In secret, behind locked gates, our Nation's Oldest City dumped a landfill in a lake (Old City Reservoir), while emitting sewage in our rivers and salt marsh. Organized citizens exposed and defeated pollution, racism and cronyism. We elected a new Mayor. We're transforming our City -- advanced citizenship. Ask questions. Make disclosures. Demand answers. Be involved. Expect democracy. Report and expose corruption. Smile! Help enact a St. Augustine National Park and Seashore. We shall overcome!
Saturday, August 27, 2022
DC LGBTQ+ nonprofit Casa Ruby was financially mismanaged for years before its closure. (WAMU, DCist)
From WAMU and DCist, a detailed investigative story about a dodgy non-profit, apparently absconding with funds to El Salvador:
LOCAL NEWS | AUG 26
Local LGBTQ+ nonprofit Casa Ruby was financially mismanaged for years before its closure
This story was produced by El Tiempo Latino. La puedes leer en español aquí.
While Casa Ruby in D.C. faced funding cuts and allegations of financial irregularities, its founder, Ruby Corado, focused on consolidating the growth of a new organization she called Casa Ruby, El Salvador Chapter.
“The Mayor’s office was asking that two people were appointed to sign the checks but she didn’t answer. She left for El Salvador and no longer answers,” explained Paty Hernández, Casa Ruby’s former manager of Latino and immigrant services. Hernández is one of nearly a dozen former Casa Ruby employees interviewed for this story.
Earlier this month, the D.C. Office of the Attorney General said it has evidence Casa Ruby’s administration did not operate transparently or with sufficient oversight. The office said the organization’s actions violate D.C.’s Nonprofit Corporation Act, which regulates how these entities utilize their funds.
When asked about the possibility that Casa Ruby’s funds may have left the bank accounts in D.C. for El Salvador, a source from the attorney general’s office said there is information some money was withdrawn from the bank, but, for now it is not possible to specify where those funds went.
However, the attorney general’s motion for a temporary restraining order to freeze Casa Ruby’s bank accounts says “Corado has claimed she established an organization in El Salvador, and has been moving nonprofit funds from Casa Ruby in the District to El Salvador. Once in El Salvador, those funds may be unrecoverable.”
In fact, on April 3 of last year, Corado appeared in a photograph, published on the Casa Ruby El Salvador Facebook page, with Brenda Oriana Rosales Navarro, deputy director of the Gender and Diversity Office of the Ministry of Culture and the National Youth Institute, a Salvadoran governmental entity. The post said Casa Ruby, El Salvador Chapter would soon open its doors and provide programs in “education, housing, health, and legal services.”
According to the Foundation Group, a company that provides consulting services for nonprofits, the IRS does not allow a domestic charity to be a “money conduit” for a foreign entity. “A charity cannot exist for the purpose of financially assisting another foreign charity, ” the company’s website states.
In emails obtained by El Tiempo Latino between Corado, several employees, and the Mayor’s office, it was reported that Corado did not deliver an updated organizational chart for the board of directors that Casa Ruby should have submitted to the D.C. government. She also failed to file income tax returns for 2021 and the organization’s annual reports.
On Oct. 1 of last year, as the fiscal year was beginning, Corado announced in a Facebook Live broadcast that she was resigning as executive director of the organization. However, until the attorney general’s office asked the D.C. Superior Court to freeze the entity’s bank accounts this month, Corado was the only person with access to and control of the money.
“I have made the decision to resign from my role as Executive Director, effective today, which is the first day of the new fiscal calendar,” Corado said in her video.
By that time, the administrative problems and lack of transparency had already caused a suspension of thousands of dollars of government funds. The first cut occurred in August 2021, Hernández told El Tiempo Latino. The news was reported by DCist/WAMU at the end of September of the same year, four days before Corado resigned as head of the organization.
