The state director of Arizona’s oldest and largest Hispanic organization was suspended then stripped of his powers by the national board after he tried to get a full accounting of secret bank accounts, according to documents obtained by the Tribune.
Sam Esquivel was suspended by the national board of the League of United Latin American Citizens in January while he was pushing for an independent audit of six bank accounts linked to the state organization that he had discovered. Last month, the national board voted to allow Esquivel to remain state director, but stripped him of his power to make decisions. Among the restrictions placed on Esquivel is that he cannot speak to the media.
The accounts had almost $120,000 in them last June, LULAC records show. Most of the money was moved three days after Esquivel disclosed he had discovered the accounts at a state meeting in August. He has been unable to determine where that money went.
Both sides say the rift over the bank accounts has split the organization and has detracted from efforts to improve opportunities for Hispanics in Arizona. The battle pits the old guard from Tucson that for years ran the organization — and still controls most of the financial records — against more reform-minded members from the Valley and other parts of the state who are determined to learn where the money went.
Esquivel’s supporters say he is obliged by the LULAC constitution, federal tax laws and mandates from the state committee to get a full accounting of all funds tied to the state organization.
His detractors, including the regional vice president of the national committee to whom Esquivel must now report, say he and his backers are motivated by their own political agenda.
Esquivel has been supported by the state membership, which voted in November to have him try to get all financial records related to the state accounts so an independent audit could be performed.
Esquivel and other local activists in LULAC have sought state and federal investigations to force a full accounting of the six bank accounts that were set up by his predecessors.
Complaints seeking an investigation have been filed with the U.S. Internal Revenue Service and the Arizona Attorney General’s Office, said Silverio Garcia, the organization’s former education chairman who was suspended along with Esquivel. Officials at both agencies said they could not comment on whether complaints had been filed.
Esquivel, who is not paid as state director, said he could not discuss the attempt to oust him because of the restrictions put on him by the national board. He referred questions to his attorney, David Bodney, who also declined comment.
Esquivel’s supporters say he was targeted for removal because of his efforts to get a full accounting of the state organization’s finances.
The national organization is trying to silence Esquivel to protect politically powerful members from Tucson, and ensure the flow of dollars from corporate and government sponsors is not interrupted by questions about how it was spent, said Jose-Maria Burruel of Scottsdale, civil rights director for state LULAC.
"He is trying to help the organization," Burruel said of Esquivel. "What Sam was trying to do was purify the organization because if the organization is not pure, how can you raise funds?"
But Brent Wilkes, executive director of the national organization, said Esquivel’s efforts to get a full accounting of the money was not behind the attempted ouster. Instead, Wilkes said, he was suspended for the sour relations within LULAC that Esquivel and his supporters created with suggestions of financial irregularities.
The reason for the multiple accounts is that the old leadership from Tucson put the state’s account under the same tax identification number as their local chapter, Wilkes said. While local councils are supposed to maintain separate tax numbers, it was not unusual in the past for them to share the same tax number with the state, he said.
"He was suspended because of the negative, poisoned atmosphere that has occurred in the state between the councils and his failure to try to pull people back together," Wilkes said. "If you are elected as the state director, your duty is to try to unify the organization. It’s not to go and try to find things that might possibly be wrong with a council and make a big fuss about it, and then drag them over the coals in the press. That’s what Sam’s doing."
Esquivel has battled for control of state LULAC financial records since he was elected state director in May 2003. Initially he tried to get records of the single known account that remained under the control of his predecessors, Richard and Mary Fimbres, a politically connected couple who also rose through a Tucson LULAC chapter.
Richard Fimbres is now director of the Governor’s Office of Highway Safety. Fimbres was western regional vice president of the national organization before he was hired to the state job by Gov. Janet Napolitano in 2003.
Mary Fimbres, Esquivel’s predecessor as state director, is an assistant to a Tucson city councilman.
Richard and Mary Fimbres did not return phone calls seeking comment.
When Esquivel, armed with a resolution from the state membership, attempted to get the financial records of what he thought was the single state account, the old guard from Tucson refused to turn over records.
After the Tribune reported on the flap, account records were given to Esquivel by the Tucson-based faction. A "cursory audit" done by a financial officer from the national organization found no improprieties in the account.
It was only after Esquivel was re-elected in May 2004 that he obtained a bank printout showing there was not one but six bank accounts that had the same tax identification number as the state organization. A tax identification number is the nonprofit group’s equivalent of a Social Security number. All but the main state account were controlled by members of the Tucson chapter, according to organization records. A bank document dated June 25 shows there was almost $120,000 in the six accounts, including about $13,520 in the main state account.
Esquivel immediately moved what was identified as the main state account to another financial institution.
Of the five remaining accounts, three were closed on Aug. 17, three days after Esquivel revealed them at a state meeting and the hiring of an independent auditor to trace the money was discussed, records show. A December bank document showed that the remaining two accounts, which held about $24,000 in June, had only about $350 remaining.
LULAC records show Esquivel has been unable to determine where money from the closed accounts went.
Esquivel, backed by the state membership, has sought the bank records related to all of the accounts so an independent audit could be done, according to LULAC records and his supporters. Esquivel sent a series of letters demanding complete financial records to Washington Federal Savings, where the accounts were held, and to Alma Yubeta, the organization’s former state treasurer. Yubeta, who also came up through a Tucson-based LULAC chapter, now works for Richard Fimbres in the governor’s highway safety office.
Yubeta, who said at a November state meeting that she has the financial records, refused to comment when contacted by the Tribune.
Esquivel continued to ratchet up the pressure late last year. A resolution was passed by the state membership during a November meeting compelling Esquivel to enlist the aid of an independent accountant to get financial records related to the bank accounts.
In December, letters were sent to the bank and to Yubeta demanding the records be released. The accountant, Debbie Morton, noted in her letter to Yubeta that LULAC’s constitution as well as government regulations required annual audits be conducted. Since no audit had been done for the past four years, she requested all financial records relating to the organization since May 2000.
Shortly after those letters were sent, Esquivel was suspended. He must now clear all decisions through David Rodriguez, western regional vice president for the national organization. Rodriguez, a former state director, is from the same Tucson council as the Fimbreses, and replaced Richard Fimbres as regional vice president.
Like Burruel, Garcia says the national organization is trying to stop Esquivel from digging further into the financial records of the organization.
"The Hispanic community deserves better," said Garcia, who resigned from the organization in January. "They need to know where their donations are going and that there is accounting. We don’t even know what accounts we have right now, and that’s sick."
Wilkes said the national organization will send the independent accountant who does its taxes to conduct an audit of all the accounts. Wilkes added Morton, the accountant hired by Esquivel, will have access to the records at that time.