Opinion: Financial Improprieties at Summer Cultural Festivals?

The weather has been cool lately, but halfway through the summer parade season, parade politics are heating up. In Hempstead, Long Island, a local official and La Tribuna Hispana suggest that the finances and organization of the 6th Salvadoran American Day Festival, scheduled for early August, are suspect.  Beyond this festival, the editorial, translated below, raises questions about the oversight and benefits of cultural festivals, which often cost taxpayers tens of thousands in public safety and overtime costs.

An unusual thing is happening in the town of Hempstead, as it is in all local governments which are experiencing a budget crisis but must deal with costs associated with organizations that are themselves not parts of the governments.  In Hempstead one such organization sponsors the Salvadoran-American Day Festival and the Central American Parade, which take place in August and September respectively.

Livio “Tony” Rosario, member of the Hempstead Board of Trustees (Via La Tribuna Hispana)

Livio “Tony” Rosario, the only Hispanic member of the Hempstead board of trustees told La Tribuna Hispana USA that it is untenable for the town to spend $70,000  in overtime for the local police to provide security at these events, while the organizers contribute only $15,000, and sometimes not even that much…

“They come and ask for a temporary permit, which they use to sign on their sponsors,” Rosario said. “Later, at the end of the event when it’s time to pay up, they say they’ve only lost money, and they pay just a part of the sum which was set as a condition of the permit.  This has got to stop, because it is not possible for us to use tax money [paid by local residents] to make up the difference for activities that benefit only the organizing group and not the whole community.”

He further explained that his statement was his personal opinion, but that he will not rule out bringing the topic up with the town’s Board of Trustees, because it is causing a gap in the town’s finances at a time when there have been many cuts to jobs and services due to the current economic crisis.

“How can we explain to the community that the money which belongs to all of us is being spent with no return for us from the organizers?” Rosario asked. “When we see that only a few benefits, that’s not right.”

We also spoke with [officials from] the office of Mayor Wayne Hall, who confirmed that the costs for security functions and overtime pay exceed $35,000 for each event. They noted as well that they do not know whether the income or profits taken in by the Salvadoran-American Day Festival, organized by four groups, are used to the benefit of the community, or go into the pockets of a few people.

“We often discuss the affairs of our community, and we call together all Hempstead organizations for these talks,” Rosario said. “I personally have never known any of the festival or parade organizers to participate, by which they demonstrate how very much they care about the town.”

Of the directors of the four organizations that present the Salvadoran-American Day Festival, only one of them lives in Hempstead, and of the other three, one owns a house in another state.

The Organizations Remain Silent

La Tribuna Hispana USA has been one of the few media outlets critical of such practices; we have always denounced the lack of transparency in these activities, in which a community is exploited for private benefit under the pretext of promoting its cultural values and diversity.

We asked Nelson Hernández, one of the most visible of the Salvadoran-American Day Festival organizers, to grant us an interview and answer a series of inquiries regarding the matter, a request which we made several times.  We included a condition that representatives of the other three organizations be present, which seemed to us pertinent.  But up to the deadline for publication of this edition, he did not respond to our telephone calls.

It would have been interesting to know how it can be that an event which has been celebrated for six years now can still be losing money for its organizers, and why they insist on continuing to hold the festival in spite of that.  Also, if the offers of student scholarships have in fact been realized at some point or other, who have been the beneficiaries?  We’d like to get a clear report to the community, as promised when these events began — like the famous Fund for Undocumented Immigrants, which was announced with great pomposity at the launch of the first festival we witnessed.  Now we know those were no more than promises.

Another of the questions that comes to mind is that, of the four organizations, two, NYSLA and the Salvadoran Civic Center, are not listed in the register of New York State non-profits.  That is to say, they do not exist as not-for-profit organizations.

Another of the pearls we found is that Empresarios por el Cambio (Entrepreneurs for Change), created in May 2007, has been offering the festival organizers a fiscal conduit for tax-deductible contributions when its 501 (c) 3 status (the IRS designation for non-profits) has been revoked for failing to file annual reports of its activities to the IRS for three consecutive years (according to the web page www.guidestar.org, which reports on all non-profit agencies).

This means that this organization has filed no reports with the IRS since that agency first accredited it in 2008.  The date on which non-profit status was revoked is May 15, 2010, and to this day we do not know whether the situation has been resolved (another of the questions we wanted to ask the organizers).  What is definitely clear is that well-known banks, airlines and other businesses are listed as contributors – businesses which as a rule demand to see a tax-deductible certificate.  So how do they manage that?  This was one of the key questions we wanted them to answer, but up to this point we have gotten only a deafening silence in reply.