Corado began traveling to her home country in early 2021 to lay the groundwork for Casa Ruby, El Salvador Chapter. On June 1 of that year, two months before the suspension of funding, she officially announced the creation of the organization’s headquarters outside the United States. A month earlier, she already had a team in place, according to a Facebook post from the El Salvador Chapter.
Ruby Corado also serves as executive director of the agency in El Salvador.
“Thirty years ago, I founded an organization in Washington D.C. that was dedicated to serving marginalized people. Today, we are in El Salvador. I am closing a personal chapter after 31 years, leaving behind an international platform, and we are basically bringing Casa Ruby to El Salvador,” Corado said at an event in the capital city, San Salvador, where the organization appeared as the main sponsor of the 2021 and 2022 Pride Festand the Pride Parade.
A month before The Washington Post published an investigation exposing Casa Ruby’s debt to employees, Corado was parading on a float in this year’s Pride Parade, surrounded by members of the El Salvador Chapter in the streets of San Salvador.
The nonprofit, registered in El Salvador, uses the same logo as its D.C. counterpart and the mission described on both Facebook pages is verbatim the same.
Abuse of power
Complaints from employees and clients are not new. In 2018, there was already discontent due to the lack of pay and low salaries received at Casa Ruby.
Hernández, the former manager of Latino and immigrant services, came to Casa Ruby in 2014, after meeting Corado in San Salvador the same year. Before moving to the United States, Hernández helped found one of the first LGBTQ organizations in El Salvador: ASPIDH Arco Iris, which has been working on behalf of the community for more than a decade.
She told El Tiempo Latino that Casa Ruby owes her $7,500 in unpaid wages.
“I feel shattered. I can’t say for sure that she stole anything, but I ask for an investigation in the name of the legacy left by many and by Casa Ruby itself. I didn’t know how much money Ruby received. Now, I wondered how it was possible that she had so much money and there wasn’t enough to cover certain needs we had,” said Hernández, who was the organization’s manager of Latino and immigrant services. “She said she was leaving, but, on the other hand, she kept signing checks. Hopefully, Ruby will come along and have an ace up her sleeve. There must be an investigation, regardless of who is to blame.”
Another former employee affected is Taylor Chandler, who said she was in charge, of securing funds, recruiting volunteers, and organizing talks or events for Corado to talk about the work she was doing.
Chandler claimed that she is owed just over $3,000 since 2018. In addition, she said that during the time she worked for the organization, the payment of salaries for all employees was repeatedly delayed for days, and sometimes even weeks.
“We were all paid low wages. I was making $20 an hour and getting paid for 48 hours a week, when, in reality, I was working more than 60 hours,” Chandler said. “I didn’t know how much [Corado] reported in salary, but I figured it was good, because every month, she was buying Louis Vuitton handbags and designer shoes.”
For the former employee, it was “unpleasant” not to receive her salary on time, in stark contrast to Ruby’s actions. “On one of those occasions, she went to Mexico to have plastic surgery done, and we hadn’t been paid. She preferred to go for cosmetic work instead of paying us,” she said.
According to Chandler, many times Consuella López, who appears as a member of the organization’s board of directors on the 2020 tax return, paid the organization’s outstanding debts with her own money or with her credit card.
Chandler also said that Larry Villegas — now director of the D.C. Mayor’s Office of Human Rights — worked at her side for a while recruiting volunteers but was fired for questioning the shortfalls in payments. The same allegedly occurred with other workers who were also raising questions.
Both López and Villegas were contacted for statements on the case, but the former did not respond to El Tiempo Latino and the latter said he had no comment to make on the matter.
“Everything was like an abusive relationship. We stayed or said nothing because we needed the job,” Chandler said.
Where are the millions?
None of the former employees and clients interviewed during this investigation knew how much money Corado reported as salary or how much Casa Ruby received in subsidies or grants from local government entities.
D.C. Mayor Muriel Bowser asserted that the Mayor’s office cut off support for the organization long before the complaints surfaced.
