small corporations

PROMOTING LATINO CIVIL RIGHTS SINCE 1968 35 th A N N I V E R S A R Y 2002-2003 Annual Report Table of Contents Mission Statement ................................................................................................................1 Message from the President and General Counsel .................................2 Message from the Chair ..................................................................................................3 LEGAL PROGRAMS .........................................................................................................4 Education ........................................................................................................................4 Employment.................................................................................................................6 Immigrants’ Rights.................................................................................................7 Political Access...........................................................................................................8 Public Resource Equity.......................................................................................9 Access to Justice .....................................................................................................10 COMMUNITY EDUCATION AND LEADERSHIP DEVELOPMENT ...........................................................11 Parent School Partnership (PSP) program ......................................11 Immigrant Higher Education Outreach program ....................12 “Folklorico Dancer” YOLANDA GONZALEZ Law School Scholarship Program........................................................................13 Contributing to MALDEF ..........................................................................................14 MALDEF Staff 2002-2003 ............................................................................................16 MALDEF Board of Directors ...................................................................................18 Financial Statements .......................................................................................................19 Acknowledgements ................................................................................inside cover In Memory of This 35th Anniversary Annual Report is dedicated to MALDEF Founder Pete Tijerina. When Pete Tijerina founded MALDEF in 1968, his overall goal was that of providing equal opportunities for Mexican Americans. His was a simple, pragmatic vision: “Nobody’s going to guarantee that you’re going to make every single member of the [Latino] community an affluent and educated person,” he once said. “All you can do is provide the opportunity or see that the opportunity is not denied. If you’ve done that, you’ve done something.” Pete Tijerina set in motion a quest that remains as relevant today as it did 35 years ago. We dedicate this annual report to his memory. Mission Statement MALDEF is a national non-profit organization whose mission is to protect and promote the civil rights of the more than 40 million Latinos living in the United States. Working to ensure that there are no obstacles preventing this diverse community from realizing its dreams, MALDEF labors to secure the rights of Latinos, primarily in the areas of employment, education, immigrants’ rights, political access, and public resource equity. MALDEF seeks to achieve these objectives and goals through advocacy, community education, leadership development and litigation. MALDEF’s goal is to foster sound public policy, laws, and programs that safeguard the rights and expand opportunities for Latinos to participate fully in our society and make positive contributions towards its well-being. MESSAGE FROM THE PRESIDENT AND GENERAL COUNSEL Antonia Hern´ ndez a MALDEF: 35 Years of Promoting a Fair Chance for All Latinos I f one were to capture MALDEF’s most important mission in two words, they would be “affirmative action.” President John F. Kennedy first popularized the term in 1961 to address the issue of discrimination in the workplace, and over the years, it has come to represent different things for different people. For MALDEF, however, it has always meant the same thing: providing Latinos a fair chance to participate in American society. In June 2003, in the most important higher education case heard in 25 years, Gratz v. Bollinger and Grutter, the U.S. Supreme Court upheld the use of race as a factor in admissions. MALDEF was highly involved in these critical cases, and we were heartened by the outcome. It reaffirmed the majority of Americans’ belief in the value of diversity and the role of affirmative action in opening the door to opportunities in American society. Since MALDEF’s founding in 1968, we have continued to focus on doing away with daily discrimination against Latinos. Over the past 35 years, we have made substantial gains in fair school financing and access to higher education, particularly in Texas and California; in the workplace, where Latino grocery store workers can thank MALDEF for the successful strategies we developed in the 1980s to open that industry to Latinos through systematic lawsuits; and for business owners, as we continue to work with entities like the U.S. Small Business Administration to assure that Latino entrepreneurs have access to capital, contracts and franchise opportunities. In one major victory this year, the U.S. Forest Service finally agreed to take substantial steps to increase Latino representation in one of its largest regions which covers the entire state of California. In MALDEF’s 35-year history, Latino demographics have changed dramatically: There are now 40 million Latinos in the United States, the largest minority group. Affirmative action has played a critical role in integrating a diversity of American society into the mainstream. But significant challenges remain. With that population growth has not come significantly increased political power, and in some communities we have experienced considerable backlash, i.e. in the Southeast, where the growth in Latinos has been extraordinary, inspiring the Ku Klux Klan to demonstrate against Latinos in North Carolina. Latinos continue to suffer from discrimination on a daily basis: Our children are more likely to attend overcrowded, substandard schools without textbooks, college counseling or college prep courses. Our workers are more likely to be abused and held back from promotion, and our citizens are still being deprived of their voice at the voting booth. However, as we enter the 50th anniversary of the landmark school desegregation case of Brown v. Board of Education, MALDEF is confident that we can continue to support, uphold and require programs and mechanisms for opening up opportunities to eradicating discrimination and to integrating the multitude of diverse peoples into this country. Antonia Hern´ ndez a PRESIDENT AND GENERAL COUNSEL 2| MALDEF 35TH ANNIVERSARY MESSAGE FROM THE CHAIR Joseph A. Stern The Judicial System’s Role in Providing Equal Opportunity Remains of Paramount Importance to Latinos A s a young attorney, MALDEF Founder Pete Tijerina was active in defending Latinos from racism and advocating for their rights. Then came the straw that broke the camel’s back, the impetus for founding MALDEF: his frustration with the judicial system – there was not a single Spanish-surname juror for a workplace injury case he was litigating. Now, 35 years later, the importance of representation and participation in all areas of life – especially reflected in the judicial system – remains paramount. As Latinos continue to be underrepresented in the political arena, the court system provides an even more critical check and balance for the community. Today, it would be difficult to imagine that in a city where Latinos are the majority, a jury pool would not include any Latinos. Yet, there remains a dearth of Latino attorneys and judges. One way that MALDEF has attacked that problem has been to promote affirmative action in higher education. We have fought to increase Latino access to institutions of higher learning and to advocate for and provide scholarships to make the cost of that education attainable for Latino students. MALDEF has successfully won in-state tuition fees for undocumented students and each year, we directly provide scholarship money to high achievers (see Pages 12 and 13). Another approach has been for MALDEF to remain active in promoting qualified Latinos to the judiciary. This year, we took positions for and against some of President Bush’s Circuit Court nominees (we ordinarily limit our focus to courts in which we frequently litigate, to nominees whom we believe are either insensitive or hostile to civil and constitutional rights, and to Latino nominees). We know that diversity in our nation’s judges is critical in the fair administration of justice. We have seen the difference that can make, as evidenced in the critical vote of the Supreme Court’s first female Justice, Sandra Day O’Connor, in the University of Michigan affirmative action case. We hope that someday soon a Latino justice will sit on our nation’s highest court. Pete Tijerina’s vision and founding of MALDEF has resulted in tremendous progress for Latinos over these past 35 years. We are grateful of the gains we as a society have made; yet mindful of what remains to be gained and what could be taken away from us if we are not vigilant. Joseph A. Stern CHAIR 2002-2003 ANNUAL REPORT |3 Legal Programs Education UPHOLDING AFFIRMATIVE ACTION Access to a high-quality college education continues to be a top priority, and MALDEF is a member of Americans for a Fair Chance, a consortium of civil rights organizations supporting affirmative action. We were deeply involved in the two University of Michigan cases, which were heard in April by the U.S. Supreme Court – the first time our nation’s highest court had visited the issue in 25 years. MALDEF represented student intervenors in the undergraduate case and wrote an amicus brief to the Supreme Court in the law school case on behalf of 29 Latino organizations. In addition, MALDEF staff conducted extensive outreach nationwide to key groups and to news media outlets. MALDEF was very pleased with the Supreme Court’s decision in June 2003 to uphold the use of race as a factor in higher education admissions. The court now recognizes the special role of educators in rooting out discrimination, and it allows MALDEF to Working to ensure a quality education so that all Latino children can live up to their true potential now focus on flawed university admissions programs that use criteria with little or no connection to merit or potential, such as legacy preferences, standardized test scores and other unfair measures. FAIR ACCESS TO FINANCIAL AID This year, partnering with FairTest, an advocacy group for fair and open testing, MALDEF filed a legal complaint against Florida’s Bright Futures program for providing public money for scholarships unfairly biased against minority students. The U.S. Department of Education’s Office for Civil Rights is investigating our charge that the scholarship program’s inflexible use of college admissions tests such as the SAT I and ACT discriminates against Latino and African American students. Although the program is supposed to reward any Florida high school graduate who merits recognition of high academic achievement, it requires a minimum cutoff score from standardized tests, regardless of the student’s high school record. A federal court has found that college admissions tests are not a valid measure of past achievement, and we are asking the state to give greater weight to real measures of high school achievement in the scholarship process. THE DREAM ACT MALDEF has continued to educate public policymakers while supporting proposed legislation such as the federal DREAM Act, which would make it easier for immigrant students to afford the cost of a college education. We continued efforts at the national level on pending legislation to give undocumented students the opportunity to legalize their status and continue their schooling. Washington, D.C. staff met with White House offices to request that the president support passage of the Student Adjustment Act (H.R. 1918) and DREAM Act (S. 1291). Although the House version stalled, MALDEF remains optimistic that the bills will remain alive for the next legislative session. EDUCATIONAL EQUITY IN THE K-12 SYSTEM It is unfortunate that state-led educational financing systems still often fail to deliver fair funding to Latino students. This has been especially true in Texas and California, where MALDEF has long fought for equitable distribution of tax funding for public schools. “Library” CRISTIAN GUERRERO HISTORICAL HIGHLIGHTS Undocumented Students 1982 - Plyler v. Doe - When a public school in Texas began charging tuition to undocumented children, MALDEF challenged the practice all the way to the U.S. Supreme Court, which ruled that those children have a right to a basic public school education. Educational Equity 1984- Edgewood v. Kirby - MALDEF began its challenge to Texas’ method of financing its public schools. Soon after the lawsuit was filed, the state legislature appropriated more than $1 billion to public education, thereby reducing the disparities among districts. 