Something for the Little People

The Twin Cities-based Northwest Area Foundation has a $450 million endowment to use on charitable programs. So why has it been nearly invisible for years?

In November, a potential class-action lawsuit was filed in federal court by Julio Romero, a Yakima County farmworker, charging the foundation with breach of contract. According to the lawsuit, Northwest Area Foundation promised to provide at least $1.25 million to Yakima County residents. In anticipation of that windfall, residents collectively spent more than 10,000 hours in meetings between December, 2001 and April, 2002. The lawsuit further charges that participants in the project--many of them poor, Mexican farmworkers--traveled long distances and took time off work to attend meetings that sometimes lasted an entire day. Approximately 300 people are potentially eligible to become plaintiffs.

The lawsuit is extraordinary in that it pits some of the poorest residents of the country, migrant farmworkers, against a $425 million foundation bankrolled by the timber and railroad empire of James J. Hill. "My grandfather came to work as a bracero in the railroad times," says Silva. "That money is out of the sweat of the Mexican workers and out of the stolen land of the indigenous people."

"Who are the poorest, most mistreated people?" asks Matthew Metz, the Seattle-based attorney who is representing the workers. "The Mexican migrants. The foundation basically turned their back on them in the name of advancing their anti-poverty program. It's just left a really bad taste in everyone's mouths."

The lawsuit is also remarkable because it is extremely rare for foundations to find themselves in court. After all, their mission is to give away money--a practice that usually elicits gratitude, not legal battles. "I have never heard of anything like it in my life," says Anne Kubisch, director of the Aspen Institute's Roundtable on Comprehensive Community Initiatives. "I've never heard of a grantee or potential grantee suing a foundation for not having given a grant."

There were initial talks of a settlement, but now both sides have dug in their heels. Metz is threatening an all-out publicity war against the foundation. He hopes to mobilize Yakima residents to mount protests in various communities where the foundation has operations, including at its St. Paul offices. Metz says any proceeds from the lawsuit will be deposited in a community trust to help poor people in the area. "There's not a lot of resources there right now," he notes. "The state's broke. The local governments are still dominated by Anglos who don't care about Mexicans very much. There was never any real wealth there so there are no foundations. There's really not a lot of opportunity."

Stauber insists that the foundation has done nothing wrong. He charges that the plaintiffs are simply trying to extort money from the Northwest Area Foundation by making threats. As evidence, Stauber reads from a letter that was sent to the foundation prior to the filing of the lawsuit. It promises a "long, bruising, time-consuming, and expensive legal and public relations fight with an angry community" unless the foundation ponies up some money. "Give us a million and a quarter or we'll go after you," Stauber bristles. "We feel that to settle is to send the message that any time one person in a community is unhappy with a decision we've made they can come after us and they get a big chunk of change. We are defending our ability to do innovative work with low-income communities." The grantmaker has filed a motion to dismiss that is currently pending.

Even if Northwest Area Foundation succeeds in having the class-action case thrown out, its legal troubles will not be over. Last month Mario Vargas filed a lawsuit in United States District Court against the Northwest Area Foundation, Stauber, and two other employees, charging that he was illegally discriminated against. He is seeking more than $75,000 in damages. Vargas was fired by the foundation in June after two years of employment, primarily working on the Washington State project. As the only native Spanish speaker on the project, he was crucial in mobilizing the migrant farmworker community in Yakima County. Vargas says he was reprimanded for speaking Spanish and had to put up with insulting jokes made by staff members. In addition, he believes he was pushed out because of his opposition to abandoning the Yakima project. "They started to look at character flaws in me and they started to question my loyalty to the foundation because I was not supporting the management decision to terminate the project," he says.

Vargas was let go after failing to pass a performance review. His attorney, Albert Goins, contends that this was simply a means to rationalize firing his client. "This performance plan, in our view, was really set up as a convenient way of justifying his discharge after they decided to abandon the Yakima project," says Goins.

Stauber maintains that the reason for Vargas's firing is simple. "We had performance issues about his work," he says. "Those were made clear to him, he refused to address them, and we terminated him." The foundation also points out that the Minnesota Department of Economic Security declined to award Vargas unemployment benefits.

Nearly a year after being fired Vargas has yet to find another full-time job. "I have landed some great interviews in town, but for some reason I've not been able to land a job and land on my feet," he says. Vargas is still battling poverty--only this time it's his own.

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