“It has been a long time since we discontinued support. The problems with Casa Ruby have not happened in the last few weeks; we removed ourselves from their operations much earlier,” Bowser told El Tiempo Latino.
Laura Zeilinger, Director of the D.C. Department of Human Services (DHS) confirmed that DHS previously disbursed money to the nonprofit to pay employee salaries and rent for the locations it operated.
“The money owed is part of what is being investigated. The District did not contribute to any more funds while Casa Ruby was administering services under an ongoing grant. The programs ended. There is a process that we follow,” Zeilinger told El Tiempo Latino.
Hernández said there was often no money to cover basic administrative needs. Computers did not have the software to run, nor did they have operating systems to write Word documents or Excel spreadsheets.
She learned in 2020 that the organization was receiving millions of dollars in grants through a conversation with Ruby’s accountant, Nelson Ayala from Ayala, Vado & Associates, who Hernández had noticed was the one who prepared the checks and payment for employees.
“She had the signatory power for checks, but who knew how much money there was; it was Ayala & Associates. That is why I am asking for an investigation,” Hernández said.
Chandler learned about how much money Casa Ruby was receiving only after news reports on the closure came out. But she said while she worked there, Casa Ruby usually brought in $15,000 to $30,000 dollars per month through PayPal alone. Chandler alleged that whether it was a business account or a personal account, those funds went directly to Corado.
“There’s always excuses and reasons for everything that happens to poor Ruby Corado. And the reality is, she’s a manipulator. And she’s very in control and knows what she’s doing,” Chandler said.
In a motion filed before the D.C. Superior Court to freeze Corado’s access to Casa Ruby’s finances, the attorney general’s office notes that Corado told DHS the Board of Directors of Casa Ruby — which was not operating — had approved her to use $500,000 to open a youth care home in El Salvador.
And although it is no secret that Corado opened Casa Ruby operations in El Salvador, El Tiempo Latino did not find any record or document to substantiate that the board of directors approved half a million dollars in donations from Washington D.C. to be invested in the Central American country.
The motion also said that Corado made “continuous misuse” of Casa Ruby funds despite “pretending” to have resigned as executive director. According to documents and tax returns, Casa Ruby received $3,832,704 in 2020 and $3,456,018 in 2019.
These funds were administered solely by Corado, contrary to the oversight provisions in D.C.’s Nonprofit Corporations Act.
In total, according to the attorney general’s office, Casa Ruby received $9.6 million in grants over the past five years. Since 2012, there are no records of an active board of directors that controlled or approved the use of the organization’s funds.
The attorney general’s motion also says “there are” records that indicate that Corado withdrew $60,000 to pay personal debts for credit cards, meals, and trips to El Salvador. This was also not approved by a board of directors, Deputy Attorney General for the District of Columbia Kathleen Konopka told El Tiempo Latino.
Corado is listed as the organization’s executive director from 2014 to date. In 2014 and 2015, she reported a salary of $31,895 annually. In 2016, it increased to $132,380; that is, she added $100,482 to her salary in two years.
2016 was the first year in which the organization reflected “executive compensation” expenses. Then, Casa Ruby reported $872,251 in this category.
Executive compensation is intended to pay leaders, managers, and executive employees of the organization. On the tax returns from 2014 to 2020, this category includes Ruby Corado, Jack Quintana, Hassan Naveed, and Consuella López. — who appear on documents as key employees and who, according to the documents, were each paid compensation of $38,208 in 2020. Corado was the only one who had access to the executive compensation funds.
In 2017, Corado’s salary increased again. Her reported income was $183,333. The exact same amount is reflected as executive compensation expenses.
That year, the budget for employee salaries was $1,184,777.
In 2018, Corado’s salary increased again, according to the income tax return. This reflected an annual salary of $249,999 and the same amount was used to pay executive compensation. The document states that the organization allocated $1,530,869 to pay salaries of employees, who by then were already complaining about the lack of payments and low salaries.
