By Jared Chausow
By Katie Toth
By Elizabeth Flock
By Albert Samaha
By Anna Merlan
By Jon Campbell
By Jon Campbell
By Albert Samaha
The e-mail had come overnight from her board of directors. On March 27, she had been scheduled to meet the six directors of VIP (as it's known) to discuss her 17-year tenure running the program, but fell ill.
Now, far from the VIP offices in East Harlem, she opened the e-mail's attachment, a letter dated the day before. "Please be advised that your employment is hereby terminated effective immediately," it read. According to the letter, the directors were canning their leader for what they described as "your actions in connection with the possible purchase of the building located at 145 East 117th Street"a building Perez had pursued for months.
Over at the VIP headquarters, the board's newest addition, Zarah Guzman, delivered the news to about a half-dozen senior managers. (VIP asked the Voice not to divulge the facility's locationit gives out only a P.O. box to the public for the protection of the battered women it serves.)
"Ms. Perez is no longer with us," Guzman told the employees. She explained that she did not have the authority to offer details, leaving the staff dumbfounded. The termination, as one high-level VIP officer explains, "seemed so totally unbelievable. Removing Grace from VIP is like taking Marian Wright Edelman out of the Children's Defense Fund. Grace is VIP and VIP is Grace."
In a neighborhood known for its vigilant activism, the news about Perez's firing spread fast. That day, a dozen East Harlem leadersnonprofit directors and business ownersrushed to VIP headquarters to demand to meet the board. Five days later, activists began circulating a petition that calls not only for Perez's reinstatement, but also for the directors' resignations. Within two days, it had attracted 350 signatures. By April 12, a campaign dubbing itself the Community Supporters of VIP had begun.
At the Julia de Burgos Latino Cultural Center, on Lexington Avenue, beneath makeshift placards that read "You are not acting in the best interests of our community," 35 or so community members discussed what they call "the crisis at VIP." Mostly players with ties to the agencyformer board members and staffersthey explained why they're rallying around Perez. For them, the outcry has a lot to do with her legacy. But it's fueled by something else: No one believes the board's reason for axing Perez. They see the dust-up more like a raid, a hostile takeover of an organization that Perez had cultivated for decades. And they pin the blame for her fall on the only man on the board at an agency that primarily serves women: Kenneth Diaz, who acts as its vice-chairman.
"This community is saying that this board has got to go," declared Elsa Rios, VIP's original founder.
"This board has got to go," offered the crowd in a muffled refrain.
The board has said little about the firing of Perez or its reaction. The Voice's repeated calls to each director went largely unanswered. Vivian Selenikas, who was elected the new chairperson last month, refused to discuss the matter at first. "The termination is an internal personnel matter and I'm not going there," she said. But then, several hours after a Voice reporter tracked down Diaz at his Queens apartment building, she sent a formal statement that ties Perez's sudden unemployment to the East 117th Street building. "Ms. Perez acted outside the scope of her authority and signed a contract . . . in violation of the Board's direction," she said in a prepared statement. "The board had no choice but to terminate her employment."
It's an explanation that few seem to accept. For reasons Perez and her backers may never uncover, what should have represented a high point in her careerfinding VIP a permanent homehas turned out to be her biggest defeat.
Perez is driving her Toyota through East Harlem to 145 East 117th Street, the building that she had hoped would become the permanent home of the nonprofit organization she's been involved with for more than 20 years.
She discovered the program in 1986, when it operated out of a closet-sized empty room at the East Harlem Council for Human Services as the sole safe haven for Spanish-speaking women in the city. Then an outreach worker, Perez spent days posting purple stickers that read "Necessita Ayuda? Llamame" on phone booths. She soon climbed the ladderfirst, working as a case manager; next, a program coordinator. By 1991, she'd assumed the top post of executive director.
On her watch, VIP has boosted its annual budget from $100,000 to $4 million. Staff and services have multiplied, too. Currently, the agency runs shelters and offers counseling, legal aid, and other assistance to some 750 women and their children in Manhattan, Queens, and the Bronx. It also operates the 24-hour Spanish domestic-violence hotline for New York State, fielding roughly 5,000 calls from Brooklyn to Buffalo per year. Meanwhile, its bilingual hotline for the city fields about 13,000.
Many attribute this growth entirely to Perez, who considers VIP a way of life. "VIP is not just a job," she says. "It's a commitment and it's a belief." Married with four children, Perez worked to expand the organization into the South Bronx, where she grew up. More recently, she's moved VIP to Queens. She's the type of executive director who would pull all-nighters to finish grant proposals or search for new funding sources while on vacation. "Grace put much more time and effort into VIP than her personal life," says Olga Rosado, who headed the VIP board several years ago. "If something needs to be done, she doesn't sit and wait. She jumps on opportunity. She tackles it."
