May 8, 2013 at 6:00 pm EST | by Lou Chibbaro Jr.
Trans group struggles with financial crisis
Earline Budd, transgender activist, Washington DC

Longtime activist Earline Budd is reportedly among THE staffers experiencing problems getting paid. (Blade file photo by Michael Key)

Transgender Health Empowerment, a non-profit group that has provided a wide range of services for D.C.’s transgender community for more than a decade, is struggling with a financial crisis that has prevented it from paying its employees on time and has triggered staff layoffs and resignations, according to multiple sources familiar with the organization.

Public records at the D.C. Recorder of Deeds office show that the IRS filed at least 10 liens against THE over the past three-and-a-half years. Most are due to THE’s failure to pay employee payroll taxes, the records show.

Sources familiar with the situation say the liens prompted the D.C. Department of Health to suspend some or all of its funding for THE for HIV/AIDS-related services. The funding suspension reportedly was triggered by a procurement rule that restricts city funding for vendors or contractors that are in violation of the law, including federal tax law, the sources said.

A former THE employee and current client said they each were told by THE staffers that a delay in city funding forced the group to cut back on its drop-in services at its headquarters at 1414 North Capitol Street, N.W., and to limit services to clients by appointment only.

“The whole month of March we didn’t get a paycheck,” said the former employee, who was laid off in April because of THE’s financial problems, the former employee told the Blade.

Among THE employees not getting paid or getting paid late are THE official and longtime transgender activist Earline Budd, THE Director of Programs Brian Watson, and transgender activist Jeri Hughes, sources familiar with the group said.

Top officials with THE and the Department of Health have not responded to repeated requests by the Blade for information about the cause of THE’s financial problems and the status of city funding for the group.

“At this particular time, there’s no comment,” Brian Devine, THE’s finance manager, told the Blade. Devine said THE Executive Director Anthony Hall also had no comment.

“We just had a board meeting and that was one of the issues we spoke of,” said Devine, adding that the board decided not to issue a statement about the situation at the present time.

DOH spokesperson Najma Roberts said she would make inquiries about the THE funding status when contacted by the Blade last week. As of press time this week she had not responded.

The Blade filed a Freedom of Information Act request with the DOH deputy general counsel, Phillip Husband, on April 3 seeking the information that the department has yet to release through Roberts, the press spokesperson. Husband said the department usually takes up to 15 business days to respond to a FOIA request.

“My biggest concern is THE’s clients,” said transgender activist Ruby Corado, director of Casa Ruby, an LGBT community center in Columbia Heights that caters to the Latino and transgender communities.

Corado said some of THE’s clients have been coming to Casa Ruby after being told that THE’s drop in center had curtailed its services.

Corado and other transgender activists called THE the D.C. area’s preeminent service provider and advocate for the transgender community.

They note that THE also operates the city’s only housing facility dedicated to homeless LGBT youth. The facility known as the Wanda Alston House has been nationally recognized as an innovative resource for LGBT youth that offers counseling, employment and vocational training, and other services.

Among THE programs funded by DOH is its highly acclaimed Comprehensive Risk Counseling Services or CRSC program, which offers risk reduction interventions for preventing HIV infection among transgender people, especially transgender women, whom experts say are at high risk for HIV. THE also offers HIV testing and counseling.

“THE is a transgender institution for D.C.,” Corado said. “There are a lot of people counting on its services, especially those living with HIV. It is an organization that cannot go away,” she said.

“So the question I have is what is the Department of Health doing about this,” Corado said. “Why aren’t they talking about what happens to those clients? Are those clients OK?”

Transgender activist Alexandra Beninda, who serves on the D.C. Human Rights Commission, was among those who praised THE for its work in the transgender community but said she was unaware that the group was having financial problems.

She said she hoped the community would rally in support of THE but expressed concern that news of the group’s problems had not gotten out to those who might be willing to help.

Mara Keisling, executive director of the D.C.-based National Center for Transgender Equality, said she, too, was unaware of the THE financial problems.

“They are the centerpiece for local transgender efforts,” Keisling said.

Records of the IRS liens against THE filed with the D.C. Recorder of Deeds show that between March 2010 and earlier this year the group owed the IRS a total of $260,075. The records don’t show how much of that amount was for unpaid taxes and how much, if any, was for interest and penalties.

The records show that THE has since made payments of $91,912 to pay off the back taxes and currently owes the IRS $168,163.

As a non-profit, tax-exempt organization, THE doesn’t pay taxes on its income from donors or from government grants and contracts. The records indicate that most of the money owed is for employee payroll taxes.

Due to THE’s refusal to comment on the matter it couldn’t immediately be determined what caused the underlying financial problems that prevented THE from paying its employee payroll taxes.

Ron Simmons, executive director of the D.C. AIDS service group Us Helping Us, which also receives city funding, said smaller community based groups like THE sometimes encounter cash flow problems when the city takes too long to reimburse the group for its services. He said DOH in the past has taken 90 days or longer to reimburse vendors and service providers.

“Among other things, they are the only LGBT homeless shelter for youth,” Simmons said. “We absolutely can’t let them go under,” he said of THE.

THE’s most recently filed IRS 990 finance report that is available for public viewing is for the fiscal year of Oct. 1, 2009 through Sept. 30, 2010.

The report shows that THE’s income for the year was $960,834 and its expenses came to $1,093,816, with a deficit of $132,982.

Lou Chibbaro Jr. has reported on the LGBT civil rights movement and the LGBT community for more than 30 years, beginning as a freelance writer and later as a staff reporter and currently as Senior News Reporter for the Washington Blade. He has chronicled LGBT-related developments as they have touched on a wide range of social, religious, and governmental institutions, including the White House, Congress, the U.S. Supreme Court, the military, local and national law enforcement agencies and the Catholic Church. Chibbaro has reported on LGBT issues and LGBT participation in local and national elections since 1976. He has covered the AIDS epidemic since it first surfaced in the early 1980s. Follow Lou

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