1992 - Rodriguez v. LA. Unified School District - Settling a 1986 lawsuit that noted an inequity between the dollars spent on minority and non-minority students, the court approved a consent decree requiring the LAUSD to move toward equal per-pupil expenditures on basic classroom resources, including teacher salaries. 4| MALDEF 35TH ANNIVERSARY LEGAL PROGRAMS Education MALDEF has spent more than two decades in Texas on a protracted battle for fair educational funding. This year, we won another round when the Texas Court of Appeals upheld a property tax cap in the state’s school finance law, in effect deterring wealthy districts from expanding an educational funding gap that hurts poorer school districts (Hopson v. Dallas). The decision upholds a funding mechanism championed by MALDEF that has been in place since 1993 and that provides more educational equity in the state. MALDEF continues to work to improve conditions in the states poorer school districts, which still face challenges: recruiting and retaining better teachers, improving conditions in school facilities, and having access to better curriculum. We are seeking solutions from Texas state elected officials. ONGOING BATTLE AGAINST SCHOOL OVERCROWDING Following years of hard-fought, successful litigation, education and advocacy, MALDEF is beginning to see some relief in sight for California’s schoolchildren, as the state’s voters approved Proposition 47, a $13.05 billion construction plan that will provide new schools in some of the most overcrowded areas. In addition, voters in Los Angeles approved a local measure for school construction and improvements. MALDEF not only endorsed both measures, but was represented on their steering committees, and our Parent School Partnership program held a parent community forum on school overcrowding. MALDEF continues to be involved in a lawsuit against California for a variety of unconstitutional conditions in schools throughout the state (Williams v. California) to curtail the harmful ways in which districts attempt to cope with severe overcrowding. We presented expert reports that found, among other things: Latino students are disproportionately impacted by multi-track, year-round school calendars that include three fewer instructional weeks; less opportunity to cover the entire curriculum; and limited access to college preparatory courses and intervention programs; students bused to school to relieve overcrowding likewise face clear disadvantages, such as lack of parental involvement, limited access to after-school enrichment or extracurricular activities; and students suffer from lower academic achievement. FAIR FUNDING FOR HIGHER EDUCATION The first professional school in South Texas will be built, thanks to the advocacy of MALDEF friend and supporter Irma Rangel, a Texas legislator who sadly passed away this year. Rep. Rangel was an early leader and major author of the South Texas Border Initiative (STBI) for higher education. In the late1980s, she was cocounsel with MALDEF in a lawsuit (LULAC v. Richards) to support public funding of higher education in the border region. In 1993, the STBI sent an additional $450 million to universities The late Texas Rep. Irma Rangel along the Texas border area from El Paso to San Antonio to Corpus to Brownsville. It also started new doctoral and research programs at border region state universities and built new buildings at several campuses. Rep. Rangel also passed a bill through the Texas legislature to build and finance the first professional school (a pharmacy) for South Texas. ACCESS TO THE CURRICULUM FOR ENGLISH LEARNERS MALDEF continues to monitor the rights of English-language learners to access curriculum. In many instances, the data supports that when done properly, bilingual instruction can be the best transition for the limited English proficient (LEP). In Texas, MALDEF advocated to keep bilingual education intact, and requested funding to prepare high school teachers to work with second language learners, especially with the new testing (TEKS) and graduation requirements for these students. More than 50% of secondary teachers are teaching LEP students with little or no training, meaning that our LEP students are being mainstreamed at the secondary level without any support. HISTORICAL HIGHLIGHTS 1992 - LULAC v. Richards - a state court ruled that the allocation of virtually no higher education programs or facilities in the predominantly Latino border area of South Texas violated the state constitution. Although the state Supreme Court reversed the decision, the legislature allocated hundreds of millions of dollars in new funding to improve course offerings and to expand campuses and facilities. Access to Curriculum 1984 - Keyes v. Denver School District #1 - This case made great strides toward improving Denver’s sensitivity to limited-English proficient students. MALDEF pressed for and received strong bilingual and multi-cultural programs and an affirmative action employment plan. 2002-2003 ANNUAL REPORT |5 LEGAL PROGRAMS Employment EMPLOYMENT PARITY IN GOVERNMENT Of all employers, one would expect that the government should be the most fair in representing all of its tax-paying citizens in the hiring process. Unfortunately, discrimination is alive and well in the realm of public employment. In California, it took Latino employees more than a decade to get relief, but with the efforts of MALDEF and co-counsel this year, the U.S. Forest Service has settled a massive class action lawsuit filed on behalf of Latino employees against the Pacific Southwest Region, one of the largest service units covering the entire state of California. The settlement enforces an earlier agreement to elevate its proportion of Latinos to more closely represent those in the labor pool (from 7 to 24 percent). The Forest Service has agreed to take substantial steps to increase Latino representation and to remove barriers to achieving a significant increase in that representation. CHALLENGING UNFAIR PROMOTIONS Jimmy Ramirez was a long-term employee at College of the Desert near Palm Springs, California. When the position of custodial supervisor became vacant, it was logical that he would apply for the position after having filled it on an interim basis. However, he was told that because he did not hold a high school diploma, an Anglo applicant from outside the college who lacked experience would be granted the position. Ramirez trained the new supervisor. In Ramirez v. Kroonen, we challenged the community college to promote our client to the position of custodial supervisor. The court agreed that the case should proceed to trial, and we began and continue court-ordered settlement discussions. SECURING SAFE AND FAIR WORKING CONDITIONS In a stunning blow to worker protections, the U.S. Supreme Court made a ruling in Hoffman Plastics stating that undocumented workers are not entitled to relief for back pay under the National Labor Relations Act. This ruling opened the door for abuse by unscrupulous employers, and MALDEF worked to undo its adverse effects. MALDEF staff from Addressing issues of fair and safe working conditions and eliminating discriminatory barriers to employment Washington, D.C. and San Antonio met with the EEOC and the Department of Labor to successfully persuade these agencies to limit the decision’s negative effects on the statutes they are charged with enforcing. In California, MALDEF successfully co-sponsored legislation to protect undocumented workers from employers that pay less than minimum wage, refuse to pay for overtime or otherwise fail to comply with other labor laws. In the Texas legislative session, we worked to amend various sections of the Labor Code to broaden the definition of the term “employee and complainant” so that an individual’s immigration status is not taken into account when seeking remedies for violations of these state laws. REQUIRING LAYOFF NOTIFICATION In Texas, to address the economic downturn, MALDEF collaborated with policymakers to craft a state law version of the WARN Act (Worker Adjustment and Retraining Notification Act), which requires employers of 59 or more persons working at a single facility to provide 60 days advance notice of covered plan mass layoffs. Also in Texas, we successfully mediated a case that presented a WARN Act challenge to a mass employee layoff without requisite notice by the Lucchese Boot Co. HISTORICAL HIGHLIGHTS MALDEF has fought to address not only entry-level employment, but also promotion and job-training opportunities. Access to Grocery Stores 1976 - Alaniz v. Tillie Lewis Foods - MALDEF charged that Latinos had been kept out of certain positions, could not move up the seniority list nor obtain the skills needed to progress in their jobs. The agreement was one of the most extensive employment victories won by a private organization and provided a seniority system that was more equitable to Latinos, while setting up funds to compensate victims of past discrimination and training program for minorities and women. 1986 - Ballasteros v. Lucky - As one of a series of challenges to grocery stores throughout the country, MALDEF’s settlement with Lucky established yearly and ultimate goals for hiring and promoting Hispanics in several hundred retail stores. In 1984 and 1985, MALDEF helped obtain a consent decree with California’s Vons supermarket chain (ensuring Hispanics would comprise at least 14 percent of Vons’ workforce), as well as with H.E. Butt Co. of San Antonio and Ralph’s Grocery Co. in California. Fair Hiring in Government/Utility Companies 1969 - Urquidez v. General Telephone - the New Mexico telephone company agreed to post equal employment notice and provide training for Latinos. 1987 - MALDEF reached a landmark consent decree in a challenge to the San Francisco Fire Department that set goals for recruiting and promoting minorities and women. 