduled to assume next year.

The UFW has engaged in an extensive campaign to discredit the Times series, by former staff writer Miriam Pawel.

Shortly after the series was published in January, the union distributed a 101-page rebuttal alleging The Times had ignored information favorable to the union.

In response, then-Times Editor Dean Baquet defended the series as fair, pointed to errors in the union's rebuttal, and published corrections of three factual errors, all relating to the history of the union and other organizations.

Gong's letter says that the attorney general's office examined questions of whether UFW and related charities were forthright in a 1999 solicitation and a 2005 fundraiser.

The attorney general's office found no violation of the law but recommended that future solicitations be made more clear.

The attorney general also found that payments by the charities for human resources and a health plan sponsored by the UFW were "not unreasonable," and that UFW-related charities fulfilled their duties in executing a contract with a state commission and in a loan for improvements at a low-income housing project.

The attorney general criticized the charities on some matters.

While a decision by one charity to rent space from a UFW official did not violate the law because the official's son handled the transaction, the attorney general's office criticized the charity's board for failing to review the transaction.

The attorney general also found no violations of the law in the sale of a house by the UFW to Dolores Huerta's daughter.

Gong called another transaction -- a $1.8-million sale of land from a UFW charity to a company in which Huerta's son Emilio was a partner -- "suspicious." After buying the property, Emilio Huerta's company quickly sold it for $2.9 million.

But Gong wrote that the attorney general would not prosecute because Huerta's company met the same price as another bidder for the land and because the charity used the money for legal purposes.

Gong concluded: "In the future, however, in order to avoid the appearance of impropriety, it is our recommendation that property either be sold on the open market or that independent real estate brokers be consulted in arriving at fair market value."

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joe.mathews@latimes.com

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