A federal investigation into the spending practices of Baltimore's Health Education Resource Organization is continuing as the group faces a widening financial crisis, board members are resigning, and staff are being laid off, the Baltimore Sun reports. The investigation was launched after reports surfaced that HERO executive director Leonardo Ortega misused organization funds to hire a personal trainer, which he listed in expense reports as "community relations," and to give himself thousands of dollars in bonuses during a time the agency faced financial hardships. A former staff member also reported seeing reimbursement checks for travel expenses paid to Ortega for times he was not traveling on business for HERO.
The FBI has requested HERO's financial records and has met with some staff members, HERO board president Carlton Smith says. A state audit of a $50,000 grant and a city review of HERO's use of $1.4 million in federal funds found no wrongdoing. HERO officials say Ortega's actions were permitted under the conditions of his employment contract.
But the investigations have taken their toll on agency staff and on donations to the organization, and six HERO staff members were laid off this week due to financial problems. An emergency board meeting was called last week after HERO was unable to pay some staff members. Four board members have resigned since the allegations of misuse of HERO funds were made in March. The agency also is having difficulty attracting donations for its upcoming June 6 AIDS Walk and Run, which is its largest annual fund-raising event.