2002 - The U.S. Forest Service agreed to elevate its “workforce parity” in California to more closely approximate the 24% representation of Latinos in the labor pool. “Street Scene in Arizona” MANUEL ABRIL 6| MALDEF 35TH ANNIVERSARY LEGAL PROGRAMS Immigrants’ Rights THE NEW DEPARTMENT OF HOMELAND SECURITY During the formation of the Department of Homeland Security (DHS), MALDEF pushed for a strong immigration services component, a separate office to handle juvenile issues outside of the new agency, a retention of the immigration courts in the Department of Justice, a strong Office of Civil Rights in the new agency, and a designated Deputy Inspector General to handle civil rights complaints. As Congress dismantled the INS and divided it into two branches under the newly formed DHS, MALDEF immediately analyzed the move. In a report of all of the violations that could occur if protecting civil rights is not a priority in the development of the new agency, MALDEF examined issues such as racial profiling, human rights violations at the border, the use of state and local police to enforce federal immigration laws and our nation’s failed immigration policy. Our concern was that the DHS not look at all immigrants, including millions of legal ones, as suspected terrorists. SAFER COMMUNITIES THOUGH SEPARATION OF POWERS MALDEF has long supported the separation of powers between state/local law police and federal immigration officers. If local police are identified with immigration enforcement, public safety is undermined in the community, as victims and potential witnesses fear that any contact with the police could lead to deportation. MALDEF testified before the U.S. House Subcommittee on Immigration, Border Security, and Claims and the Congressional Black Caucus about the importance of this separation of powers. Also in Washington, D.C., in high-level meetings with White House and Justice Department personnel, MALDEF attempted to convince the Bush Administration to reverse their new interpretation of the law regarding the claimed “inherent authority” to enforce civil immigration laws. TEXAS IMPROPERLY SEIZES WORK PERMIT Juan Pozo Rodriguez had moved to Texas for work and went to the state’s Department of Public Safety (DPS) to apply for a driver’s license, having already held a valid one in California. When he went to inquire about receiving his license, an overzealous DPS worker seized his INS work permit and held it for nearly four months until a MALDEF attorney issued a demand letter. MALDEF has filed suit against the DPS, stating that it encouraged state bureaucrats to act as if they are federal immigration officers, which can lead to unfair profiling and civil rights violations. Pozo’s case illustrates the danger of state involvement in immigration matters. REMEDYING INS ABUSE In just one example of the offenses of the now-former INS, in Illinois, the Chicago District Office punished thousands of lowincome immigrants who were making a sincere effort to acquire legal permanent residency. MALDEF filed a lawsuit (Ramos v. Ashcroft) with co-counsel, stating the District Office of the INS violated it own rules by accepting premature applications from victims of fraud. The INS was well aware of a widespread problem of self-styled “immigration consultants” erroneously advising individuals to apply for legal permanent residence, many years before they would become eligible, under Section 245(i), a temporary federal law to promote family unification. Despite this knowledge, the district office adopted a practice of accepting these applications, retaining of thousands of dollars in special fees, and commencing removal proceedings against most of the applicants. Establishing the right of all immigrants to fair and equal treatment under the law PREVENTING HARASSMENT OF DAY LABORERS Throughout the country, individuals seeking work continue to be intimidated and harassed by police. In addition, poor treatment of day laborers has become an emerging issue in the Southeast and other areas of the country where the number of Latinos has increased dramatically. In Atlanta, MALDEF staff successfully intervened when the Home Depot planned to begin the forceful removal and arrest of day laborers that had been gathering in the parking lot. The matter ended without arrests, and a temporary space for the day laborers to gather was secured. In Chicago, after investigating reports that members of the Chicago Police Department were harassing and intimidating day laborers, MALDEF reached an agreement that the police would not enforce a city ordinance passed to regulate the activities of street vendors against day laborers and agreed to drop charges against two laborers. In California, we filed a lawsuit with the National Day Laborer Organizing Network on behalf of day laborers against the cities of Rancho Cucamonga and Upland, whose anti-solicitation ordinances prevent these workers from seeking work. THE RIGHT TO IDENTIFICATION MALDEF’s Washington, D.C. office worked extensively in cooperation with California offices, on the issues surrounding the acceptance and challenges to the Mexican matrícula consular (“Mexican consular ID”). We fought a proposal in Congress that would prohibit acceptance of any foreign ID, reaching out to potential new coalition partners, such as banks, local police, and the tourism industry. In Atlanta, MALDEF played an integral role in the decisionmaking process that made DeKalb County the first county in the Southeast to pass a resolution that recognizes the matrícula consular as an official form of identification. In California, we advocated and the state legislature adopted a resolution that urges cities and counties throughout the state to accept the identification card as an official form of identification. HISTORICAL HIGHLIGHTS INS Raids 1992 - International Molders v. Nelson - MALDEF successfully challenged the constitutionality of the INS practice of workplace raids without authority, ending the use of openended warrants in an effort to single out Latinos for possible violations and establishing standards of conduct and boundaries for workplace entry. Access to Benefits 1995 - Gregorio T. v. Wilson - This challenge halted the implementation of California’s Proposition 187, which would have barred immigrants from receiving education and other services. As part of the ruling, a U.S. judge found that public education cannot be denied based on immigration status and the schools cannot require proof of status for enrollment. 2002-2003 ANNUAL REPORT |7 LEGAL PROGRAMS Political Access ENSURING ACCESS TO REGISTRATION AND THE VOTING BOOTH MALDEF’s Washington, D.C. office played a lead role during the debate surrounding election reform. We met with congressional offices to influence the bill that ultimately passed as the Help America Vote Act (“HAVA”) and were successful in stripping out numerous problematic provisions in early drafts of the election reform bill. The bill that eventually passed contained a number of important protections for voting rights, but ultimately, did not gain MALDEF’s support because of the roll-backs to important gains achieved under the National Voter Registration Act and the Voting Rights Act. MALDEF secured widespread media attention to our role and position in the debate, and we pushed for full funding for the act to ensure that states and localities facing critical budget shortfalls will be able to implement improvements. PROTECTING LANGUAGE RIGHTS OF VOTERS Section 203 of the federal Voting Rights Act allows protections for those who are limited English proficient (LEP). In the nation’s capital, MALDEF played a key role in ensuring that the Census Bureau and the Department of Justice issued regulations expeditiously on new jurisdictions covered by the act’s language provisions in time to implement for the 2002 election cycle. We worked closely with the Justice Department to ensure training and compliance. Our regional offices met with the election officials in the newly covered jurisdictions, providing them with technical assistance, including a community outreach pamphlet MALDEF staff prepared, as well as other materials. In a California case, MALDEF was spurred by the actions of allegedly unscrupulous petition circulators who misled Latino voters. We filed a federal lawsuit against the Orange County Registrar in California on behalf of Spanish-speaking and other LEP citizens after petitions for a recall election targeting a local school board member were circulated only in English, in spite of the Voting Rights Act requirement that they also be provided in Spanish and Vietnamese due to the LEP citizen population in the county. The case (Padilla v. Lever) was dismissed by a lower court, and MALDEF appealed to the federal Ninth Circuit Court of Appeals. PROVIDING ACCESS FOR CANDIDATES In its third voting rights violation in recent years, the city of Seguin, Texas prevented Latino candidates from placing their names on the ballot to run for election under a new Latino majority district. The city enacted a new redistricting plan creating the district six days after closing the candidate filing period. In order to protect an Anglo incumbent, it refused to reopen that filing period. MALDEF filed suit (LULAC v. City of Seguin), blocking the election and successfully delayed the election until all candidates were offered the opportunity to file for a place on the ballot. As a result, the City of Seguin has elected its first Latino-majority council. BREAKING DOWN BARRIERS TO LATINO VOTING The city council of Aurora, which now has one of Illinois’ largest concentrations of Latinos outside of Chicago, intentionally discriminated against Latino voters by drawing a ward map that violated the “one person, one vote” principle and by fracturing the Latino community of interest. MALDEF convinced the City Council to withdraw the plan, but unfortunately, it passed a new Enhancing Latino influence in the political process by ensuring meaningful participation one that continued to fracture the Latino population to create safe wards for Anglo incumbents. Litigation is ongoing in that case, Gonzalez v. Aurora. CHALLENGING “AT-LARGE” ELECTIONS MALDEF is generally opposed to the use of “at-large” voting systems for choosing bodies of local officials, such as city councils, because Latinos are often prevented from electing any candidates of choice as a result of racially polarized voting. (Under the at-large system, all elected officials are chosen by the total voting population, regardless of geographical location.) When several California neighborhoods proposed to secede from the City of Los Angeles, MALDEF successfully encouraged the adoption of a district-based method of electing city council members in the proposed San Fernando Valley city. MALDEF opposed the at-large system for the proposed city of Hollywood because, although Latinos would have comprised about 40 percent of the population, it was likely that they might have been effectively prevented from electing any of the five council members in the new city. MALDEF sponsored the California State Voting Rights Act of 2001, which was signed into law and now makes it easier for Latinos to challenge at-large voting systems. ELIMINATING ANTIQUATED VOTING SYSTEMS In del Valle v. Illinois State Board of Elections, MALDEF has challenged the use of punch-card balloting systems in Illinois and the lack of Spanish-language assistance within Cook County. After more than 17 court-mediated settlement discussions, we are in the process of finalizing the settlement documents with all of the defendants. HISTORICAL HIGHLIGHTS Voting Rights Act 1975 - The Voting Rights Acts of 1965 renewal - addressing the concerns of Latino disenfranchisement and past voting rights abuses, MALDEF successfully convinced Congress to include Latinos into the act and add jurisdictions in Texas, Arizona and parts of Colorado and California to special scrutiny by the U.S. Department of Justice. 1982 - MALDEF helped create a new section that makes election practices that are discriminatory in effect, illegal and which included a bilingual provision to protect limited-English proficient voters. Fair Political Boundaries 1990 - Garza v. County of Los Angeles - after proving that the Board of Supervisors had a long history of deliberately fragmenting the Latino community, MALDEF won the first Latino seat, resulting in the first Latino elected to the board in more than 100 years. 1995 - King v. Illinois State Board of Elections - The court found that creating Illinois’ first new Latino Congressional district was an appropriate remedial measure for past electoral discrimination in the Chicago area, maintaining the first Latino-majority congressional district in the Midwest. 