Moreover, in 1999, the chamber had revenues of $3.38 million against expenses of $4.17 million, resulting in a loss of nearly $800,000, according to the most recent Form 990 made available to Hispanic Business by the USHCC. The chamber’s major expenses included salaries and other compensation ($720,559), travel ($466,813), food and beverages ($573,933), “outside services” ($1 million), consulting ($162,196), and printing and publications ($218,269). Annual financial audits of the USHCC may be reviewed by board members at the chamber offices, the bylaws state.
Legally, Mr. Herrera and the USHCC board have authority to make contracts on behalf of the organization. The USHCC bylaws state that the president may sign “what is known as an ‘affinity’ agreement or an ‘exclusive’ agreement,” as long as he has the consent of the board (see accompanying story, “A Magazine’s Secret History”). In fact, the chamber set up the magazine deal under a new entity called Media Ventures LLC, a subsidiary designed to operate as a for-profit corporation. It follows a pattern set by the Hispanics Today TV show, a joint venture between the USHCC and Trans World International, a program syndicator.
But creation of these for-profit partnerships raises issues of how the leadership must account to its members for its actions. At press time, the protests against the deal continued in force. In November, the TAMACC board passed resolutions to send two letters -- one to the USHCC leadership restating TAMACC’s opposition to the magazine contract and a second to Marco Arredondo, J.R. Gonzales, and Maria Guadalupe Taxman, members of the USHCC board, expressing TAMACC’s dissatisfaction with their representation for Region III, which includes Texas.
Local Hispanic chambers contacted by Hispanic Business expressed a range of views about Hispanic Trends. Joel Ayala, director of the Hispanic Chamber of Orange County (California), had not heard of the publication, but he did see why some groups would take issue with the publication, as some chambers feel the USHCC “steps on their toes sometimes.” On the other hand, Vincent Rangel, chairman emeritus at the Mexican American Chamber of Commerce of Illinois, called the magazine a “win-win situation for everyone,” saying it would provide the USHCC with a national platform to communicate its vision and to report on political issues relevant to Hispanic companies.
If the USHCC goes ahead with its magazine plan, TAMACC Chairman Ricardo Calderon speculates that TAMACC “might have to entertain other options that would have significant implications for the USHCC.” He declines to provide any specifics. He says that in the interest of unity among Hispanic nonprofits, however, TAMACC would endorse a negotiated compromise.
“A lot of folks in Texas are shaking their heads,” comments Fernando Gomez, an attorney for TAMACC. Given that the leadership of TAMACC and CHCC were instrumental in forming the USHCC, the latter’s stance on the magazine issue is “frankly an affront,” he says.
Mr. Montes, president of the NAHP, has tried to broker a settlement. “We’re trying to persuade the USHCC to cease and desist on this agreement,” he says. Barring a settlement, Mr. Montes plans to launch a letter-writing campaign, asking NAHP’s 208 member publications and local chambers of commerce to voice their opposition to Hispanic Trends.
“For years we have supported their local members and conventions, so we need the support of local chambers and the USHCC to help us on the issue of procurement [of corporate advertising dollars]. We need to work together to better serve the community. They aren’t doing so by creating an uneven playing field,” Mr. Montes observes. “We have made a final call before we send any letter to members and chambers to get their support that a trade organization shouldn’t be competing with its members.”
Editor's Note: Four months of investigative reporting, involving multiple sources from across the country, went into the production of this article. Some of the documentation has been archived online as special Web exclusive content. The documents and links in this online archive provide context to the article and its subject: The decision by the United States Hispanic Chamber of Commerce (USHCC) to enter into a commercial publishing contract with Hispanic Publishing Corp. (HPC).
Click here to access "Advocate or Competitor?" bonus content.
Hispanic Business editorial staff, HispanTelligence, and freelance writer Frank McCoy contributed to this story.
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