Pride Director Fired After Alleging Financial Misconduct

by Leslie Wolf Branscomb

This week’s firing of San Diego LGBT Pride Executive Director Ron deHarte, and the subsequent resignation of two staffers, has left the organization in an uproar and led some to question the viability of its upcoming events.

“Pride as we know it, under the leadership as we know it, is going to be impossible,” said Ken St. Pierre, the group’s former Director of Development. St. Pierre quit Jan. 6 in protest of deHarte’s termination the day before.

San Diego Pride, founded in 1974, is the nation’s fifth-largest such organization supporting the rights of gay, lesbian, bisexual and transgendered people. The organization’s annual summer parade and two-day festival are its major event, drawing an estimated 175,000 spectators, in addition to nearly 10,000 parade participants. The 36th annual Pride celebration is scheduled for July.

A more pressing concern is the upcoming four-day Consolidated Association of Pride, Inc. annual conference, which is being hosted by San Diego Pride. The conference will take place Jan. 21-24 at the Sheraton in Mission Valley. “Right now what we have going on is a major exodus by volunteers and coordinators,” St. Pierre said Jan. 7. “My phone has been ringing off the hook since I left. I’ve had sponsors calling me, all of whom are telling me they’re pulling out,” he said. “If those people are not there, I really don’t know how they’re going to pull this conference off.”

DeHarte, who was Pride’s executive director for four years, was fired Jan. 5 after accusing the Pride board of directors of misappropriating funds.

In the aftermath there was plenty of blame to go around, with finger-pointing and accusations flying both directions as the nonprofit organization dealt with the fallout.

The allegations stemmed from a board decision made in October, when three of the five members of the Pride board of directors voted to pay a $5,000 stipend to the board chairman, Phillip Princetta. Two of the board members resigned in December. On Jan. 6, St. Pierre and Production Assistant Jeff Redondo resigned, leaving Pride with a staff of three full-time and two part-time employees.

St. Pierre said after deHarte was fired, the three remaining members of the board of directors — Princetta, Treasurer Mike Karim and Secretary Carl Worrell — called a staff meeting and told their side of the story, saying the payment to Princetta was not improper, and was only in consideration for his many years of work for Pride.

“They told us their version of the story, which in my personal opinion was a self-serving pack of lies,” St. Pierre said.

St. Pierre said the payment to Princetta violated the organization’s bylaws, which clearly state that directors are not to be compensated. “That is very clear. There is no gray around it,” he said.
“When I heard what was going on I was completely shocked,” he said. “There was no question about this. This is very, very wrong on every level,” St. Pierre said, adding that he considers deHarte an excellent leader.

St. Pierre said he quit because he felt he could no longer do his job as Pride’s chief fundraiser. “I can no longer (ask for donations) if the leaders of this organization are choosing to pad their wallets with it.”

The night deHarte was fired, the Pride board issued a press release and open letter to the community, promising the $5,000 would be repaid. The one-time payment to Princetta, who began volunteering for Pride in 2000 and joined the board in 2002, was “given of pure intention, lack of malfeasance and just plain ordinary love for an individual who has donated literally thousands of hours of his time and energy at the expense of his own business and personal life to this organization,” according to a statement. The board went on to “wholeheartedly apologize for its indiscretion.”

“If there is anything this board has learned from what we call the pedophile crisis of 2005, is that perception is everything and that absolute transparency is the order of the day,” said the statement, referring to a scandal a few years ago in which two volunteers and one Pride staff member were forced to resign after it was discovered that they were registered sex offenders.

“Never under any circumstances whatsoever did the board intend to hide or mitigate this transaction,” the letter said of the payment to Princetta.

DeHarte, however, described a different scenario.

“A board decision was made very secretively over a period of months and I was never consulted about it,” he said. DeHarte is calling for the resignation of the board, including Princetta, saying they violated their fiduciary duties and the organization’s bylaws.

DeHarte said that on Dec. 17 he told the board he thought Princetta should repay the money and resign. He said he advised them that if the money was not repaid during 2009, it would have to be reported to the IRS on the nonprofit’s form 990 filing, and the transaction would certainly be flagged as unusual in an upcoming audit. DeHarte said the board did not take his advice.

On Jan. 4 deHarte sent a strongly-worded three-page letter to the board members calling for their resignations. “I feel the board has not acted in the best interests of San Diego Pride or the community. The loss of public trust will challenge this organization for the foreseeable future,” deHarte wrote.