8| MALDEF 35TH ANNIVERSARY LEGAL PROGRAMS Public Resource Equity BUDGET CUTS DURING TOUGH ECONOMIC TIMES With the downfall of the national economy, many states faced revenue reductions and budget cuts, and MALDEF monitored proposed funding reductions to ensure that vital services affecting Latinos were not disproportionately cut. In California, when the budget shortfall was estimated at upward of $35 billion, Gov. Gray Davis proposed slashing K-14 education by nearly $7 billion and health and human services by more than $2 billion in ways that would unfairly impact Latinos. MALDEF successfully beat back cuts in critical funding for this vulnerable population. We fought to save the Healthy Start program and drastic reductions to the Medi-Cal program, which helps many “working poor” in the Latino community access necessary health care services. ACCESS TO MEDICAL INSURANCE Lack of medical insurance continues to be a pressing issue for Latinos nationally. Our Sacramento office convened a Latino coalition to research a variety of approaches to increase coverage for low-wage working Latinos and their families, and several bills were introduced in the legislature, including some “Spice Market” legislation that would CRISTIAN GUERRERO provide universal coverage, while other legislation would require employers to either provide coverage for employees or pay into a fund for that purpose. In addition to protecting workers, MALDEF has focused on children. We released a seminal report on the status of Latino children under age five, and provided policy recommendations for efforts to protect this important population. In California, we worked to ensure that Latino children receive their fair share of the state’s tobacco tax money that was earmarked for early childhood programs. In addition, in Los Angeles County, we participated in a coalition to address the closures of health care clinics and hospitals, including supporting legislative measures that would generate income for the county health care system and organizing town hall meetings and other events to educate the community. In Texas, MALDEF successfully worked with hospital districts in the major urban areas to defend their policies of allowing access to indigent health care programs regardless of immigration status, in spite of a contrary opinion by the Texas Attorney General. MALDEF worked closely with legislators, attorneys, and administrators for the major hospital districts on legislation to authorize local public health entities to use funds for preventive health services and indigent health care programs to serve local residents regardless of immigration status. Ensuring the Latino community a fair share and equal access to public services ELIMINATING LANGUAGE BARRIERS TO PUBLIC SERVICES State and federal laws protect the rights of the Limited English Proficient to receive meaningful services. MALDEF provided “traveling trainings” for legal services and a “Language Access and Policies” manual. The prospects of ensuring better oversight and accountability of state agencies was made more difficult because of budgetary crises, so we turned our focus on private health care providers to co-sponsor legislation to ensure all health maintenance organizations (HMOs) develop standards to provide culturally and linguistically appropriate services. In California, those that contract with the state are required to provide language assistance services. MALDEF is also working with several language rights advocates to provide recommendations on legislation that would ban the use of children as interpreters, a measure that raises a number of challenges in implementation and enforcement. FAIR AND EQUITABLE TREATMENT IN LAND USE DECISIONS MALDEF had two major policy victories in California land use, helping establish our reputation as the premier Latino civil rights organization working to resolve public service and facility deficiencies in existing communities through better land use planning. Our Sacramento staff worked on legislation enacted into law that sets state land use priorities to promote infill and equity, protect natural resources and farmland and promote efficient development patterns. MALDEF has been appointed to the Governor’s advisory committee that is using these priorities to update the state’s Environmental Policies and Goals Report. In addition, we worked on legislation enacted into law that would promote infill development, affordable housing, and farmworker housing by exempting certain projects from the requirement to perform a full environmental impact report. MALDEF developed legislation to facilitate school modernization and construction in existing communities. MALDEF staff participated as experts in the state legislature’s Smart Growth Caucus Retreat, the California Center for Research on Women and Families Policy Summit 2003, and the Local Government Commission’s seminar on “Creating Vibrant Neighborhoods for Our Growing Latino Population.” HISTORICAL HIGHLIGHTS Disproportionate Impact 1971 - La Raza Unida v. Volpe - MALDEF stopped the building of a freeway in Alameda County, California that would have displaced more than 5,000 low-income Latinos and destroyed three public parks. Fair Use of Tax Dollars 2001 - Rocha v. City of Poth - In one of the latest of many cases where MALDEF has fought to protect the rights of Latinos to adequate and fair public resource distribution, we won the case against the City of Poth, a small South Texas town. It finally agreed to pave the streets in its Latino neighborhoods, giving them fair use of their tax money. 2002-2003 ANNUAL REPORT |9 LEGAL PROGRAMS Access to Justice REVIEWING NOMINEES FOR THE BENCH From time to time, MALDEF evaluates certain judicial nominations for courts in which we frequently litigate and to Latino nominees. This was a busy year for evaluating nominations by President Bush, and MALDEF was pleased with the outcome of two judicial candidacies we took positions on, and we await the results of four others. MALDEF supported Edward Prado to the Fifth Circuit Court of Appeals, to which he was confirmed. We found that Prado had an established record indicating he was someone who would be fair and protect civil rights, and we supported him even though he ruled against MALDEF in a major school testing case in Texas. On the other hand, MALDEF opposed D.C. Court of Appeals nominee Miguel Estrada, whose nomination was halted. Having never actually served on the bench, his sparse record indicated he would take some very troubling positions on key areas of the Constitution and civil rights affecting Latinos. MALDEF supports the pending nomination of San Francisco Superior Court Judge Carlos Bea to the Ninth Circuit Court of Appeals, as his extensive record points to respect for the rights of litigants. However, we were very disappointed when President Bush re-nominated two candidates previously rejected by Senate Judiciary Committee, Charles Pickering and Priscilla Owen. Working to ensure that Latinos receive fair treatment in the judicial system Pickering is a federal judge with past ties to supporting Mississippi’s segregationist way of life whose past decisions would paint a grim picture for plaintiffs in employment Immigrants’ rights rally in Michigan discrimination cases and voting rights cases, and Owen, a Texas Supreme Court justice, has been hostile to workers and women’s rights. MALDEF also opposes Alabama Attorney General William Pryor to the Eleventh Circuit Court of Appeals, where the Latino community is burgeoning, as his record shows an unwillingness to protect Latinos’ access to basic rights like education, voting and employment and our civil rights and civil liberties. FIGHTING TERRORISM WITHOUT RACIAL PROFILING Throughout the country, MALDEF continues to target the problem of law enforcement unfairly singling out Latinos and others through “racial profiling.” MALDEF’s Washington D.C. office participated with a group of organizations working on a bill to end the practice, legislation which had been re-crafted in the aftermath of the September 11 tragedy. MALDEF has worked closely with other civil rights groups to explore methods of ending the practice while responding to credible concerns about fighting terrorism. In Texas, we joined a coalition including law enforcement agencies to fine-tune the reporting of data about traffic stops, arrests and searches by local police departments. Of particular concern is the continued practice of officers that result in a disproportionately high percentage of Latino and African Americans who make up the majority of people stopped, searched and arrested. As a partner in the Georgia Multicultural Partnerships Network, the Atlanta office served as an expert to a coalition of 40 African American and Latino leaders. HISTORICAL HIGHLIGHT MALDEF’s First Legal Victory Among MALDEF’s first lawsuits in Colorado, Texas and California, we addressed the issue of Latinos’ right to protest. Our first legal victory was in 1968 - In Edcouch Elsa High School in Hidalgo County, Texas - 192 students were expelled when they boycotted classes after the school board refused to listen to their demands in addressing educational abuses. A judge agreed that the expulsion unconstitutionally violated the students’ rights to protest. “Voces Unidas” IRENE CARRANZA 10 | MALDEF 35TH ANNIVERSARY Community Education & Leadership Development Parent School Partnership (PSP) Program For nearly two years, children at Gratts Elementary School in downtown Los Angeles looked longingly through the window of an idle computer lab: All of the equipment was in place, but school district bureaucrats had failed to allow electrical connections for the project. The principal was frustrated, having worked hard to get the lab up and running. This year, however, students now have access to the computer lab, thanks to the efforts of MALDEF’s Parent School Partnership (PSP) program. Training parents, school personnel and community based organizations to lead in the educational attainment of children POSITIVE ENGAGEMENT It is a common misconception that Latino parents – particularly immigrants – are not interested in their children’s education. Nothing could be further from the truth. MALDEF’s PSP program has encouraged them to work with the system, producing very enthusiastic parent graduates with the support – and to the delight – of school administrators and teachers. MALDEF’s PSP has opened doors for Latinos to engage school administrators and officials in positive interaction throughout the nation. For example, in Los Angeles, our PSP parents have been involved in advocating for a sorely needed high school, the Belmont Learning Center, which may finally get built after the community has patiently waited more than two decades for its completion to alleviate severe overcrowding. In the nearby Whittier School District, the PSP parent group established a district-wide parent center to provide parents from 13 schools an opportunity to participate in trainings, workshops and generally become more involved. At one Houston graduation ceremony for 74 parents, the Houston Community College Chancellor for Economic Development Jos´ Villareal was so impressed by the parents’ e commitment, he wrote the PSP program into his budget. The PSP program was also nominated for the Houston’s Hispanic Chamber’s Triunfando Award, which recognizes the Educator of the Year. Our new PSP office in Atlanta, serving the burgeoning population of Latinos in the region, continued to recruit new organizations and parents to the program, while participating in groups with the goal of identifying issues that affect the Latino community and building campaigns and traveling PSP workshops. PROGRAM IS AVAILABLE NATIONWIDE This year, MALDEF consolidated the PSP offices, which now operate in Atlanta, Houston and Los Angeles. We continued to extend the reach of our 16-week curriculum by expanding our “training of trainers” sites, bringing the model to locations throughout California, Nevada, Nebraska, Texas, New Mexico and Wisconsin, and worked to bring it to the Southeast. Among those served were locations in dire need of school reform to address poor academic performance. In June, MALDEF launched a website (www.maldef.org/psp) as a nationwide resource for parents and schools and a means for them to share school improvement projects and other information with each other. Gratts Elementary School’s new technology laboratory In partnership with schools and community groups, MALDEF’s PSP informs parents of their rights and responsibilities, how to navigate the school system and how to take the lead in affecting change. One of the graduation requirements is that the parents launch a project to improve their children’s schools. At Gratts Elementary, the PSP parents decided it was time to hook up the computer lab. One of the lessons they learned in the program was that elected officials were to be held accountable to the public; thus they contacted LAUSD Board Member José Huizar, who made the arrangements necessary to