For 2019, the director’s salary and executive compensation were the same as the previous year. The total for salary payments amounted to $1,575,547.
Although Corado told Casa Ruby’s employees that the institution did not have funds to settle the salaries owed or to purchase administrative materials, in 2020 the amount earmarked for salary payments, as reflected on the tax return, was $1,908,580.
Ruby Corado ended 2020 with a salary of $260,416.In seven years, her annual income from Casa Ruby funds increased by 800%.Executive compensation was $450,754, as in previous years, at her complete and sole discretion.
Since 2013, when Corado started as executive director of the entity, until 2020, her salary increased eight times. From starting out by earning $31,895, she ended last year earning $260,416.
Corado was both payer and payee
A nonprofit organization is a legal entity operated by a group of people who seek to contribute a social benefit, not a private or monetary one.
Andrea Ferster, a private attorney who specializes in tax-exempt organizations, pointed out that they must meet certain legal requirements in order to operate. These include submitting an annual report and having a board of directors of at least three members.
“D.C. has a law that lists those requirements. The role of the board of directors is to manage the activities and relationships of the organization. If you don’t have a board like that, you are not operating in compliance with the nonprofit codes,” Ferster told El Tiempo Latino.
Corado, in addition to being the executive director and the only one with access to the entity’s funds, is listed on its Certificate of Incorporation as Casa Ruby’s governor, executing officer and agent of Casa Ruby.
Abdur Rahim Briggs, president of the D.C. nonprofit Project Briggs, which focuses on supporting urban projects and cultural events for diverse communities, questioned the way Casa Ruby and its executive director operated.
“The executive director of the organization must answer to the board of directors, and it is the board that has control of the organization’s funds because they should know what is being done with that money,” he said.
In other words, she skipped this step and approved her own salary increases and other payments that should have required board approval.
Not a fugitive
Konopka, the deputy attorney general, reiterated that her office brought the action against the organization and Corado under common law, based on evidence.
“The organization was not functioning properly. It did not have a functioning board of directors,” she told El Tiempo Latino. “In fact, if that board of directors had existed, it would not have been able to operate together with Corado, because she was the only signatory and the only one who controlled Casa Ruby’s bank accounts.”
Since it was the agency behind the motion to freeze Corado’s access to those accounts, the D.C. Office of the Attorney General is formally committed to continuing to see what it can uncover. However, the investigation remains a civil case.
So far, in the only interview that Corado has granted regarding the accusations and the suspension of funds, Corado, who was then still the director of Casa Ruby, insisted that she had not “stolen anything” and that the money she used had been approved by local government entities.
“I have never used money from Casa Ruby that has not been approved for work in the community. I have not done anything, I have not stolen money, everything that was used has been authorized,” Corado told Telemundo 44.
In addition, she said that this process is “retaliation,” provoked by a complaint she filed against the DHS director. In June of last year, the Washington Blade reported on an administrative complaint Corado filed, which accused a DHS official, whose name was redacted, of being “unprofessional, harassing, abusive, and discriminatory.”
In contrast, in a video that Ruby posted on her Facebook page on May 3 of this year, she insisted that she found a lawyer who will help her with the complaints published in Washington Blade. She also said that she has taken a sabbatical year. However, the photos on the social media of Casa Ruby, El Salvador Chapter, show that she has devoted herself to consolidating the organization in her country.
According to Konopka, it is up to the Office of U.S. Attorney General Merrick Garland to establish, based on evidence, when a case should be filed under criminal or penal law. Only then, when a person is wanted but flees from justice, is a person considered to be a fugitive.
“In civil cases, we don’t have formal indictments and I can’t speak about any criminal investigations or cases, because, in fact, that would already be the jurisdiction of the [U.S.] Attorney General’s Office,” Konopka said.