Under Perez's guidance, VIP had thrived, raising enough funds that the organization began to think it could afford the fondest wish of any successful nonprofit: a building of its own.
"There it is," Perez shouts, pointing to an old brick building on a block of old brick buildings. The four-story residence has a padlocked fence; discarded soda bottles litter the yard. Empty for years, it requires some effort to get past the weathered facade. Still, Perez says, with a wistful sigh, "It has so much potential."
For years, the organization had saved and, little by little, set aside money for a home. In 2005, facing $5,660 in monthly rent and an expiring December 2008 lease on the horizon, Perez and the board at the time launched a capital campaign. "We were paying a huge amount in rent and we thought, 'Imagine applying that to a mortgage,' " says Melissa Mark Viverito, the district's city councilwoman and the board chairperson then.
In East Harlem, affordable real estate has become tough to find. But Viverito had heard about the East 117th Street structure through the grapevine; in fact, her brother has power-of-attorney status for the seller, who lives in Puerto Rico. Legally, he could not participate in any sale of the building, but he tipped off his sister to the seller's desire to unload the property nevertheless. She, in turn, told Perez. When Perez saw No. 145, she recalls, "I thought, 'This is perfect.' "
But before she could bring the matter before the board, the broker called and relayed to her that an investment group had already made an offer that VIP could not match$950,000.
Six months later, however, she got a call from Viverito, now a city councilwoman, who had discovered that No. 145 was back on the market. Perez swung into action, calling up the broker, and negotiated a lower price. She convinced the seller to drop to $700,000a steal compared to East Harlem's $1 million going rate for similar buildings. By April 2006, Perez had outlined an initial funding scheme for the board. With $300,000 in reserves, she told the members, VIP had enough for a down payment ($140,000) and closing fees ($35,000). She suggested seeking a 20-year mortgage at area banks, as well as grant money for renovations. According to board minutes, Perez was encouraged to pursue the deal.
For the next seven months, Perez did just that. She contacted an architect about renovations. She secured letters of interest for two bank mortgagesfirst, for $1.2 million; the second, $560,000. She applied for capital funding from the city and, with Viverito's help, obtained a $500,000 allocation toward the $693,000 rehab costs. She even found a real-estate lawyer to represent VIP during the closing, pro bono.
All along, the board was as enthusiastic about the deal as its executive director, which is reflected in meeting minutes and interviews. As part of the fiscal 2007 budget, it formally approved the purchase. Not once did members voice concerns about the numbers or misgivings about the transaction generally. At least, not until the contract would land in their hands.
On January 11, Perez received the purchase agreement, which she e-mailed to the then board chairperson, Jenny Rivera, a prominent Manhattan civil rights attorney who would resign abruptly weeks later. In the e-mail, Perez informed the chair that she was waiting for instructions from the lawyer. "In the interim," she wrote, "please review." The next day, Rivera responded with two letters: "OK."
Over the ensuing two weeks, however, Perez heard nothing. She sent two e-mails and made 21 phone calls to Rivera, she says, to no avail. As a January 26 deadline neared, she reached out instead to Diaz, the vice-chairman, e-mailing him and asking for help in contacting the chairperson. "The lawyer is expecting a signed contract from us," she wrote. But there was only silence.
By January 25, she took matters into her own hands. That day, the real estate agent informed Perez that, as she recalls, "the owner wanted to put this building back on the market." She made one final call to Rivera. And then, on January 26, she could wait no more for word, and signed the contract on her own authority. She cut a check for $140,000. She delivered the documents to the VIP attorney.
Back at her office, she finally got word from Diaz. In an e-mail sent that afternoon, he wrote: "The board has decided not to purchase the 117th Street property."
To hear the VIP directors tell it, Perez committed an insubordinate act when she signed the contract on the building sale. Although Perez says she was never told to stop pursuing the transaction, the board now claims that her termination "was necessitated due to her having disobeyed a direct order from the Board." Signing the sale contract without further instructions, the board says, "placed the organization at risk."
In a brief phone conversation with the Voice, Selenikas, the current chairperson, insists that she and her fellow directors want to buy a building for VIPjust not No. 145. Despite its bargain-basement price, the property would have amounted to a gamble, she maintains. "This property at this time is not the right decision." Why? "It's a complicated set of factors," she replies. "It has to do with the cost of the building and a variety of interconnected financial components." She adds, "The board didn't think it was in the best fiduciary interest of VIP."
Or, as another board member who spoke on condition of anonymity puts it: "We reviewed the numbers and we decided we weren't ready."