get their lab operational. It is now used for students, parents and teachers as a comprehensive learning and resource tool and as a vehicle for greater communication among the members of the community through a parent/community newsletter and expanded school website. PHOTO: GEORGE RODRIGUEZ 2002-2003 ANNUAL REPORT | 11 C O M M U N I T Y E D U C AT I O N & L E A D E R S H I P D E V E L O P M E N T Immigrant Higher Education Outreach Program PROMOTING COLLEGE ACCESS MALDEF’s past outreach to elected officials in states like California and Texas has resulted in laws that allow more qualified students to attend public institutions of higher learning, by exempting undocumented ones from the high out-of-state fees usually charged to non-residents at its institutions of higher education. This year, we continued to publicize those programs to college counselors through our Immigrant Higher Education Outreach Program, launching an extensive public service announcement (PSA) campaign. Along with La Agencia de Orci & Asociados, a leading U.S. Hispanic advertising agency, MALDEF launched a bilingual (English and Spanish) campaign, “Go for it/Ya puedes” with PSAs for television, radio and billboard/posters. In addition, we launched a web page featuring an extensive scholarship list. Making higher education affordable to qualified undocumented students “If your mind is hungry, now you can feed it!” states a PSA campaign to encourage students to attend college NEW SCHOLARSHIP FUND FOR UNDOCUMENTED STUDENTS Fabiola Martin always planned on going to college: She had been a bright college prep student in high school and was accepted to the University of Southern California. One week before the beginning of the school year, she had enrolled in classes and packed her bags when she received a letter in the mail: Because she was undocumented, the school was rescinding her financial aid packet. Devastated, Martin was able to enroll in a local community college with the help of $2,500 grant from her high school, and after attaining legal status, she is now a student at Loyola Marymount Law School and a MALDEF intern. Although undocumented students in some states are eligible for in-state resident tuition, they still cannot receive federal or state assistance, and even private scholarship funds helping Latino students require legal status. MALDEF saw the critical funding gap that no one was filling. PHOTOS BY: GEORGE RODRIGUEZ Federico Jimenez Fabiola Martin This year, through a generous $50,000 annual commitment from MALDEF Board Member Federico Jimenez, MALDEF was able to launch the Ellen and Federico Jimenez Scholarship Fund. This money will allow grants that will make a critical difference in the lives of students who would otherwise be unable to afford the cost of a higher education. 12 | MALDEF 35TH ANNIVERSARY Scholarships Scholarship Committee Sean A. Andrade, Esq. Baker & Hostetler Elizabeth A. Camacho, Esq. Irell & Manella Bonnie Chavez, Esq. Univision Music Group Donovan J. Cocas, Esq. Greines Martin et al LLP Daniel Garcia, Esq. Richards, Watson & Gershon Prof. Laura Gomez UCLA Law School Glenda Martinez, Esq. Univision Television Group Carlos Matos, Esq. Dewey Ballantine LLP Edith Ramirez, Esq. Quinn Emanuel Urquhart Oliver & Hedges, LLP Rey Rodriguez, Esq. Buena Vista International Inc. Irma Rodriguez Moisa, Esq. Liebert Cassidy Whitmore Thomas A. Saenz - ex officio Vice President of Litigation, MALDEF Bernardo Silva, Esq. Sony Music Entertainment Diana Torres, Esq. O’Melveny & Myers, LLP Rodrigo Vazquez, Esq. Latham & Watkins Benjamin A. Vega, Esq. Ascent Media Group Victor Viramontes - ex officio Staff Attorney, Higher Education, MALDEF O ur scholarship program to support law students with a demonstrated commitment to serving the Latino community continues to be an important part of MALDEF’s mission. Our scholarship committee is comprised of Latino attorneys in private practice at the early to mid-career level. Committee members not only participated in making the selections of scholarship recipients but have begun planning fundraising efforts for the MALDEF scholarship program for the next fiscal year. As in the past, MALDEF had a large number of scholarship applicants from law schools across the country. Scholarships were awarded based on three primary factors: • demonstrated involvement with and commitment to serve the Latino community • academic achievement indicating the potential for successful completion of law school • financial need 2002 MALDEF LAW SCHOOL SCHOLARSHIP RECIPIENTS Valerie Kantor Memorial Scholarship Recipient Outstanding Overall Applicant $7,000.00 TEODORO B. BOSQUEZ IV Harvard Law School 1st Year Vilma Martinez / Helena Rubenstein Scholarship Outstanding Female Applicant $6,000.00 FRANCHESCA CHRISTINA HERRERA Boalt Hall Law School 1st Year William Randolph Hearst Endowment Scholarship Best Essay $6,000.00 ENRIQUE ARMIJO University of North Carolina, Chapel Hill School of Law 1st Year MALDEF Law School Scholarship $3,000.00 SHIREEN KARIMI Harvard Law School 1st Year FELICIA MARIA MEDINA Yale Law School 1st Year OSCAR AMOR PARDO UCLA School of Law 1st Year NORA PRECIADO Boalt Hall Law School 1st Year VERONICA RAMIREZ UC Davis School of Law 2nd Year FRANCES ELIZABETH VALDEZ University of Texas School of Law 1st Year RAY ANTHONY YBARRA Stanford Law School 1st Year 2002-2003 ANNUAL REPORT | 13 Contributing to MALDEF Sharing our Vision Our vision is of an America where being Latino is no longer an obstacle to full participation in society. We imagine an America where all people, including Latinos, enjoy the same rights and protections under the law; where Latino voices are fully heard and represented in the political process; where all people work together to maintain high levels of justice and fairness throughout the American system. Thank you to all of you who have supported MALDEF throughout this year. OUR CORPORATE AND FOUNDATION PARTNERS PLATINUM PARTNERS: $100,000+ Anheuser-Busch Companies The Ford Foundation The James Irvine Foundation The Rockefeller Foundation The Sandler Family Supporting Foundation Soros Foundation Washington Mutual Fried, Frank Harris, Shriver & Jacobson The Gas Company, A Sempra Energy Company General Motors Corporation Health Care Service Corporation Intercultural Development Research Kilpatrick Stockton LLP Law Offices of Enrique Moreno Linebarger, Goggan, Blair, Pena & Sampson, LLP Mayer Brown Rowe & Maw McDonald’s Corp. Motorola, Inc NBC4 / Telemundo 52 Prudential Financial Shell Oil Company Southern California Edison Southwest Airlines Texas Equal Access to Justice Foundation Toyota Motor Sales USA, Inc. TXU Corporation Tyson Foods, Inc Univision Television Group, Inc. Verizon Communications, Inc. Walt Disney Company Wells Fargo & Company Winston & Strawn Zubi Advertising Services, Inc. BRONZE PARTNERS: $1,000 – $9,999 AARP Abbott Laboratories Fund The Abernathy/McGregor Group ABN AMRO Services Company ACS State and Local Solutions AFL-CIO The Ahmanson Foundation AIG Invesment LLC American Federation of Teachers Amigas de MALDEF AOL Time Warner, Inc. Arnold & Porter Automobile Club of Southern California Azteca Foods Baker & Hostetler, LLP Baker & McKenzie Barnes & Thornburg Bechtel Infrastructure Corp. Blockbuster Inc. The Boeing Company California Commerce Bank California Healthcare Foundation California Hospital Medical Center California State University Foundation California Teachers Association Callejo & Callejo Law Firm CBS WBBM-TV CBS2 / KCAL9 Chicago Community Trust Citigroup Business Services Coastal Securities LP ConocoPhillips, Inc. Countrywide Home Loans, Inc. GOLD PARTNERS: $50,000 – $99,999 America’s Charities California Community Foundation Center for Law in the Public Interest The Gerber Foundation Houston Endowment Inc. Jeht Foundation John S. and James L. Knight Foundation Kaiser Permanente Levi Strauss Foundation Marguerite Casey Foundation The Rosenberg Foundation The State Bar of California SILVER PARTNERS: $10,000 – $49,000 Arthur M. Blank Foundation AT&T Bank of America BELO Corporation BP Bracewell & Patterson, L.L.P The Bravo Foundation The California Endowment The Coca-Cola Company The David & Katherine Moore Family Foundation David & Lucile Packard Foundation Exelon Corporation Fannie Mae Foundation Ford Motor Company Cox, Castle & Nicholson, LLP Cummins Engine Foundation DaimlerChrysler Corp. Fund Delgado, Acosta, Braden & Jones, P.C. Deloitte & Touche Deutsche Bank Diageo North America, Inc. Dreamworks SKG Edison International Corp. Fannie Mae The Fluor Foundation Francis Beidler Foundation Freeborn & Peters Gardner Carton & Douglas, LLC Gloria Molina For Supervisor Goldberg, Kohn et al. Goldman Sachs & Company Goldstein, Demchak, Baller, Borgen & Dardarian H.E.Butt Grocery Company The Hearst Service Center Hilgers & Watkins, P.C. Holland & Knight Houston Community College System Southeast College Irell & Manella, LLP J.P. Morgan Chase Jenner & Block LLC Katten Muchin Zavis Foundation, Inc. KB Home KTLA 5 KTTV Fox 11 L.A. Dept. of Water and Power La Agencia De Orci y Asociados Latham & Watkins Law Offices of Francisco G. Medina Law Offices of Frank Herrera, Jr. Law Offices of Nicholas R. Allis Liebert Cassidy Whitmore Linebarger Goggan et al. Lockheed Martin Corporation Lord, Bissell & Brooks Los Angeles Times Macias & Associates Markle Foundation Matt Construction Corporation Matt Garcia Foundation McDonald’s Hispanic Operators Association Mehri & Skalet, LLC Miner, Barnhill & Galland, P.C. Munger, Tolles & Olson Naegelin Investment Company Nissan North America, Inc. Northern Trust Giving Program Occidental Petroleum Corp. O’Melveny & Myers, LLP Our Lady of the Lake University Paul Hastings Pepsi Cola Bottling Company Performing Arts Foundation Perry & Haas, L.L.P. Philip Morris Companies, Inc. 14 | MALDEF 35TH ANNIVERSARY CONTRIBUTING Piper, Marbury, Rudnick & Wolfe PipeVine, Inc. Ramirez & Co. Inc. Ramona’s Food Products, Inc. Rangel Cosulting Reliant Energy Relman & Associates Rose & Kindel San Antonio Express News San Francisco Foundation Schieffelin & Somerset Schiff Hardin & Waite SEIU Local 660 Seyfarth Shaw Attorneys Shapleig For Senate Campaign Shared Services Group Sidley, Austin, Brown & Wood LLP Siegman Consulting Social & Health Research Center Soza & Company LTD. St. Mary’s University School of Law State Farm Insurance Strasburger & Price LLP Strumwasser & Woocher, LLP TACHE Taco Bell Corp. (YUM! Brands, Inc.) Texas A & M University Health Science Center Texas A&M University at Kingsville Texas A&M University Foundation Texas Association of Higher Education Trinity University UFCW Local 881 Union Bank of California United Way of Lake Area United Way of the Bay Area University of California Los Angeles University of Chicago University of Houston University of Notre Dame University of Southern California USAA Foundation Walgreens Company Wal-Mart Foundation Norma Cantu Antonia Castaneda & Arturo Madrid Arturo Jauregui Deborah C. Kastrin Helen L. Luna TO MALDEF $250+ Maria A. Berriozabal Elena A. Alvarez Samuel Briones Alex Chaves Ann Cohen Gordon Conway R. Jason Dcruz Marisa J. Demeo Ned Dickey, Jr. Nancy Falk Mark Fassold Rose M. Fuenzalida Paul D. Gewitz Barry Goldstein Michael J. Hirschhorn Paul Kleppner Roger L. Kohn Mark Lopez Ray & Sylvia Lucero Gary & Kimberly Lutz Samuel M. Matchett John McCartney Samuel Mendenhall David Mendez Manuel O. Mendez Olivia F. Mercado Susana M. Navarro Frank B. Olguin Donald L. Pierce Bonnie Podolsky Francisco R. Razo Richard J. Rice Manuel Sanchez A.D. & Elenor Sellstrom Stuart K. Taussig Michael Thompson Roland Anthony Ulloa Renato & Jeanne Velasquez James & Lisa Viveros Anna M. & Timothy J. Voortman Barbara B. Walker $1,000+ Margarita J. Alcala Barbara Aldave Edward J. Avila Jaime Davila David-Damian Figueroa Telemachus P. Kasulis Romulo & Roseanne Lopez Enrique Moreno Augustina A. Reyes & Michael A. Olivas Ken Rosh Margaret P. Saenz Guadalupe Salinas Katherine Sugg Diana M. Torres Ann Marie Wheelock $500+ Xavier Becerra Steven W. Brown David & Marta Cerda Henry G. Cisneros Hector J. & Margaret M. Cuellar John & Veronica Feehan Albert Gurulé Donald Hubert Robert & Eleanor Juceam Stephen Levy Raymond Lightstone Francisco & Margarita Medina Bernard M. Murphy Gilbert Tauck Nancy & Steven Ttee John G. Wymer, III Jaime E. Yordan Ronnie C. Zepeda OUR INDIVIDUAL DONORS: $50,000+ Antonia Hernández & Hon. Michael L. Stern LUIS NOGALES PLEDGES $1 MILLION This year, Luis Nogales, one of the nation’s most prominent corporate leaders and Latino investors, pledged $1 million for the protection of immigrant rights in a bequest to MALDEF. “Millions of Latino immigrants are making valuable contributions to our economy and society, but they live and work unprotected by our laws and marginalized in participating in the life of our nation,” said Mr. Nogales. “We’re a nation of immigrants but it’s always taken great uphill effort to secure the rights of new immigrants. This donation demonstrates my faith in the capacity of our institutions to give new Americans the full measure of their human and civil rights and the opportunity to pursue the American Dream.” MALDEF is deeply grateful to Mr. Nogales for the largest gift by an individual in our history. $25,000+ Federico Jimenez $10,000+ Nicholas R. Allis David & Katherine Moore Joseph A. Stern $5,000+ Tom Reston Hector Cuellar Frank Quevedo Monica Lozano $2,500+ Arthur Acevedo Morris J. Baller & Christine Brigagliano 2002-2003 ANNUAL REPORT | 15 MALDEF Staff 2003 - 2003 NATIONAL OFFICE LOS ANGELES President's Office Antonia Hernández President and General Counsel Marysol Benitez Executive Secretary Paul J. Vizcaino Administrative Assistant Community Education and Leadership Program Parent School Partnership (PSP) Program John Hurtado National PSP Director Manuel Huerta Belmont PSP Director Frank Molina National PSP Trainer Norma A. Vega PSP Trainer Araceli Simeon-Luna Los Angeles PSP Director Mario A. Ruiz Clerk *Erika Martinez Los Angeles PSP Director *Claudia I. Monterrosa National PSP Director *Kristin J. Sekora Director of Foundations and Grants *Angelo Reyes Development Secretary Finance and Administration Robert Hettinger V.P. of Finance and Administration Legal Programs Vibiana Andrade Vice President, Public Policy and Communications Thomas A. Saenz Vice President, Litigation Sylvia M. Jones Office Manager/MIS Coordinator May Chung Staff Accountant/Accounts Payable Leticia R. Urquidi Staff Accountant/General Ledger Jimmy Gallardo Human Resource Clerk Cleotilde Rodriguez Receptionist *RaChelle Williams Human Resource Manager *Armando Martinez Human Resource Clerk Immigrant Higher Education Outreach Shaheena Ahmad Simons Staff Attorney and Fried, Frank Fellow Jimena S. Vasquez Statewide Children Policy Analyst and Outreach Director Victor Viramontes Staff Attorney, Litigation Project for Higher Education Agustin Corral Paralegal, Litigation Project for Higher Education Ramona I. Corral Legal Secretary Steven Ochoa National Demographic Researcher Maria Lucero Ortiz California Immigrant Higher Education Outreach Director *Abigail Ramirez California Immigrant Higher Education Outreach Director MALDEF Building Property Management Carlito C. Manasan Building Engineer Development Rafael Ramirez V. P. of Development *Albuquerque PSP Program *Nieves G. Torres PSP Director *Nancy Sheppard Program Office Secretary Javier Angulo Associate Director of Development Lisa M. Ramos Associate Director of Special Events Adrienne Costello Associate Director of Individual Giving Judy Orrante Development Secretary Fermin Rodriguez Development Secretary Atlanta Tisha Tallman Regional Counsel Communications J.C. Flores National Director of Communications Jose Gonzalez Staff Attorney Diana S. Connerty Staff Attorney and Fried, Frank Fellow 16 | MALDEF 35TH ANNIVERSARY M A L D E F S TA F F 2 0 0 2 - 2 0 0 3 Gerardo E. Gonzalez Public Policy Analyst Josefina Prieto Legal Secretary Blanca Rojas PSP Director Isabel Sance-Valverde Program Office Secretary Cynthia Rangel Paralegal Lucy Silva Sr. Legal Secretary Maria Cabadas Legal Secretary Leticia M. Saucedo Staff Attorney Selena Solis Staff Attorney Joe Sanchez Sr. Policy Analyst Yolanda Reyes Paralegal Isabel Lopez Piña Sr. Legal Secretary Carmen M. Leija Legal Secretary Linda P. Tavares Litigation Clerk *Ernestine G. Morales PSP Director *Phoenix Leadership Development Program *Rudolfo H. Perez, Jr. Director *Maria Elena Durazo Program Office Secretary Chicago Regional Office Patricia Mendoza Regional Counsel Maria G. Valdez Senior Litigator Alonzo Rivas Staff Attorney Ana Collazo Paralegal Carmen R. Acevedo Senior Legal Secretary Irene Padilla Receptionist *Wamaid Mestey-Borges Legistative Staff Attorney Sacramento Public Policy Office Maria Blanco National Senior Counsel Rita Durgin Legislative Secretary Francisco Estrada Sr. Public Policy Analyst Sarah O. Mercer Public Policy Analyst Washington D.C. Public Policy Office Marisa Demeo Regional Counsel Katherine M. Culliton Staff Attorney James Ferg-Cadima Legislative Analyst Marie Watteau Public Affairs/Policy Analyst Nelly B. Valdes Administrative Assistant San Antonio Regional Office Nina Perales Regional Counsel Houston PSP Program Patricia I. Cabrera PSP Director Mary Alice Escobedo Program Office Secretary Los Angeles Regional Office Hector O. Villagra Regional Counsel Joseph P. Berra Staff Attorney *Aisha Qaasim Legistative Staff Attorney Belinda Escobosa Helzer Staff Attorney Steve J. Reyes Staff Attorney Maureen Guadalupe Tellez Staff Attorney *Employee departed during the fiscal year or program discontinued Photos by George Rodriguez 2002-2003 ANNUAL REPORT | 17 MALDEF BOARD Barbara Aldave Stewart Professor of Law University of Oregon Eugene, OR Edward J. Avila President Project Restore Los Angeles, CA OF DIRECTORS Federico Jimenez Owner FEDERICO Venice, CA Arnold J. Kleiner President and General Manager KABC Television Glendale, CA Teresa Leger de Fernandez Partner Nordhaus, Haltom, Taylor, Taradash & Bladh Santa Fe, NM Manuel Martinez Partner Holme Roberts & Owen, LLP Denver, CO Hon. Gloria Molina Los Angeles County Board of Supervisors Los Angeles, CA Carlos X. Montoya President and CEO Aztec America Chicago, IL Michael A. Olivas Associate Dean University of Houston Law Center Houston, TX Don Pierce Independent Consultant Henderson, NV Guadalupe Rangel Education Consultant Corpus Cristi, TX Thomas B. Reston Attorney at Law Washington, D.C. Matt Rezvani Director of Local Government Affairs BP Corp. Los Angeles, CA José R. Rodr´ guez í County Attorney El Paso County, TX Maria Salda˜ a ñ Senior Vice President Ramirez & Co., Inc. Chicago, IL Andrew Segovia Associate General Counsel, Latin America General Motors Corp. Detroit, MI Maritza Soto Keen Executive Director Latin American Association Atlanta, GA Joseph A. Stern Partner Fried, Frank, Harris, Shriver & Jacobson New York, NY Peter Villegas First Vice President, Regional Manager Washington Mutual Los Angeles, CA Ann Marie Wheelock Senior Vice President Fannie Mae Western Region Pasadena, CA Sam Zamarripa Candidate Georgia State House of Representatives Atlanta, GA Zoë Baird President The John and Mary R. Markle Foundation New York, NY Morris J. Baller Partner Goldstein, Demchak, Baller, Borgen & Dardarian Oakland, CA Norma Cantu Professor University of Texas, Austin School of Law San Antonio, TX Gilberto Cardenas Assistant Provost and Director Institute for Latino Studies University of Notre Dame Notre Dame, IN Roberto Cruz Corporate Affairs Director AT&T Public Relations Basking Ridge, NJ Hector J. Cuellar Managing Director Bank of America Securities Los Angeles, CA Bette F. DeGraw Dean, College of Extended Education Arizona State University Tempe, AZ Hon. Liz Figueroa State Senator California State Senate Sacramento, CA Herlinda Garcia Principal, J.P. Henderson School and Trustee, Houston Community College System Houston, TX Albert Gurulé Owner/Manager Pueblo Community Corrections/Southwest Medical Pueblo, CO Frank Herrera, Jr. President The Law Offices of Frank Herrera, Jr. San Antonio, TX 2002-2003 Officers CHAIR: Joseph A. Stern FIRST VICE CHAIR: Herlinda Garcia SECOND VICE CHAIR: Teresa Leger de Fernandez THIRD VICE CHAIR: Al Gurulé SECRETARY/TREASURER AND FISCAL AND FUNDRAISING COMMITTEE CHAIR: Hector J. Cuellar PROGRAM AND PLANNING COMMITTEE CHAIR: Thomas B. Reston COMMUNITY EDUCATION AND LEADERSHIP DEVELOPMENT (CELD) COMMITTEE CHAIR: Gilberto Cardenas PERSONNEL AND NOMINATIONS COMMITTEE CHAIR: Ann Marie Wheelock PRESIDENT AND GENERAL COUNSEL: Antonia Hern´ ndez a MALDEF PROPERTY MANAGEMENT GROUP CHAIR: Frank Herrera, Jr. 18 | MALDEF 35TH ANNIVERSARY INDEPENDENT AUDITOR’S REPORT Board of Directors Mexican American Legal Defense and Educational Fund Los Angeles, California I have audited the accompanying combined statement of financial position of the Mexican American Legal Defense and Educational Fund (a nonprofit corporation), as of April 30, 2003, and the related combined statements of activities and cash flows for the year then ended. These financial statements are the responsibility of the organization’s management. My responsibility is to express an opinion on these financial statements based on my audit. Information for the year ended April 30, 2002, is summarized and presented for comparative purposes only and was extracted from the financial statements for that year, on which an unqualified opinion, dated July 11, 2002, was expressed. I conducted my audit in accordance with U.S. generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Mexican American Legal Defense and Educational Fund as of April 30, 2003, and the changes in its net assets and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles. My audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule of functional expenses and the summary of program expenses accompanying the basic financial statements are presented for additional analysis and are not a required part of those statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in my opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Michael W. Duran, C.P.A. Fullerton, California July 5, 2003 TOTAL PUBLIC SUPPORT Individual and Corporate Contributions $1,569,236 (34%) Grants from Foundations and Trusts $1,999,648 (43%) TOTAL EXPENSE ALLOCATION Fundraising & General Support $490,958 (8%) Community Education $1,121,544 (18%) Legal Expenses $2,847,715 (47%) LEGAL EXPENSE ALLOCATION Higher Education $362,338 (13%) Public Resource Equity $248,175 (9%) Other $70,397 (2%) Political Access $670,544 (23%) Education $395,746 (14%) Special Events $1,041,549 (23%) Public Policy $1,617,436 (27%) Immigration Program $532,812 (19%) Employment $567,703 (20%) 2002-2003 ANNUAL REPORT | 19 C O M B I N E D S TAT E M E N T OF CASH FLOW 2003 2002 FOR THE YEARS ENDED APRIL 30, 2003, AND 2002 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from grants and contributions for programs and supporting services Cash received from special events Cash received from professional fees and awards Rental income received Interest and dividend income Miscellaneous income Cash paid for programs and supporting services Cash paid for rental expenses, excluding interest Interest paid Net Cash Provided (Used) By Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Net (additions) withdrawals from investments Building & tenant improvements Purchases of furniture and equipment Net Cash Provided (Used) By Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in line of credit Principal payments on SBA Loan Principal payments on capital leases Increase (decrease) in fiduciary accounts Cash received for capital campaign Endowments and other capital additions Net Cash Provided (Used) By Financing Activities Net Increase (Decrease) In Cash Beginning Cash Balance Ending Cash Balance RECONCILIATION OF CHANGE IN NET ASSETS TO CASH PROVIDED BY OPERATING ACTIVITIES Change in net assets ADJUSTMENTS TO RECONCILE CHANGE IN NET ASSETS TO CASH PROVIDED BY OPERATIONS: Capital additions Depreciation and amortization Investment (gains) losses (INCREASE) DECREASE IN: Grants & pledges receivable Accounts receivable Prepaid expenses Deposits INCREASE (DECREASE) IN: Accounts payable Accrued vacation Accrued interest Accrued property taxes Tenant and event deposits Net Cash Provided (Used) By Operating Activities SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES Write-off of uncollectible pledges upon termination of Los Angeles Capital Campaign $ 3,068,389 1,041,549 802,729 279,942 203,615 90,451 5,486,675 (6,065,017) (422,996) (35,490) (1,036,828) 