Two government agencies, one state and one federal, are reviewing operations of the United Farm Workers and the union's related charities to determine whether the tax-exempt organizations' transactions warrant investigation.
Officials with the U.S. Department of Labor, which charters and regulates labor unions, and the California attorney general's office, which regulates charities, said their agencies initiated reviews after a four-part series published in The Times last month detailed the charities' interlocking finances and certain transactions that benefited people connected to the organizations.
The charities, along with the UFW, make up what their leaders call the Farm Worker Movement, a network of tax-exempt groups. The Times reported about various transactions in which the charities did business with one another, as well as engaged in deals that benefited friends, relatives and board members.
The articles also raised questions about the accuracy of information reported on state forms and federal tax returns. The misstatements included routinely providing incorrect answers to questions such as the number of employees -- the charities answered none -- to reporting that they received no government funding.
"There were issues raised in the series that merit attention, and we are reviewing them," said Teresa Schilling, a spokeswoman for state Atty. Gen. Bill Lockyer.
Schilling said the review would determine whether the office launches a formal investigation, in which case it would inform the charities but would not comment publicly, even to confirm the existence of the inquiry.
Problems uncovered by The Times' investigation included the charities' failure to report transactions with one another on sworn federal and state forms and transactions that might not be getting the best value for the charities -- including deals that benefited insiders.
In one case, according to state and county records, Emilio Huerta, legal counsel for the National Farm Workers Service Center, was a partner in a firm that purchased a piece of land in Fresno from the center and then quickly resold it at a $1.1-million profit.
In another example, a related charity, La Union del Pueblo Entero, rented space in a building owned by a member of its board of directors and referred clients to the tax service operated in the same office by the board member's wife, according to the charity's executive director.
