The Star Chamber

When it was over, the August meeting of the Greater Dallas Hispanic Chamber of Commerce's board of directors appeared to have come and gone as if it were just another blasé gathering and there was no trouble whatsoever brewing in the nonprofit organization's waters.

Shortly after 6 p.m., chairman Jim Richardson Gonzales assumed his position behind the lectern, causing a hush to fall over the board members casually gathered around a conference table inside the Chamber's Oak Lawn offices. Seated at one end of the table was board member Adelfa Callejo, a Dallas attorney and Hispanic political stalwart who has been active in the Chamber for four decades. Next to her was a new face--Brenda Reyes, a small-business owner who in July, with Callejo's backing, was hired as the Chamber's new president--a full-time job that carries with it considerable clout within Hispanic business and political circles.

Reyes' presence at the head of the table reflects her recent and, in some political circles, roundly applauded return to the city's political landscape, from which she abruptly disappeared in 1997 after losing a bitterly contested race against John Loza for the District 2 seat on the Dallas City Council. On this Wednesday evening, Reyes and her new colleagues were all smiles as they turned their attention to the speaker.

Gonzales, a businessman who has served on the board for three years, started things off with an unusual request: He asked that the group meet behind closed doors in executive session. The audience--a reporter and Chamber employee Peter Borling--were escorted into a neighboring room, and the boardroom door was shut.

When the door was opened 20 minutes later, Gonzales was gone and a new man had assumed Gonzales' position behind the lectern. For the next hour, this man stiffly moved through the agenda, introducing various action items, which the board members hastily adopted with little or no debate. Curiously, they kept referring to the man as "chairman." Inside an hour, all their business was complete, and the board members once again retreated behind closed doors.

Out in the hallway, Borling, who handles the Chamber's finances and recently served as its interim president, shrugs his shoulders when asked what happened to Gonzales.

"He probably had to go somewhere," Borling says.

Gonzales did go somewhere. Specifically, he went away from the Chamber. For good.

That night, Gonzales submitted a two-page letter of resignation, making him the fifth board member to quit the 19-member body in recent weeks. In his letter, Gonzales complained that a small minority of the board "hastily" and "erroneously" subverted the Chamber's bylaws in a power grab. This, Gonzales wrote, was done at the exclusion of the full board and to the future determent of the Chamber itself, if not the Hispanic business community.

He didn't name names, but Gonzales also noted that he could no longer stomach the gossip mongering on the part of some "unscrupulous" board members whose words were "bordering on character assassination." Gonzales' resignation caught his colleagues by surprise and, in the process, signified that the controversy brewing inside the Chamber for weeks had finally boiled over.

At the heart of the dispute is Reyes, who resurfaced on the city's political waters in December when Loza surprised his city council colleagues by successfully nominating her to represent Hispanic interests on the DART board of directors. Despite that high-profile position, some Chamber board members say they resigned, in part, because of Reyes' background: Her literally rough-and-tumble past includes allegations that she lied about her residency during the 1997 council race and an arrest for fighting. Worse, they say, are Reyes' business credentials, which include a string of debts, a recent bankruptcy petition and a lawsuit she filed against the city of Dallas after it terminated a contract she had won to install and maintain a computer system that employees complained never worked.

To some, the latter subject is particularly unnerving because the Chamber, along with the city's other ethnic chambers, functions as a conduit through which hundreds of millions of dollars in government contracts targeted for minorities flow every year. As president, Reyes now has considerable influence in directing the flow of those dollars to Hispanic businesses and, in the process, new ability to cultivate loyal supporters. Once those contracts are awarded, however, the Chamber also functions as a resource to help entrepreneurs learn how to successfully carry out those contracts. Today, Reyes' critics wonder how she can do that, in light of her own rocky financial and political history.

More troubling than Reyes' background, her critics say, is the way in which a tiny fraction of the board "forced" her into the job--allegedly behind the backs of the other board members. To them, the move symbolizes the unwillingness on the part of old powers on the board, represented chiefly by Callejo, to relinquish their control over the Chamber to newly active Hispanics, who are anxious to play a bigger role in helping young Hispanic entrepreneurs realize their economic potential.