15,850 (1,671) (64,444) (50,265) 46,046 (5,786) (72,385) (913,373) 250,000 (695,498) (1,782,591) 2,901,322 $ 1,118,731 $ 2,725,318 890,625 996,624 449,381 277,383 97,187 5,436,518 (5,610,103) (457,467) (96,889) (727,941) 335,627 (75,059) 260,568 (125,919) (6,086) (65,497) (1,046,947) 25,000 (1,219,449) (1,686,822) 4,588,144 $ 2,901,322 $ (1,356,630) $ (1,100,262) (250,000) 406,329 723,399 (500,495) (40,955) (49,977) 7,026 24,475 $ (1,036,828) $ 122,000 392,531 454,181 (252,191) (234,520) (11,827) (64,987) (2,208) (27,870) (2,788) (727,941) $ (122,000) 20 | MALDEF 35TH ANNIVERSARY C O M B I N E D S TAT E M E N T OF ACTIVITIES F O R T H E Y E A R S E N D E D A P R I L 3 0 , 2 0 0 3 , A N D 2 0 0 2 (With Summary Information for Prior Year) PERMANENTLY RESTRICTED Rockefeller Temporarily Restricted Endowment Prog. Reserve Unrestricted PUBLIC SUPPORT AND REVENUE Public Support Grants from foundations and trusts Individual and corporate contributions Capital Campaign Special Events Total Public Support Revenue Professional fees and awards Net rental income (loss) Interest income Dividend income Investment gains (Losses) Other income (expense) Total Revenue Total Support & Revenue Net Assets Released from Restrictions EXPENSES Program Services Litigation Public policy and research Community education and services Total Program Services Supporting Services Management and general Fundraising and special events Total Supporting Services Total Expenses Change in Net Assets Net Assets at Beginning of Year Net Assets at End of Year 183,606 307,352 490,958 6,077,653 (1,002,814) 7,371,702 $ 6,368,888 2,847,715 1,617,436 1,121,544 5,586,695 682,025 (392,102) 121,119 82,496 (700,416) 90,451 (116,427) 1,661,028 3,413,811 $ 505,818 230,088 – 1,041,549 1,777,455 Total All Funds 2002 2001 $ 1,493,830 1,339,148 250,000 – 3,082,978 $ – – – – – $ – – – – – $ 1,999,648 1,569,236 250,000 1,041,549 4,860,433 $ 2,337,640 639,869 (122,000) 782,570 3,638,079 – – – – – – – 3,082,978 (3,413,811) – – – – (22,983) – (22,983) (22,983) – – – – – – – – – – 682,025 (392,102) 121,119 82,496 (723,399) 90,451 (139,410) 4,721,023 1,366,824 (264,875) 152,611 124,772 (454,181) 97,187 1,022,338 4,660,417 – – – – – – – – – – – – 2,847,715 1,617,436 1,121,544 5,586,695 2,526,880 1,771,796 896,830 5,195,506 – – – – (330,833) 5,094,163 $ 4,763,330 – – – – (22,983) 299,389 $ 276,406 – – – – – 1,608,905 $1,608,905 183,606 307,352 490,958 6,077,653 (1,356,630) 14,374,159 $ 13,017,529 195,828 369,345 565,173 5,760,679 (1,100,262) 15,474,421 $14,374,159 2002-2003 ANNUAL REPORT | 21 C O M B I N E D S TAT E M E N T OF FINANCIAL POSITION PERMANENTLY RESTRICTED Rockefeller Temporarily Restricted Endowment Prog. Reserve A P R I L 3 0 , 2 0 0 3 (With Summary Information for Prior Year) Unrestricted ASSETS Cash and cash equivalents Investments Accounts receivable Grants and pledges receivable Prepaid expenses Deposits Land and building Furniture and equipment Law library Less: accumulated depreciation Total Assets $ 369,498 3,024,860 561,659 – 76,829 40,930 10,064,565 1,282,686 217,499 (3,543,012) $ 12,095,514 Total All Funds 2002 2001 $ 442,129 2,718,951 – 1,602,250 – – – – – – $ 250,000 26,406 – – – – – – – – $ 276,406 $ 57,104 1,551,801 – – – – – – – – $ 1,118,731 7,322,018 561,659 1,602,250 76,829 40,930 10,064,565 1,282,686 217,499 (3,543,012) $ 18,744,155 $ 2,901,322 8,061,271 520,704 1,101,755 26,852 40,930 10,062,894 1,218,242 217,499 (3,136,684) $21,014,785 $ 4,763,330 $ 1,608,905 LIABILITIES Accounts payable Accrued vacation Deposits Line of credit Capital lease obligations Note payable, small business admin. Construction loan payable, CRA Fiduciary accounts Total Assets $ 148,058 150,197 7,267 398,511 107,070 115,526 4,800,000 – $ 5,726,629 $ $ – – – – – – – – – $ – – – – – – – – $ 276,406 $ $ – – – – – – – – – $ 148,058 150,197 7,267 398,511 107,070 115,526 4,800,000 – $ 5,726,629 $ 141,032 125,722 7,267 352,465 179,455 121,312 4,800,000 913,373 $ 6,640,626 NET ASSETS Designated for litigation reserve Undesignated Plant fund Restricted by donors Total Net Assets Total Liabilities and Net Assets $ 44,775 3,210,462 3,113,648 – $ 6,368,885 $ 12,095,514 $ – – 250,000 4,513,330 $ 4,763,330 $ 4,763,330 $ – – – 276,406 $ 276,406 $ 276,406 $ – – – 1,608,905 $ 1,608,905 $ 1,608,905 $ 44,775 3,210,462 3,363,648 6,398,641 $ 13,017,526 $ 18,744,155 $ 53,849 3,870,420 3,447,433 7,002,457 $14,374,159 $21,014,785 See the accompanying notes and accountant’s report. 22 | MALDEF 35TH ANNIVERSARY NOTES MEXICAN AMERICAN LEGAL DEFENSE AND EDUCATIONAL FUND NOTES TO FINANCIAL STATEMENTS APRIL 30, 2003 NOTE A - ACCOUNTING PRINCIPLES AND POLICIES The financial statements of the Mexican American Legal Defense and Educational Fund (MALDEF), have been prepared on the accrual basis of accounting. The following summary of significant accounting principles and policies is presented to enhance the usefulness of the financial statements to the reader. Nature of Activities MALDEF is a national nonprofit organization that seeks to promote and protect the civil rights of Hispanics in the areas of education, employment, voting rights, immigration and language issues. MALDEF also administers scholarships for Hispanic law students and conducts leadership development and community education programs. MALDEF is headquartered in Los Angeles and has regional offices in Chicago, San Antonio, Atlanta and Washington D.C., and satellite offices in Sacramento and Houston. Revenue and Expense Recognition Public support is recognized as it is received or when an unconditional promise to give has been made to the organization. Revenue is recognized as it accrues and expenses are recognized as they are incurred. Donated assets other than cash are recorded when received at their estimated fair market value. Support restricted by the donor to a specific program or for a specific period is reported as an increase in temporarily restricted net assets. Endowments and other nonspendable grants are reported as increases in permanently restricted net assets. As the funds are released from their restrictions, they are reported as a transfer to unrestricted net assets. All investment income, including interest, dividends, gains and losses, is recognized as unrestricted unless specifically restricted by the donor. All program and supporting expenses are reported as reductions in unrestricted net assets. Financial Statement Presentation MALDEF presents its financial statements in accordance with Statement of Financial Accounting Standards (SFAS) No. 117, “Financial Statements for Not-for-Profit Organizations.” Under SFAS No. 117, the organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. In order to ensure observance of limitations and restrictions placed on the use of resources available to MALDEF, its internal accounts continue to be maintained in accordance with the principles of fund accounting. Resources for various purposes are classified for internal accounting purposes into funds established according to their nature and purpose. Contributions MALDEF accounts for the contributions it receives in accordance with SFAS No. 116, “Accounting for Contributions Received and Contributions Made.” Under SFAS No. 116, the organization recognizes contributions at the time they are pledged. Accordingly, pledges receivable as of the end of each period are included in the recognized public support for the period, which is categorized as unrestricted, temporarily restricted, or permanently restricted depending on the existence and nature of any donor restrictions. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and TO F I N A N C I A L S TAT E M E N T S All investment income, including interest, dividends, and gains and losses (both realized and unrealized), is reported as unrestricted unless specifically restricted by the donor. For the year ended April 30, 2003, the net investment losses of $723,399 reported in the combined statement of activities include net realized losses of $162,754 and investment fees of $49,573. assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Property and Equipment Purchases of land and building, furniture, fixtures, equipment, and capitalized additions to the law library, if any, are recorded at cost. Property and equipment received as donations are recorded at estimated fair market value. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. (See Note E.) Investments MALDEF accounts for and presents its investments in marketable securities in accordance with SFAS No. 124, “Accounting for Certain Investments Held by Not-for-Profit Organizations.” Under SFAS No. 124, the organization is required to report its investments in marketable securities at fair market value and, accordingly, recognize currently all gains and losses both realized and unrealized. (See Note C.) Income taxes MALDEF is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and under Section 23701d of California’s Revenue and Taxation Code. Therefore, provisions for Federal and State income taxes are not required on income related to the organization’s exempt purpose. Accrued Vacation (Personal Leave) Personal leave may be used by all MALDEF full-time employees for any purpose, including vacations and illnesses. Personal leave is earned as follows: *Employees hired before January 5, 1996, accrue 20 work days per year the first two years of employment and 25 days thereafter. *Employees hired after January 5, 1996, accrue 20 work days per year the first four years of employment and 25 days thereafter. All employees will cease to earn personal leave if their personal leave balance exceeds their yearly allotment minus 5 days. Rights to payment of any unused personal leave at termination vest at the outset of employment. Liability for unused vacation/personal leave is accounted for in accordance with Statement of Financial Accounting Standards No. 43, “Accounting for Compensated Absences,” promulgated by the Financial Accounting Standards Board. NOTE D - GRANTS AND PLEDGES RECEIVABLE Grants and pledges receivable consist of formal grants and other unconditional promises to give to the organization. The scheduled collection of grants and pledges receivable at April 30, 2003, is as follows: Scheduled to be received within one year $1,264,750 Scheduled to be received over two to five years 337,500 $1,602,250 NOTE E - PROPERTY AND EQUIPMENT Property and equipment as of April 30, 2003, and the estimated lives used for depreciation are summarized as follows: Cost or Basis $660,000 Useful Life N/A Land Building (including total renovation costs of $6,186,858 plus tenant improvement costs of $676,036) Furniture & equipment Law library 9,404,565 1,282,686 217,499 $11,564,750 40 Yrs. 5-10 Yrs. 10 Yrs. Depreciation expense for non-building related furniture, fixtures, equipment, law library, and leasehold improvements for the current year was $170,215 and is allocated within program and supporting services expenses. Depreciation expense for the building and the related furniture, fixtures, and equipment was $236,114 and is included in the net rental loss shown in the combined statement of activities. NOTE F - ROCKEFELLER PROGRAM RESERVE FUND In May 1988, MALDEF received a special stabilization grant from The Rockefeller Foundation in support of its litigation activities and establishing a program reserve fund endowment of $736,963. In April 1994 and January 1999 the Foundation increased its grant to the reserve fund, adding $371,942 and $500,000, respectively, to the endowment. To-date, the Foundation’s nonspendable additions to the program reserve fund total $1,608,905, and are reported as a permanent endowment in support of MALDEF’s litigation activities. NOTE B - CASH AND CASH EQUIVALENTS Cash and equivalents at April 30, 2003, were as follows: MALDEF Fiduciary Funds Accounts Total Petty cash $ 3,672 $ 3,672 General savings & checking 702,820 702,820 Money market funds & other cash equivalents 351,634 0 351,634 Certificates of deposit 60,605 60,605 $1,118,731 $0 $1,118,731 The amount of cash placed with financial institutions and in excess of federally insured limits at April 30, 2003, was $464,846. NOTE G - LINE OF CREDIT The organization has an unsecured revolving line of credit of $1,000,000, of which $600,000 was unused at April 30, 2003. Bank advances on the credit line are payable on demand and carry an interest rate equal to the bank’s prime rate (4.25% as of April 30, 2003). NOTE C - INVESTMENTS Investments, which consist of publicly traded marketable securities, are stated at fair market value. The cost and market values of investments at April 30, 2003, were as follows: Cost U.S. Treasury notes & funds $1,068,720 Other fixed income 968,999 Common stocks 4,107,171 Mutual funds 386,012 $6,530,902 Market $1,196,961 1,067,108 4,814,087 243,862 $7,322,018 Unrealized G(L) $128,241 98,109 706,916 (142,150) $791,116 NOTE H - FIDUCIARY ACCOUNTS MALDEF is often selected to act as the custodian of funds raised in certain collaborative efforts of other nonprofit organizations. As the fiscal agent for these cooperative programs, MALDEF holds donated funds in trust to be paid out as directed by the participating organizations. As of April 30, 2003, there were no outstanding funds held in trust. NOTE I - COMMITMENTS AND CONTINGENCIES Employee Health Insurance Plan MALDEF offers all full-time employees, effective on the first day of the month following employment, a 2002-2003 ANNUAL REPORT | 23 NOTES TO F I N A N C I A L S TAT E M E N T S operating the newly acquired office building housing its national office in Los Angeles. The name of this sponsored corporation is “MALDEF Property Management Corp.” (MPMC). The assets, liabilities, and net income of MPMC are combined with MALDEF’s in the combined financial statements. The net income or loss from the building’s rental operations is presented as a single item of revenue in the combined statement of activities. All intercompany revenue and expense items have been eliminated. The following information describes the nature and activities of MPMC, and provides details regarding certain items combined under MALDEF’s plant fund. Nature of Activities (MPMC) MPMC is a California public benefit corporation, formed on May 3, 1991. Its purpose is to own and operate the building housing MALDEF’s national headquarters in Los Angeles, providing lease space exclusively to governmental agencies and organizations which are tax-exempt under Section 501(c)(3) of the Internal Revenue Code. Construction Loan Payable, CRA (and contingent interest accrual) On June 4, 1992, MPMC entered into an “Owner Participation and Loan Agreement” with The Community Redevelopment Agency of the City of Los Angeles (the “CRA”) in connection with MPMC’s renovation project. In accordance with the agreement, the CRA provided construction financing of $4,500,000. The CRA’s construction loans are currently presented on MALDEF’s balance sheet at $4,800,000, consisting of a “commercial rehabilitation loan” for $2,000,000 and a “residual receipts loan” of $2,500,000 plus accrued interest of $300,000 through August 1, 1996. On June 28, 2002, the City Council approved a fee-forservice repayment plan for the $2,800,000 residual receipts loan over ten years and a waiver of the annual 3.0% interest ($60,000) on the commercial rehabilitation loan until 2006. Under this plan, expenditures by MALDEF on its educational and healthcare outreach programs in the City of Los Angeles, above an established baseline, together with all lease subsidies by MPMC to its nonprofit tenants, will be credited toward repayment of principal on the residual receipts loan and interest on the commercial rehabilitation loan. No principal payments will be required on the commercial rehabilitation loan until 2006. In the CRA’s draft agreement dated May 2, 2003, interest of $791, 036 (accrued from August 1, 1996 through April 30, 2002) has been added to the residual receipts loan. MALDEF’s management does not agree with this addition of interest and is negotiating the elimination or reduction of the accrual. Should the CRA’s understanding prevail, in whole or in part, MALDEF will recognize in its financial statements the appropriate accrual of interest. MALDEF has guaranteed the CRA loan plus all accrued interest. Note Payable, Small Business Administration On May 10, 1995, the Small Business Administration (SBA) authorized a loan to MPMC of up to $189,700 to repair damages caused by the January 1994 Northridge earthquake. Interest on amounts borrowed is at 4.0% per annum. Monthly payments of $913, principal and interest, began October 18, 1995, and are to continue at the same amount on any remaining balance through the full 30-year term of the note, which matures on May 18, 2025. The note is secured by deed of trust but is subordinate to the CRA construction loans. MALDEF has guaranteed the note. Through April 30, 1999, $160,500 had been drawn on the note, leaving an additional $29,200 available. No additional funds have been drawn and management believes no further draws will be required. If no further amounts are drawn, the current principal balance of $115,526 will be fully amortized by January, 2017. Summary of Loan Maturities Principal payments under the pending CRA repayment plan and the SBA note are scheduled as follows: Year Ending April 30, 2004 2005 2006 2007 2008 Thereafter CRA Construction Loan $560,000 280,000 280,000 2,280,000 280,000 1,120,000 $4,800,000 SBA Loan comprehensive choice health insurance plan at no cost to the employee, with 100% coverage for innetwork services. The monthly premiums paid by MALDEF for individuals and families range from $250 to $800, respectively. Operating Leases MALDEF leases the office facilities at each of its regional and satellite locations. In addition, MALDEF leases various items of office equipment used at these locations and its national headquarters. As of April 30, 2003, the future minimum rentals due under these operating leases were as follows: Year Ended April 30, 2004 2005 2006 2007 2008 Facilities $299,020 213,035 124,584 39,654 0 $676,293 Equipment $94,867 77,243 38,070 15,717 5,680 $231,577 Total $6.442 $566,442 6,705 286,705 6,978 286,978 7,263 2,287,263 7,559 287,559 80,579 1,200,579 $115,526 $4,915,526 Rent expense for the current year was $322,103, and equipment rental was $106,354. Both have been appropriately allocated among both program and supporting services. Capital Leases MALDEF leases a substantial amount of its computer systems under two capital leases. The economic substance of these leases is that MALDEF is financing the acquisition of the systems through them, and accordingly, the computer systems are recorded as assets and the lease obligations as liabilities. As of April 30, 2003, the cost basis and accumulated depreciation for these computer systems were $352,052 and $246,435, respectively, and are included in MALDEF’s property and equipment. As of April 30, 2003, the future minimum rentals due under these capital leases were as follows: Year Ended April 30, 2004 2005 Total minimum payments Amount representing interest Present value of payments $82,460 26,640 109,100 (2,030) $107,070 Income Taxes (MPMC) MPMC is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and under Section 23701d of California’s Revenue and Taxation Code. Accordingly, provisions for Federal and State income taxes are not required on income related to the Organization’s exempt purpose. Pursuant to the Internal Revenue Service’s determination letter, MPMC is to lease space exclusively to governmental agencies and organizations which are exempt under Section 501(c)(3) of the Internal Revenue Code and which are dedicated to serving the minority communities within the inner city of Los Angeles. The organization’s activities go beyond merely acting as landlord, and extend to facilitating and assisting the programs carried on by its tenants and providing common facilities for their use. In addition, MPMC will require its tenants to participate in a joint council to coordinate their activities to best serve the community. Due to MALDEF MALDEF assisted MPMC throughout its development stage and initial operations with short-term operating advances required to meet both operating and capital campaign expenses. As of April 30, 2003, the unpaid balance of these advances was $249,310. In July 1995, MALDEF’s board of directors unanimously approved a -0-% interest rate on all loans made to MPMC. Leasing Operations MPMC leases the office space of its entire building under operating leases for varying terms and rates per square foot. As of April 30, 2003, the building is rented out at seventy-five percent (75%) of capacity. Its rentable square footage is leased under operating leases providing for future minimum rentals as follows: Year Ending April 30, 2004 2005 2006 2007 Total $107,171 111,830 116,490 121,150 $456,641 Capital Campaign MALDEF has embarked on a new capital campaign program to acquire a permanent facility for its Washington D.C. regional office. Until a building is acquired, contributions to this capital campaign are considered temporarily restricted and held within MALDEF’s Plant Fund. Commitments Under Construction Loan Payable to CRA (See Note K.) NOTE J - RETIREMENT PLAN On May 1, 1991, MALDEF adopted a defined contribution tax-deferred annuity plan in accordance with rules provided under Section 403(b) of the Internal Revenue Code. The plan covers all MALDEF employees as they become eligible to participate. Under the plan, employees may elect to contribute a percentage of their gross salary up to a statutory maximum. MALDEF makes a matching contribution of the first four percent (4.0%) of an employee’s elective contribution. MALDEF’s matching contributions for the current year were $55,981. NOTE L - RESTRICTIONS ON NET ASSETS Temporarily restricted net assets consist of donations earmarked for specific programs or to be utilized over a designated period. Included in this amount as of April 30, 2003, is $2,360,000 earmarked for Affirmative Action and scheduled for release evenly over the next two fiscal years through April 2005. The balance of $2,153,330 is earmarked for other programs and uses and is also scheduled for release over the next two fiscal years. Permanently restricted net assets consist of endowment and other nonspendable funds to be held in perpetuity or for an extended period. NOTE K - COMBINED FINANCIAL STATEMENTS On May 3, 1991, MALDEF formed a California corporation for the purpose of holding title to and 24 | MALDEF 35TH ANNIVERSARY Acknowledgements ABOUT THE COVER ARTIST José Ramirez www.ramirezart.com José Ramirez is an artist and teacher who was born and lives in Los Angeles. He has been teaching for 10 years in the South Central, East L.A. and Pico-Union neighbhoods of Los Angeles, and his work as an artist has taken him to New York, Japan, San Francisco, Washington, D.C. and Mexico. He received his teaching credential from Cal State Los Angeles and a BFA and MFA in Art from U.C. Berkeley. “My paintings combine references to history and culture to provide a context for understanding the contemporary issues we face. I try to comment on these struggles while visualizing the hopes and dreams of our community.” OTHER ACKNOWLEDGEMENTS Writer/Producer J.C. Flores National Director of Communications Editor Vibiana Andrade Vice President of Public Policy and Communications Graphic Design and Printing by Chenoah Mickalites Macson Printing and Lithography FEATURED ARTISTS Paintings by Manuel Abril Irene Carranza Yolanda Gonzalez Cristian Guerrero Olivia Villanueva Photography by George Rodriguez Teryl Jackson “Two Guitars in Love” OLIVIA VILLANUEVA MALDEF Offices NATIONAL OFFICE AND LOS ANGELES REGIONAL OFFICE 634 S. Spring. St., 11th Floor Los Angeles, CA 90014 (213) 629-2512 FAX (213) 629-0266 WASHINGTON, D.C. REGIONAL OFFICE 1717 “K” St., NW, Suite #311 Washington, DC 20036 (202) 293-2828 FAX (202) 293-2849 ATLANTA REGIONAL OFFICE 41 Marietta St., Suite #1000 Atlanta, GA 30303 (678) 559-1071 FAX (678) 559-1079 SACRAMENTO PUBLIC POLICY OFFICE 926 “J” St., Suite #422 Sacramento, CA 95814 (916) 443-7531 FAX (916) 443-1541 CHICAGO REGIONAL OFFICE 188 W. Randolph St., Suite #1405 Chicago, IL 60601 (312) 782-1422 FAX (312) 782-1428 HOUSTON PSP PROGRAM Ripley House 4410 Navigation, Suite #229 Houston, TX 77011 (713) 315-6494 FAX (713) 315-6404 WWW .MALDEF.ORG SAN ANTONIO REGIONAL OFFICE 140 E. Houston St., Suite #300 San Antonio, TX 78205 (210) 224-5476 FAX (210) 224-5382