On January 29, Perez explained her actions in an e-mail to the board. "Since I had no indication that there were any questions about the contract or for that matter second thoughts," she wrote, "I honestly believed I could sign the contract." She had signed every other VIP contract, from insurance policies to funder pacts. She had even executed real estate binders for its eight shelters and 15 transitional apartments, according to Perez. Former board members and senior managers confirm that she was the only authorized person who had signed previous contracts for VIP.
"I should have been fired a hundred times over, then," she says, with sarcasm.
And then there are the numbers. Pious Thomas, the VIP fiscal officer, confirms that board members did not broach financial concerns with him. If they had, he would have stressed that, as he says, "this deal was not going to put VIP in a hole." By his calculations, the agency had to come up with $377,000 for renovation costs ($193,000) and rent and mortgage payments and other fees ($184,000) during 20 months' worth of construction. "That's doable," he says, since the agency could plug the gap with grants. To this day, he adds, "I have no idea what figures they looked at."
Neither does anyone else, which has, in part, fueled the neighborhood uproar. When City Councilwoman Viverito heard that the board had passed on the buildingand, therefore, chucked her $500,000 allocationshe wanted some answers. Not only was that allocation based on the board's own promise to seal the deal, but also on the City Council's rigorous vetting process, including financial audits and other proof of project feasibility.
Viverito wrote a heated February 13 letter to the board: "I am shocked and disappointed by the Board's cavalier decision." She asked for a formal explanation, listing nine questions. When she got no reply, she showed up at a board meeting to inquire in person. "It was a pretty unbelievable situation," she recalls. "None of them would speak at all."
Eventually, she met with Diaz and three other members at her office, but the exchange only raised more questions. "I didn't feel comfortable with their information," she admits. She'd asked who the board had consulted about the deal. Was it an accountant? A private auditor? They wouldn't say. Still angry, Viverito says, "I think it was lies. They're pulling this stuff out of the air."
Today, Perez and friends have become convinced that the building deal was a convenient excuse for the board to give her the boot. For months, she'd been bumping up against the directors, asking for guidance and getting nowhere. In the fall of 2006, she started seeking the help of a professional mediator to broker a truce. "There was a pattern of me making requests to them and them not responding," she says.
It didn't take long for word of the trouble to leak out into the neighborhood. Yolanda Sanchez, a veteran activist who has spearheaded the Community Supporters of VIP, heard about the friction in December. When the deal unraveled weeks later, she and her fellow activists called the board's leadership, urging mediation. When that didn't work, they targeted Rivera. "We thought, 'Cut off the head. Save Grace,' " Sanchez says. By this time, Rivera, the board chairperson had accepted a post under Attorney General Andrew Cuomo, heading his office's civil rights bureau. Activists worked their political ties, prodding state officials in the Latino community, trying to bend an ear.
On March 26, just days after their phone calls to Cuomo's office, Rivera abruptly resigned. She did not return repeated calls from the Voice seeking comment. But 24 hours after she stepped down, the board fired Perez.
In the intervening six weeks, the six directors have come under fire from angry activistsfielding petitions and phone calls, dodging complaints and labels like "runaway board" and "ghost board." But no one has inspired more suspicion than Kenneth Diaz, the sole male board member at the women's shelter, who has served on the body over the last eight years. Ironically, he came to the agency at the invitation of Perez, who had wanted to include men in its anti-violence mission. Today, her supporters fear that he's managed to plot her ousting and take away her organization.
"I'd say Kenneth is behind this," charges Rosado, the former chairperson, who served alongside Diaz for two years beginning in 2003. At the time, Diaz seemed the quiet yet conniving one, the wizard behind the curtain, the "chair on the side." Rosado has not joined the Community Supporters of VIP, but she echoes its members. "It's like Hillary and Bill," she says. "She was the gal behind the guy and, in reality, she called all the shots. Kenneth is the guy behind the gal."
Sandra Muñoz, another board member who served from 2002 to 2005 and who has signed on to the campaign, seconds that. "I believe he poisoned the board against Grace."
Muñoz and others see plenty of red flags. In 2005, they note, Diaz nominated two of his friends to the seven-member board. Then, 12 months later, the new board changed the organization's bylaws. In the past, the executive director had served on the governing body, with full voting rights. But in 2006, directors lessened Perez's influence, and kicked her off of the board itself. Both developments happened without her input; she was out on extended medical leaves.
"I believe he has an agenda," says Haydee Rosario, a longtime VIP volunteer who has applied to be a board member, expressing a common sentiment. Maybe he wants to control that $4 million budget, or maybe he's looking to employ his friends. "I don't know what it is," she acknowledges, "but it's not good for VIP."
