THE VOICE OF CHICAGO'S GAY, LESBIAN, BI, TRANS AND QUEER COMMUNITY SINCE 1985

A black-and-white paper flyer attached to an iron fence on Argyle street on Chicago's North Side advertises a clothing swap and benefit for Howard Brown Health Center ( HBHC ) , which recently announced that it needed $500,000 in 50 days if it is to keep its doors open. Elsewhere, in the virtual world, people have begun Facebook groups and appeals and are hosting and benefits to raise money for the beleaguered organization. There is a palpable sense of shock and fear in a community where many rely on HBHC to provide culturally sensitive and competent healthcare, and rallying cries to save it. At the same time, there is an ever-widening and deepening sense of immense anger that things were allowed to reach this point.

In March of this year, the board announced via a press release that it was placing CEO Michael Cook and CFO Mark Joslyn on paid administrative leave. In the months since, both have since left the organization—Cook announced his resignation and Joslyn was let go. At the time, Steven Phelps, then chair of the board, stated in the initial press release that " [ t ] hese administrative changes pertain to an internal personnel matter which do not impact the mission of Howard Brown Health Center."

As it turns out, nothing could have been further from the truth. On Nov. 4, Mark Andrews, now board chair, and Jamal Edwards, the president and CEO of HBHC since June 1, announced that the financial situation for HBHC was much worse than foreseen and was the direct result of mismanagement of grant funds. Specifically, as previously reported in this paper, the mismanagement was related to the prestigious Multicenter AIDS Cohort Study ( MACS ) grant for which the center was the lead agent, and which is disbursed by the National Institutes of Health ( NIH ) . But in a startling and new announcement, the men said that a restated audit revealed a deep deficit, which puts its services in jeopardy. They also stated that the mismanagement involved "over $3 million of grant funds between 2006 and March 2010."

When Northwestern University gained control of the MACS grant, it was legally entitled to the remaining balance. However, that grant account was overdrawn and HBHC had to draw from its other grant accounts to make up the difference, leading to the current financial crisis where it faces a severe reduction in cash.

To raise cash, HBHC has established a "Lifeline Appeal," asking the community to chip in with donations. The effort appears to have matched with some success; the Center recently announced that it had already reached 20 percent of its goal. An anonymous donor, whose son received care at HBHC, has come forward with a $100,000 1:1 matching-funds challenge grant, with a deadline of Nov. 30.

All of this speaks to the community's support. Still, in conversation with Windy City Times or in more informal gatherings and events, many are deeply angered at the recent turn of events and also suspicious about whether the support will do anything to actually change the functioning of the Center. Looking back, even briefly, at the facility's history, their fears are not entirely unjustified. Founded nearly 40 years ago, the storied healthcare provider is facing what may well be its most difficult period ever, but this is by no means the first time that HBHC has been embroiled in controversy.

In 1974, the year it was founded, the most serious health ailments facing the gay and lesbian community were sexually transmitted diseases like syphilis. In its early years, HBHC organized free buses that roamed the gay neighborhoods and offered free testing. When the AIDS crisis hit in 1981, Howard Brown was the only place that could offer anonymous and culturally competent testing and counseling to gay men. A board was formed in 1976, and HBHC went on to become what it is today, a multimillion-dollar organization. According to its 2008 Form 990, its income was over $16 million dollars and it employs over 200 people. ( An IRS Form 990 is a yearly reporting return that certain federally tax-exempt organizations must file. It provides information on the organization's mission, finances and programs. ) The road to what HBHC has become was paved with personnel and financial turbulences.

In 1985, the situation at the clinic was so dire that this paper felt compelled to write a series of articles detailing the status of the clinic. The second one detailed what it called a "malaise" and the fact that the organization "lost over $100,000" in 1984. Interestingly, this happened right after the clinic got the MACS grant. What followed in the article was a detailing of various convoluted and turgid histories of the relations between board members, of conflicts in leadership and an apparent lack of oversight over financial matters. At the end, Michael Galb wrote, "Much confusion has centered around the financial situation at the clinic. Many people hesitate to give money because they suspect the books are handled in a haphazard fashion." Those lines could easily reflect the situation today.

As the years went on, HBHC became more powerful as an organization, adding more services and hosting ever more elaborate fundraising events. But controversy continued and the mid-to-late 1980s saw HBHC gain and lose five executive directors in as many years. Over the years, HBHC has become less, not more transparent even as it has extended its health care services to a more diverse population.

With this history in mind, the question that has arisen in the community over the past few months is: Why should the public trust that the organization will not simply continue to replicate its previous history? Windy City Times spoke to Edwards for answers to such questions and for details about the center's commitment to an overhaul. Asked why the community should believe that he would bring any fundamental change to the organization, Edwards said he was in accord with the community: "I've told the board I do believe that these questions are valid and should be addressed by the board and there does need to be a change ultimately on both sides of the agency. For a non-profit to function properly, there needs to be two systems that must operate consistently with best practices management and governance. They have to work appropriately for an organization to thrive. We've worked on a lot of our management issues. And I am very actively talking with the board on our governance issues."

Citing specific changes in the way the finances were being managed, he emphasized that there would no longer be any programs that incurred a deficit. Citing the Broadway Youth Center as an example, he said that while it is one of their most successful programs, it often operated on a deficit. This year, it is budgeted to break even.