The following morning, Jan. 5, the board members walked into deHarte’s office at the group’s North Park headquarters and fired him. “They said we just wanted to let you know that your services are no longer requested,” deHarte said. He said he was given no further explanation.

Princetta has steadfastly denied any wrongdoing, and said he believes the board is being set up for a wrongful termination suit by deHarte. Princetta said deHarte’s termination was not due to his complaints about the payment, but that he had been at odds with the board for a long time and was nearly fired twice before.

Princetta said that although the original check has long since been cashed, he will repay the money. He did not indicate when the repayment would occur.
There is no indication deHarte will be rehired.

The board’s Jan. 6 open letter to the community apologized for the payment, but also cast deHarte’s actions in a suspicious light. The letter said when deHarte approached the board members Dec. 17 he proposed “a plan that he said could make this entire issue go away” — that Princetta resign prior to Dec. 31, so the stipend would not have to be disclosed to the IRS. “From a legal standpoint, Dr. Princetta and the Board knew this idea was inappropriate and certainly not transparent,” the letter said. “One can only imagine our dismay that the Executive Director of this outstanding organization would devise such a plan.”

DeHarte characterized his actions quite differently. “They’re mudslinging now,” he said. “My suggestion to them was to return the check so we can reverse the transaction … this was sound and solid advice. If the money was returned no payment would have to be reported, so we could bring closure to this.”

Even if the money is repaid now, it’s too late to avoid a negative impact on the organization, deHarte said. “Without any question, it will be noted as a material issue in the 2009 audit of the organization by the CPA,” he said.

“The real issue at hand is there’s been a misappropriation of funds and poor decisions have been made by the board, and now there’s a wrongful termination,” deHarte said.

Princetta believes deHarte’s actions were carefully orchestrated — including the subsequent resignations of the two staffers — to back up his plans for a wrongful termination lawsuit. “This was all deliberately staged to occur at this time,” Princetta said, adding that deHarte knew about the payment in October, when he was directed to cut the check. “If he disagreed with it so badly (why did) he wait until Dec. 17 to say that?”

The subsequent resignation of St. Pierre and Redondo was a surprise, he said. “In my mind, it was a planned setup. It just seemed odd,” Princetta said.

He said the board decided to let deHarte go because of a “continual disparity” between them. “We felt like information wasn’t coming through to us like it should.” He also pointed out that the executive director must answer to the board. “You’ve got an employee going after the employer, is what we have here.”

Princetta said there were no secret meetings, and that the board may meet whenever it pleases. The decision to pay the stipend was not made at one of the board’s regular meetings, which usually take place the third Wednesday of each month. However, he said, it was reported in the minutes. Pride officials have not responded to a public records request for a copy of the minutes in question, made by the Uptown News on Jan. 7.

Princetta said he did not vote on his stipend. Three of the remaining board members voted for the payment and one voted against. Two of those members have since resigned, including Romer De Los Santos, who voted against it.

“There was nothing that was corrupt about it,” Princetta said. “If it was a mistake — and it may be a mistake and we see that now — it was never done with any bad intent or malfeasance.”
DeHarte stood by his opinion. “There’s a right way to compensate your board,” he said. “To do it publicly, to discuss it at a board meeting and document the process, and that just didn’t happen. This truly is just a misappropriation of charitable funds.”

Asked whether he plans to sue for wrongful termination, deHarte said “My interest is to be back at work. I have no intention to bring harm to the organization.”

“I’m going to continue to do the right thing for the organization,” he said. “I’m passionate about the work I do for Pride. I will continue to stand for what I think is right and call upon the complete board to resign.”

Princetta said the board members have no intention of resigning, at least for now. “I’ve been with San Diego Pride for eight years … so we’re not going to just walk away and let the organization flounder,” he said. “Pride is a very strong organization. It will go on, and this will be forgotten.”

An online petition was posted Jan. 7 at www.thepetitionsite.com, calling for the resignation of the three board members and the reinstatement of the three staff members. In its first four hours online the petition had been signed by 42 people.

There will be a public town hall meeting Jan. 10 at 6 p.m. at the LGBT Center in Hillcrest, 3909 Centre St., to discuss the situation.

