News Column

A Magazine’s Secret History

The publishing deal appeared on the agenda several times before it passed.

HISPANIC BUSINESS® magazine
January/February 2002

Since 1998, the USHCC leadership and Hispanic Publishing Corp. have tried to form a business relationship. When a noncompliant board refused the deal three years ago, things took a turn toward the bizarre. In 1998, the USHCC board discussed a magazine project with Hispanic Publishing, but it never came up for a vote, according to former Chairman Massey Villarreal. “We had a concern of competing against our members,” says Mr. Villarreal, now a board member of TAMACC. “We wanted to do more due diligence.” But by January 1999, Hispanic Publishing began circulating a letter, printed on USHCC letterhead and bearing the apparent signature of CEO George Herrera, stating that “Hispanic Magazine will be the 'official’ magazine of the USHCC.” Hispanic Publishing also issued a press release to announce “an exciting new partnership with the U.S. Hispanic Chamber of Commerce. As part of this agreement, Hispanic was named the official magazine of the USHCC.” When Hispanic Business inquired about the letter in 1999, USHCC officials denied the signature was Mr. Herrera’s. The signature, they alleged, was a forgery. Moreover, the officials confirmed that a deal making Hispanic the official magazine of the organization did not exist. According to a letter from Mr. Herrera, the USHCC advised Hispanic magazine not to claim to be the chamber’s official magazine, but no public action apparently was taken. At the time, Arizona businessman Ray Arvizu was chairman of the chamber. When the USHCC board gathered to approve the launch of Hispanic Trends, the matter of the alleged forged letter was never examined, according to board meeting minutes obtained by Hispanic Business. Discussion of the magazine came up on at least three occasions, and at the August 26, 2001, meeting, Sam Verdeja of Hispanic Publishing “began by reminding the board of the long history that ties the USHCC with his company.” But the minutes don’t mention any discussion of the company’s alleged misrepresentation that it was the USHCC’s “official publication.” “We at Hispanic Publishing Corp. do not have personal knowledge of who signs letters on behalf of the USHCC,” Mr. Verdeja wrote in a letter to Hispanic Business. “All we know is that we received the letter from the USHCC and understood it to reflect the USHCC’s understanding of the agreement in place between the parties.” Mr. Verdeja serves as publisher of Hispanic magazine; Hispanic Publishing is owned by Alfredo J. Estrada and his father, Fred Estrada, who is a partner in Pan American Industry, a Florida holding company. The board continues to support the project, despite protests. As recently as November 2001, USHCC Counsel Tom Stahl allegedly instructed the board not to revisit the matter, saying opposition to the deal could subject individual board members to legal liability for “tortious interference with a written contract.” According to sources familiar with the proceedings, the warning effectively muzzled the board’s deliberations. Legal experts disagree with the legal position that board objections could lead to lawsuits. “I don’t believe there is any liability,” says TAMACC attorney Fernando Gomez. Adds Michael Bisesi, director of the Center for Nonprofit Leadership at Seattle University: “Most boards and board members are covered by ‘D&O’ [directors and officers] insurance. Barring negligence, that policy would cover most board decisions. … A board that is told by its staff to stay out of a particular matter may have some serious structural issues to address.” Hispanic Publishing has produced a media kit to solicit advertising for the new publication. It includes a letter with the signatures of Mr. Herrera and USHCC Chairwoman Elizabeth Lisboa-Farrow.



Source: HISPANIC BUSINESS magazine


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