Dissatisfied Clients

But there is still more.  In the voluminous publicity packets offered to the sponsors, it seems that “not all that glitters is gold.”  Under the bombastic sponsor categories of Platinum, Gold and Silver contributors, massive publicity on all city press, radio and television media is promised, as well as other attractive perks which the potential contributors would find difficult to verify, for the most part, and whose implementation is therefore left to the good faith of the organizers.

An example of this disenchantment is the case of Las Arepas de Mamá, a well-known Hempstead restaurant serving Latino cuisine, whose proprietor, José García, says he feels very much defrauded by the Salvadoran-American Day Festival’s organizers, since he never got anything they promised.

“Mr. Saúl Linares came here and promised me a whole series of benefits as a sponsor of the event,” García said. “In the end we agreed that I would pay them $4,000, $2,800 in advance and I’d give them the balance on the day of the event.  A few days before the festival, he came to me with some pamphlets to distribute in my store, but after that I got nothing of all that was offered, which is to say that as far as I’m concerned they gave me absolutely nothing.”

“I believe the organizers lack the seriousness that would prevent them from exploiting the good faith of us business people by offering benefits they are unable to deliver,” he said. “When I complained to them, they said they would compensate me, but a few months later a certain Mr. Guerrero appeared, speaking in the name of the organizers, who wanted me to pay the remainder of the original $4,000 I’d agreed to.  I refused to accept that.”

The Central American Parade

Meanwhile, the Central American Parade, organized by Central American Parade, Inc., whose president for the past several years has been Salvadoran Martha Montero, is not exempt from complaints and observations.

Founded in the mid-80s, the Parade was a response to an initiative by a group of community leaders and organizations with the purpose of supporting an amnesty for undocumented Central American immigrants (especially those from El Salvador, which was in the midst of civil war in those years.)

After some time had passed, it evolved into a large manifestation of their cultures by the Central American communities who live on Long Island.  What was also very evident were the struggles for control among the directors, regarding the sponsorships and the sale of spaces for the festival after the parade which, every September 15, celebrates independence in Central America.  In one case two organizations that claimed control of the parade even went to court; the present organizers won, though they no longer have the vigor of earlier years nor the ability to convene thousands of volunteer assistants.

Promoting “Salvadoran-ness” or a Business Opportunity?

It is common knowledge that the Salvadoran-American Day Festival has been celebrated in the town of Hempstead for the past six years, taking it’s impetus from Congressional Resolution HR 721, introduced by Representative Hilda Solís, which established August 6th as Salvadoran-American Day, as of July 18, 2006, in recognition of the effort and work by this large United States community.

The first Festival was held in Hempstead in 2007.  Participants included groups which are no longer part of it, including some well-known community leaders who are no longer among the current organizers.  Then, offerings like student scholarships and support for cultural and civic organizations were the hallmarks and banner of a great celebration that would attract thousands of Salvadorans in celebrating a special day, and connecting with the Augustine Festivals which are celebrated around the same date in El Salvador.

Those who have produced the event since then have formed an Organizing Committee made up of Nelson Hernández, representing Empresarios por el Cambio (Entrepreneurs for Change), Juan Carlos Molina of Red de Comunidades Salvadoreñas (Salvadoran Community Network), Francisco Guerrero of the NYSLA soccer academy, and Ms. Nubia López of the Centro Cívico Salvadoreño (Salvadoran Civic Center), who are for all practical purposes the owners of the event.

This Festival is a year-round business, even employing exclusive sales personnel, who work year-round merchandising the festival and signing up sponsors, including the well-known Salvadoran Saúl Linares, who admitted to this editor that he works full-time for the organization.

The web page www.festivalsalvadoreño.com does not give much information about the organizers, nor does it mention by name anyone responsible for its activities.  Until a few weeks ago one of the web site’s pages said that part of the money collected is used for an agricultural project in El Salvador, though it gave no further details; this claim has now been removed without explanation.  (This is another of the questions we wanted the organizers’ answers on.)

There is an abundance of details about the publicity packages offered to the sponsors, which range between $5,000 and $20,000 each in value, promising banners, posters, advertisements in magazines and newspapers, television and radio, as well as thousands of leaflets leading up to the event.  In addition to this there is the sale of dozens of kiosks in which not only food and beverages are offered for sale, but also souvenir products and services of various kinds directed at the market of Salvadorans who live in Long Island, all of which is estimated to bring in very large amounts for the organizers, who get a good “harvest.”  (Note: August is harvest time in El Salvador, so the Spanish makes a pun – “hacer agosto” means to reap well.)

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