Corruption allegations at Silicon Valley’s Hispanic chamber; board members ousted
Photo courtesy of Hispanic Chamber of Commerce Silicon Valley.

Six prominent Latino leaders were kicked off the Hispanic Chamber of Commerce Silicon Valley board of directors, a shakeup five of them say happened after they questioned the chamber’s financial standing and demanded to see its budget.

In separate interviews, multiple ex-board members claim they’ve never seen the chamber’s annual budget, expenditures or other financial documents and accused Executive Director Dennis King of hiding that information. King, however, said the board members failed to pay their dues, missed too many meetings and were no longer in good standing, leading to their dismissal.

The ousted board members are Jesus Flores, Peter Ortiz, Peter Sanchez, Sonia Cardenas, Diana Guadalupe and Miguel Ortiz. Three of the dismissed members are still listed on the chamber’s Board of Directors page. King also sits on the board.

Ortiz, a trustee on the Santa Clara County Board of Education, has served on the Hispanic chamber’s board since 2015 and said he’s never seen financial records. He called the move to push him and the others out a “blatant power move” by an executive director acting in “self-interest.”

“There are a lot of fishy things going on and we’re asking for the financials,” Ortiz said in a recent interview. “Dennis always positions it as the chamber doesn’t have money. All that money is going somewhere and they’re refusing to show us the financials. That raises a red flag for me.”

The Hispanic chamber’s Board of Directors now has just four voting members, including King.

Ortiz said the board hasn’t held elections in years and some of his colleagues suspected that King spends most of his time on the Small Business Development Center, a program he also runs, which receives hundreds of thousands of dollars from county and federal grant funding. The ex-board members worried about funds being co-mingled.

Flores said he also asked to see financial records for the last five years — but was denied. “(Dennis) was not happy with me asking for that and mentioned they didn’t have any financials,” Flores said.

In an interview, King denied withholding financial documents, but could not say when the board last received a fiscal report. According to the chamber’s bylaws, the board treasurer is required to audit the chamber’s accounts and present an annual financial report. The board members say that never happened.

King said the board’s previous treasurer — who he declined to name — failed to produce such reports. King estimated that the chamber’s revenue is under $10,000, and said the bulk of funding for the chamber and SBDC is funnelled through the Enterprise Foundation, a nonprofit formed in 2009. King said it’s part of the chamber’s shift to a service-based business model.

“Increasingly, the programs we offer are being offered by way of our foundation,” King said. “We’ve been moving into a different business model.”

According to its most recent tax filing, the Enterprise Foundation was in the red by $32,000 in 2016 and more than $193,000 the previous year. Lobbyist Rich De La Rosa is listed as the nonprofit’s president and CEO, earning a salary of nearly $69,000, though he denied getting paid from the venture. The organization’s revenue was nearly $600,000 in 2016, the filings show.

Flores claimed the Hispanic chamber is facing nearly $100,000 in debt, a claim King did not directly address. Instead, King said, the debt is a “minor amount” — he would not say how much — and said he’s more worried about day-to-day operations.

“In terms of day-to-day operations, basically, we’re living off of me,” King said. “I work for the chamber as a volunteer. It has obligations of many years ago that haven’t been satisfied. I would’ve liked it if certain board members stepped up and helped.”

Photo courtesy of Hispanic Chamber of Commerce Silicon Valley.

A fight over membership dues

Sanchez said the dismissed board members were never asked to pay dues — until they began to ask questions of the organization’s finances.

“It was never discussed that anybody had to pay anything,” Sanchez said. “We do a lot of volunteer work — I attend a lot of events and that’s our time and we’re not compensated for that. We all do this because we believe in the community and what we’re doing.”

But King said the ex-board members got away with skipping dues for years — about $100 annually — in addition to missing meetings, failing to meet their duties and fundraising obligations. It’s just a case of sour grapes, he added.

“It greatly saddens me to hear this because it seems to be worse than sour grapes and we have to do some checking on it,” King said. “We’re doing more on behalf of the community than our chamber has done before. It’s too bad we’ve got people who have done almost nothing to support us who are now trying through their mistruths to hurt us.”

The chamber charges membership fees from small Latino family-owned business, ranging from $100 to $1,000 per year. Once they join the Hispanic Chamber of Commerce Silicon Valley, the business owners are promised trainings, networking opportunities, mixers and advocacy from the chamber.

“The money was going somewhere when people were signing up to be members,” Sanchez said. “The members are paying right now for literally nothing. They’re not getting anything from the Hispanic chamber.”

Myrna Hernandez said her business, Paul R. Nadler Insurance, joined the Hispanic chamber two years ago, but said she hasn’t received any benefits. The San Carlos-based company provides services to mostly Latino customers in San Jose.

“I think it’s a waste of money,” Hernandez said. “You usually expect to get something in return. We are just giving money (to the chamber) and didn’t hear from them again.”

Demands and fiery a response

The ex-board members on March 13 sent King a two-page letter questioning a secret-vote at a Feb 20 board meeting to oust them. They accused King of acting in “bad faith” and violating the chamber’s bylaws by engaging “in fraudulent behavior which hurt the public trust by concealment of financial standing of HCCSV.”

Some dismissed board members claimed they were exempt from paying dues because of membership in the Alum Rock Santa Clara Street Business Association. One board member, Sonia Cardenas, they claim, tried to pay her dues but the payment was not processed.

The bylaws don’t list nonpayment of dues as grounds for removal, they argued, and demanded full disclosure of the chamber’s finances for the last five years. If there is evidence of misconduct or misappropriation of funds, the members demanded in the letter that King resign or be fired immediately.

King didn’t hold back in his March 19 response.

“Enough is enough,” King began. “This is not a response to the threats stated and implied in your note nor to your attacks on my integrity. If those continue, we will react vigorously in kind.”

King said the six board members appeared to have “their own agenda” and played games. He added that board members can be dismissed with or without cause. A review of the chamber’s bylaws found no mention of membership dues as a means for removal.

“You are not members of this association,” he concluded. “You have no legal standing to make demands… please stop disrupting our services to the community and to our members. You are causing us unnecessary harm. It is time to move on. Enough is enough.”

King did not address in his letter the demand to see financial records.

A new Hispanic chamber is forming

As accusations swirl and the fallout continues, the ex-board members are considering starting their own Hispanic chamber.

“There’s no rule or law saying there should be just one,” Sanchez said. “I think we’re going to go on and form our own (chamber) to represent what the businesses want in East Side. The good thing that comes out of this is there will be another Chamber of Commerce that’s Hispanic and they’ll do a good job.”

Meanwhile, King said the Hispanic Chamber of Commerce Silicon Valley is interviewing new board members and “cautiously” rebuilding its leadership. As for the chamber’s elusive financial documents, he declined to release them to San José Spotlight.

“Put that question to our corporate secretary,” King said. “I report to the board not the other way around — it would not be up to me to release them. It would be a board decision.”

Contact Ramona Giwargis at ramona@sanjosespotlight.com or follow @RamonaGiwargis on Twitter.

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