Asking the community to directly help raise $500,000 might be effective in the short run, but it is not a sustainable long-term solution, and neither is the option of even some employees foregoing their salaries. For such reasons, HBHC is considering taking the step of selling at least some of its assets, the most valuable of which is the building at 4025 N. Sheridan. Edwards elaborated on this plan by admitting that, " [ o ] ur situation right now is the consequence of our mistakes, we know that we can't go to the public and say we have all this debt to repay and we want you to give us a handout to pay back our bills. So we made the decision as an executive team that we really need to start looking at all of our assets and all of our options to be very responsible for the community." He was emphatic that the selling of the building would not mean a disruption of services: "We most likely would look at selling it and leasing it back until as part of our application to become a federally qualified health center, we would have access to federal and state capital money to help us build a new building or to expand the existing one."

Becoming a federally qualified health center raises the issue of whether HBHC, given its financial woes, is likely to get federal funding under the circumstances. Edwards is optimistic about the facility's chances, saying that while "our chances are not as great had [ the problems ] never happened, I also know there are federally qualified health centers that have been through inspector general investigations. The government is not investigating the future management of our funds but the past, and this money will be money for the future. What they will know about our management team will let them know that there's not any risk of misusing their funds."

According to Edwards, the new hires he has brought on board will serve to bring a new culture of accountability to HBHC, and he spoke of two of them as examples. Editha Paras is the new vice president and CFO. Paras, who has an MBA, also has experience in the banking industry and that, according to Edwards, makes her especially qualified to bring a change to HBHC as she "used to be on the side of the bank that had to make decisions about extending credit and knows how important it is to have transparency." Edwards also cited his hiring of Chuck Benya, the new vice president and chief development officer, who has a masters in public policy.

Benya and Edwards have known each other for some years. Benya was most recently chief development officer at Vital Bridges, where Edwards had served on the board of directors and was vice chair of said board from 2008 to 2009. Edwards emphasized that Benya had been at Vital Bridges before he got on the board and that he had no hand in his hiring at the time. But he also said that knowing Benya's quality of work up close was definitely a factor in hiring him at Howard Brown, given the exigency of the situation and knowing that he had to have someone he could trust from the start: "I hired Chuck, with whom I already had a rapport, because I knew he would be able to hit the ground running. And I knew he'd be up for a challenge, and he's done everything I've expected of him and more. He's really committed to community-based fundraising, which is really important to me as well."

Regarding other changes, Edwards cited reduced operating costs, such as cutting out the communications officer. In an earlier interview, he acknowledged that WCT's reporting on the community's frustration with the lack of information directly from the board had also contributed to this decision. In addition, several management positions have been eliminated or consolidated and they are trying to reduce their occupancy expenses by talking to their landlords and seeking concessions. HBHC has also spoken to many of its medical vendors and got concessions to reduce costs from lab fees and medical supplies. In addition, it has a new audit firm, Crowe Horwath. As for public relations, Edwards now speaks to the media directly but Jill Allread of the firm Public Communications Inc. is donating the remaining necessary work.

While these are all significant and necessary steps, the larger question of HBHC's accountability still remains in question, vis-à-vis the board, which, ultimately, controls a great deal of the decision-making and, like any board of a non-profit, also controls how much an executive director can change. Boards are ultimately responsible for matters like financial mismanagement and there have been many calls, including in this paper ( see Tracy Baim's editorial on page 18 ) to have the entire HBHC board replaced. In hiring the 34-year-old Edwards, who was a partner in the prestigious law firm of Kirkland & Ellis, the board has indicated that it wants fresh blood but that may not be enough to satisfy the public.

Windy City Times noted that the annual financial report for 2008 was missing from the website, and Edwards said he working to rectify the matter. In the meantime, he made available a board roster for that year and others. Combined with the online Form 990 it appears that, for the most part, the board is largely intact and even the old board chair under whom the mismanagement occurred, Stephen Phelps, is still around. Phelps was, in fact, a former partner of Michael Cook, who became president and CEO in 2006, when the mismanagement supposedly began. Phelps joined the board in 2008 and is still on it. A look at the center's 2008 Form 990 also revealed that Cook received a salary of $247,690 as well as a bonus of $25,000, listed as a "discretionary bonus by decision of the board of directors," indicating that the board understood his work at the time to be worthy of extra commendation. His compensation the previous year was $175,000.

At the recent press conference this month, Mark Andrews was the only board member present. Edwards told WCT that there would be seven new board members. This would raise the number of board numbers to more than 20, which seems like a large entity, even for such an organization this size. Edwards also added, in response to a query in an e-mail that "At our October board meeting, I asked the board to consider replacing any board members who should move on or are prepared to do so, as soon as possible. As you know, the decision is ultimately the board's."

In light of the many events being advertised as benefits for Howard Brown, WCT asked Edwards if there was any structure to ensure that the funds gathered at these did indeed reach the center. According to him, they have asked all organizers of such events to work directly with HBHC: "We can publicly announce and promote the event, have someone from Howard Brown there to address any concerns. We are going to be putting a "Lifeline Wall" on our website that will allow people to see who has given as part of individual or organization, for people to see that their money did actually get to Howard Brown. But we can't do a lot more, except to ask people to work directly with us so we can keep track of the event and keep track of every dollar."

Eventually, what final steps the board will take—and which are most feasible for an organization in flux—will become evident in the following months. In the meantime, the community continues to both echo its support and its disenchantment with an organization that has literally been a lifeline for thousands over the years. However, as calls for accountability spread, with a faltering economy and the fact that most people are pressed for money, there is also a growing sense of frustration with the structure of the larger LGBT-non-profit world. Along with the call for greater individual and organizational responsibility, several people are also asking: what responsibility does the larger community take in ensuring that this does not happen, beyond calls for cuts and sackings? In the next segment, we will look at more of the financial aspects of this issue; further steps, like the possibility of a "strategic alliance" with the Center on Halsted; and community members' perspectives on the effects of HBHC's problems and possible long-term solutions.