District Three City Councilman Todd Gloria issued this statement Jan. 7: “San Diego Pride is of incredible importance to our community. I look forward to working positively and productively with the community and the board to ensure appropriate oversight and governance measures are in place so its critical contributions to our City continue.”

The first gay pride march and celebration was held in San Diego in 1974, though the nonprofit organization, San Diego LGBT Pride, was not officially founded until 1989. Each year the group gives tens of thousands of dollars in donations to other organizations that support gay, lesbian, bisexual and transgender rights and that provide services to the community.

San Diego Pride’s most recent Form 990, filed with the IRS, shows that in 2008 San Diego Pride took in contributions and grants of about $1.16 million, up from $1.09 million in 2007. The statements also show that deHarte was paid $112,366 in 2008 — a substantial raise from his 2007 salary of $86,625.

Leslie Wolf Branscomb has been an editor and journalist for 27 years, writing primarily about politics and law for the San Diego Union-Tribune, Los Angeles Times, Associated Press and others.
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San Diego LGBT Pride Board Terminates Executive Director

San Diego LGBT Pride’s Board of Directors today announced the dismissal of its executive director, Ron deHarte, citing irreconcilable differences over the direction of the 36-year-old organization.

Pride Board Chair, Dr. Philip Princetta, said the organization is reviewing new management options, which will be discussed throughout the coming month. Princetta, who has served on the board since 2002 and became chair in 2005, emphasized that San Diego Pride has an expert staff in place that is well-trained to carry the organization in the interim, despite two staffers who resigned after Ron’s termination was announced.

“Ron has had an enormous and positive influence on San Diego Pride’s growth and success, and has built a self-sustaining, capable staff. But there comes a point in history when change is necessary and the board felt that now was the time for that change.”

deHarte’s dismissal, he adds, was based on renewing the direction of San Diego Pride, which lead to disparities in decision-making processes — the most recent involving monetary recognition of Dr. Princetta for his longtime service to the Pride Board. That award was issued in October with board approval in the amount of $5,000. Dr. Princetta said he will pay back the award to San Diego Pride.

Dr. Princetta is available for interviews to discuss the details of the monetary gift, as well as the charities and annual events that San Diego Pride provides the LGBT community and its supporters.
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An Open Letter to Our Community from the San Diego LGBT Pride Board of Directors

January 5, 2010

The Board of Directors of San Diego LGBT Pride wholeheartedly apologizes for its indiscretion by providing a onetime only stipend to its chair Philip Princetta in early October 2009.

The stipend in the amount of five thousand dollars was given of pure intention, lack of malfeasance and just plain ordinary love for an individual who has donated literally thousands of hours of his time and energy at the expense of his own business and personal life to this organization and the community it serves.

If there is anything this board has learned from what we call the “pedophile crisis” of 2005, is that perception is everything and that absolute transparency is the order of the day. Never under any circumstances whatsoever, did the board intend to hide or mitigate this transaction.

Understanding that the former Executive Director did indeed bring this organization forward in many ways, there has always been a disparity or tension between the Board and the recent ED regarding transparency of information between the operations aspect of the organization and the board of directors whom are responsible for oversight of anything and everything having to do with San Diego Pride.

On December 17th 2009, over two months after the check for $5,000 was drawn, two board members were approached by the Executive Director with a plan that he said could make this entire issue “go away”. That plan was for Philip Princetta to resign prior to December 31st, 2009. By doing so, he would not be listed on the IRS 990 form and as such the stipend to our board chair would never have to be disclosed.

From a legal standpoint, Dr. Princetta and the Board knew this idea was inappropriate and certainly not transparent. One can only imagine our dismay that the Executive Director of this outstanding organization would devise such a plan.

Ninety-nine percent of what this community has read so far on the issue is inaccurate and based on pure spin. It is a plan to remove the current governing body of this organization and “take it over”, plain and simple.

The Board of Directors of San Diego Pride has no intention of resigning. Instead we are going to apologize to our community and ask them to open their hearts to forgiveness. We will rebuild our board of directors and the minute we feel comfortable with board leadership that will continue the tradition of San Diego LGBT Pride as a community organization we will indeed let go and turn the organization over.

We want to make it crystal clear that our community understands San Diego LGBT Pride is a strong, solvent, charitable organization that they should always be proud of.

As pure as the intention was behind it, the stipend paid to Philip Princetta will be paid back to San Diego LGBT Pride in full.

The Board of Directors of San Diego LGBT Pride