It's all harsh criticism for a man whose colleagues outside East Harlem portray him as a do-gooder and devout Christian. "He's the kind of guy who just likes helping people," says Juan Martinez, of Progress, Inc., a nonprofit that Diaz and 24 other Puerto Rican leaders founded in 1980. Today, it's known for reforming the Progress High School for Professional Careers, in Brooklyn, a once failing city school turned educational success story. Diaz wrote the proposal for the school in the 1990s; he can still be found in its halls, volunteering at events, tutoring its students. One source familiar with the place calls him "a blessing." Sometimes, the source says, "you chat with him and you can see a sense of ministry come through him. I can see his persona and it's very unique."
After numerous attempts to speak with him, a Voice reporter visited Diaz at his co-op apartment in a quiet Queens neighborhood, and he agreed to a conversation. In person, he is the antithesis of hostility. A short, squat man who walks with a limp and uses a cane, he is soft-spoken and deliberate, pausing for long stretches at a time, as if to punctuate his points.
So what does he think about the portrait of him as the man out to undo Perez? "I don't appreciate people trying to see inside my head," he says flatly. He denies having any designs on VIP, other than to spread its anti-violence mission. As he tells it, he's simply a man of good intentions trying to live his life as his own missionary mother did. "My mother spent her whole life serving others," he says, "and that's the path I've tried to follow here."
Diaz suggests the maelstrom at VIPthe firing of Perez and the nixing of the building dealstems from the right motivations. "It's a nonprofit's dream not to have to worry about where they will operate. It's the optimum," he recognizes. But when it came time for the board of directors to deliberate on the contract, he says, "we didn't think we were in a position to move ahead."
Asked how he and the rest made that decision, Diaz evades the question. "It's fair to say that we consulted people who have a knowledge of these things."
Like whom? "It's fair to say that these were individuals in whom the board had confidence and on whose conclusions we relied."
At one point, Diaz implies that he and his colleagues just got cold feet. "The board's decision wasn't to kill the project," he maintains. "The decision was, 'At this time, with what we know now, we're not going to move ahead.' If there had been additional money, maybe the project would have looked more favorable and maybe the board could have made a different decision." He then offers, "The people on the board are good people with good minds and good intentions, and they feel comfortable with that decision."
So are you comfortable firing Perez? "I don't know if I would use the word comfortable. This was a difficult decision." He sits quietly, staring ahead. Then, he turns and says, "Are we finished yet?"
If VIP's board thought it was saving itself from risk by not purchasing a building, its subsequent actions have only put it in far more danger. Since Perez got canned on March 28, the board of directors have left VIP without an acting chief. No one is guiding the staff and dealing with the funders on a day-to-day basis. "It's a pretty untenable situation," says one senior manager who, along with six colleagues, took the unusual step of writing an April 16 two-page letter to VIP funders. In it, the senior management team expresses a no-confidence vote in the six-person board, asking all of them to step aside.
Some funders are getting leery of the chaos. "We are watching whether our money is being funneled into services," attests Patricia White of the New York Community Trust, which has allocated $30,000 of a $60,000 grant for Queens services. White says that she found out about Perez's firing from the community's petitionnot the board. And she hasn't had formal contact from the board yet. "I'd have to say that in the absence of an executive director we cannot release the rest of this money." Meanwhile, three internal sources report that at least one other foundation has already frozen a $50,000 payment; a May 2 memorandum from the senior managers to the VIP board confirms this and outlines other contracts that will expire by July 1, at the start of the new fiscal year, thereby jeopardizing various direct staff positions and programs in Manhattan and Queens.
In the April 21 statement, Selenikas suggests that the internal problems stem from the staff itselfand Perez. "Her conduct in the last 21 days, together with the participation of the management team in communicating inaccurate information to VIP's funders, is injuring the organization and the people it serves." She tells the Voice that the board is moving forward on its search for a new executive director. "It's my hope as well as the hope of the board of directors that the organization will be able to look forward to a new executive director and the expansion of programs for the women and children we serve."
Perez, for her part, isn't ready to move on yet. Since her firing, she's tried to drum up support for her reinstatement among domestic-violence colleagues. On a recent Friday afternoon, she met with five advocates at an East Harlem agency and laid out her version of eventshow hard she worked to build up VIP; how close she was to giving it a home; how fast it all fell apart.
"So the building and the money are all gone?" one advocate asked in disbelief.
"I can't say," Perez replied. "I find it too hard to accept."
Days later she was talking about "that fantastic building"how she could salvage that deal. Then she was delivered the bad news: The building was sold in March. "It's just painful," Perez says, choking up. "But Mr. Diaz and the board did not have that vision. Only I did."