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Controversy swirls around news reports about financial problems at local NAACP chapter under Jo Ann Hardesty.

PORTLAND TRIBUNE FILE PHOTO - Jo Ann HardestyNews reports of financial mismanagement in the Portland chapter of the NAAACP when Jo Ann Hardesty was president have become an issue in her campaign for the City Council.

Hardesty's opponent, Multnomah County Commissioner Loretta Smith, has accused Hardesty of stealing money from the chapter, based on a Sept. 18 report by Oregon Public Broadcasting.

"To steal money from one of the most storied civil rights organization is not just illegal, it's unconscionable. Let's call this what it is, Jo Ann Hardesty embezzled money from the NAACP," Smith said. "Do the right thing Jo Ann: return that money."

Robert Phillips, Multnomah County's former equal opportunity/affirmative action officer, has filed a complaint with the Oregon Department of Justice accusing Hardesty of "misappropriating" the money.

But Barry Jerkins, an officer for an NAACP organization that includes the Portland chapter, says he has seen no evidence any money was stolen.

"I say, show me the proof," says Jerkins, who serves as the ombudsman for the NAACP Alaska Oregon Washington State-Area Conference. He has known Hardesty for years and calls her "a person of integrity." Hardesty denies doing anything wrong.

"This is another desperate attempt to tarnish Jo Ann's credibility by a candidate who seems to have nothing else to offer," says Hardesty campaign manager Anna Nguyen. "The Portland branch of the NAACP is indisputably in a much stronger and more respected place than it was three years ago, and that is due to Jo Ann's vision, leadership and deep connections with communities across this diverse city."

Hardesty, a well-known local activist who served in the Oregon Legislature and owns a consulting business, became chapter president in 2015 and served until earlier this year, when she resigned after questions were raised about whether an NAACP officer can run for office without stepping down.

The spending problems, first reported by the Portland Tribune on Aug. 25, include a $300-a-month stipend Hardesty was paid that she failed to report on her taxes. OPB then reported that Hardesty also signed a $9,000 check from the chapter to her own consulting firm for work on a civil rights project it co-sponsored. She did not pay taxes on it, either.

Hardesty has acknowledged the need to refile her taxes, but insists she did nothing wrong, saying the chapter did not send her the 1099 form required to report taxes because of turnover in the treasurer position. But OPB also reported the chapter's executive committee did not vote to authorize the contact, as required by organization rules.

"This is a clear case of using organizational funds for self-benefit," Smith contends. "First there is the concern that a volunteer officer of a nonprofit organization would take a contract for their own consulting business without a vote of the board. Then there is the concern of writing themself a check without getting the required second signature. I couldn't think of a more clear case of using an organization for self-benefit."

Jerkins, whose position requires him to received complaints from and about NAACP chapters, says such problems are typical of small nonprofit organizations.

"These are volunteer positions and people frequently volunteer to do them, and then don't follow through," says Jerkins, adding that he found the Corvallis chapter of the NAACP in financial disarray when he became president of it in 1990. He also faults the national organization for not educating new board members about their responsibilities.

And Jerkins says chapter presidents need financial support like stipends to offset their out-of-pocket expenses, which he claims can amount to thousands of dollars a year. Tax laws require officers to submit receipts for expenses, however, which Hardesty did not do.

This is not the first time that Hardesty has admitted filing problems with her consulting business, however. The Portland Tribune reported on Aug. 21 that she did not register her consulting business with the Secretary of State's Office, as required by law. Smith criticized her for that, noting that city commissioners oversee tax-funded bureaus under Portland's unique form of government and should understand such requirements. Hardesty admitted failing to register her business, saying it was something many small businesses inadvertently failed to do.

Nonprofit organizations must also register with the state and file annual reports with the justice department. The Portland NAACP chapter's filing lapsed when Hardesty was president, and it also failed to file require annual financial reports with the national organization, opening the local chapter up to almost $6,000 in penalties fees and late payments.

"I believe all organizations must operate with integrity and for the public good," Phillips said in his justice department complaint.

Hardesty's campaign provided the Portland Tribune with documents related to the project she was paid to work on. It was funded by a grant from the Piper Fund to the Asian Pacific American Network of Oregon. That organization, known as APANO, signed a $10,000 contract with the Portland chapter of the NAACP to help staff the project. Hardesty signed the contract and was identified as the consultant.

The project produced a report titled, "Pathways to a Racially Just Democracy." It lists Hardesty as a member of the Lead Work Group. It identified multiple strategies for advancing minority representation in governments, beginning with "the City of Portland, where opportunity for reform is high."

To read a previous Portland Tribune story in the issue, go to tinyurl.com/yburb5e9.

OPB is a news partner of the Portland Tribune. To read their story, go to tinyurl.com/ycqhsdcv.

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