On July 22, Ruby Corado agreed to an interview with El Tiempo Latino. The meeting was supposed to happen online but she stopped responding after three days. We again requested her comments through several messages sent between July 25 and Aug. 8 to her personal profile page on Facebook and to another page under the name “Jada Wilkins,” one she also uses in her communications, but there was no response.
A story that gets darker
The irregularities do not end with the organization’s finances, because the complaints of former employees and former clients go much further. There are allegations of sexual harassment and the signing of nondisclosure agreements to prevent anything from being made public.
“Ruby forced many employees to sign confidentiality agreements. She never asked me to sign any, because there was no intent of harm on my part,” said Aiyi’nha Ford, a former employee. “I didn’t keep quiet for money; some of them did and they know it.”
According to Ford, as she spent time at Casa Ruby, she witnessed situations that could not be ignored.
“I started seeing things I couldn’t unsee. Sex work, drug solicitations, right in front of me. One of the employees had a knife at the front desk,” Ford said. She went on to allege that that a person very close to Ruby “was prostituting young girls who lived [at the organization’s shelter], and that’s when she forced them to sign confidentiality agreements. Others engaged in sex in exchange for a roof over their heads.”
Ford was coming out of a violent situation and was unemployed. When she arrived at Casa Ruby, Corado offered to help her and gave her a job. She later became a Program Director, earning $10 an hour. She sometimes received payments in cash, she said.
Tessa Jelani, who was a client living in one of the organization’s shelters, said she was retaliated against for complaining that the services and food quality were inadequate.
“I told Ruby, some of the staff, that if things didn’t change, DHS would know soon and the place would be shut down,” Jelani said. “But Ruby used to give money to employees and clients [in exchange for silence] and that’s why I was able to get money from her.”
Jelani added that, on repeated occasions, she heard Corado saying there were no resources to pay salaries or improve the conditions in the shelters, but “those were excuses; [Corado] drove new cars, she walked around with a new handbag,” she said.
“I was caught having sex with my boyfriend. Ruby sent someone to record a video of me while that was happening and then told me that if I talked, that video was going to be published,” Jelani said. “But that game didn’t work on me.”
The former employees interviewed during this investigation, the former client, and other sources cited and consulted for this report agree that the director of Casa Ruby, Ruby Corado, had a system by which she took advantage of the vulnerable situation of those who sought her support.
In the motion to freeze Corado’s access to Casa Ruby’s funds, the D.C. attorney general’s office stated that if it is proven that Casa Ruby’s money was moved to El Salvador, it would be “difficult” for those funds to be recovered.
On the morning of Aug. 11, the attorney general asked the D.C. Superior Court to appoint a receiver for Casa Ruby — a neutral third party to manage and resolve the financial situation. The entity approved for this matter was Wanda Alston Foundation.
While the hearing was held virtually, the attorney general’s office confirmed Ruby Corado was present at the hearing, joining from somewhere in Washington, D.C.
Three days earlier, the Court accepted the request of the attorney general’s office to appoint a trustee who will be in charge of analyzing and auditing the finances of the entity founded by Ruby Corado. The foundation, now the trustee of Casa Ruby, must periodically issue a report that will be delivered to the attorney general’s office and the court. The foundation must also determine if Casa Ruby could function with a completely renewed board of directors.
According to a source from the attorney general’s office, Corado rejected this proposal from the beginning, alleging that the Wanda Alston Foundation could not be a neutral party because they are a competitor with Casa Ruby. On Aug. 12, hours after the publication of this investigation, Corado contacted the news desk of El Tiempo Latino and said that once she finds a lawyer she will make the decision to grant an interview. In addition, she assured that she is fine.
Meanwhile, the employees who denounced the non-payment and the irregularities, say that they have been attacked on social media. They also received an email obtained by El Tiempo Latino in which a former administrator of Casa Ruby assures them that they will not receive the payments pending because they denounced the situation in the press.