On its surface, the controversy looks like petty, insider politics at its ugly worst, brought on by a curious new alliance between the Callejo-backed Reyes and their one-time rival, Loza. But the trouble may be a sign of bigger battles to come as Dallas Hispanics, the city's largest ethnic group, begin to realize the economic and political clout they wield. A big question that remains is, how nasty will the battles be? In his resignation letter, Gonzales offered a subtle suggestion that the Chamber representatives must now decide whether they want to draw road maps to the future or battle lines over the present.

"It hurts me to see that individuals who disagree with the few are treated with disdain and are often characterized as not part of the 'team.' This should not be," Gonzales wrote.

"Regardless of our disagreements, we should hear each other out, and with respect, reconcile differences and present a united front. We are all Hispanic, and our concern should be as to how we serve our community, not how to control the board."

Evidently, the trouble inside the Chamber is something Brenda Reyes doesn't want known. At least that's the impression one gets from listening to the phone conversation taking place on this Thursday morning--the day after Gonzales resigned. The conversation is also a pretty good indication of just how nasty life has become at the Chamber.

On one end of the telephone is Amanda Moreno, a former Chamber board member who resigned July 12 and is currently sitting at a table inside the coffeehouse she owns in north Oak Cliff. On the other end of the line, an unidentified person is calling to say that Reyes has given her new employees instructions to inform any reporters, should they call, that Gonzales didn't really resign.

Moreno puts her hand over the mouthpiece and whispers that the caller, presumably a Chamber insider, is terrified of being identified. Moreno, who tells the caller they'll talk later and hangs up, says that person isn't the only one who feels threatened. Since she resigned, Moreno says she's heard that she may be sued if she dares publicly express her views on the Chamber. Unlike Gonzales, Moreno isn't shy about naming names: The source of the gossip--and, as far as she's concerned, the trouble at the Chamber--is Adelfa Callejo, a woman who Moreno says she used to admire but now loathes.

"If [Callejo] wants to sue me, I can be served at 336 West Davis Street," Moreno says. "I'm not afraid. I have money, and I can afford to hire an attorney if I have to."

Whether Reyes has really issued any such instructions is uncertain. In response to a request for an interview, Reyes told the Dallas Observer to put all questions in writing, and then she abruptly hung up the telephone. Days later, Marcos Ronquillo, a lawyer and a former Chamber chairman, sent the Observer a one-page response on her behalf in which he stated that Reyes would not grant an interview because of "pending claims and or threatened litigation."

(Ronquillo didn't specify what legal threats he meant, though one former Chamber employee, Sandy Garza, recently notified Reyes that she may sue the Chamber after she was fired from her new job as the Chamber's liaison with the city of Dallas. Garza, whose salary was paid by the city under a one-year contract, contends the Chamber owes her $29,000 in lost wages as part of an oral contract between her and the Chamber.)

Unlike Reyes, Callejo spoke at length about the Chamber during a recent telephone interview in which she denied that she has threatened Moreno or any of the other board members who have resigned from the Chamber. Callejo did, however, say she is highly offended that Moreno and others are publicly complaining about the Chamber's inner workings and, specifically, Reyes' hiring as its president. In short, Callejo says, they don't have the right.

"For starters, let me say this: They're no longer board members. If they wanted to contest this, there was a time when they could have done it," Callejo says. "For them to be doing this now, I think it's reprehensible. They're really acts of very bad faith toward a person [Reyes] who does not deserve it. And not only that, but I think it's reprehensible that they would be staining, if you will, the reputation of one of our greatest institutions in our community. I don't think they have the standing to do that."

Callejo also dismisses complaints that the Chamber's bylaws were manipulated to ensure that Reyes got the job. She does, however, confirm that she has helped sponsor Reyes' political return, first by asking Loza to nominate her for the DART board and, later, by suggesting to Jim Richardson Gonzales that Reyes become the Chamber's president, a job that came open earlier this summer when Frank Cortez left it to become an assistant vice president at DART.

And that, Moreno says, is when all the trouble began.

Moreno, as well as other board members who spoke with the Observer, says she became suspicious of Reyes when she declined to disclose her Social Security number for background check purposes to the selection committee, which was headed by Gonzales and two other board members. (When she applied for the DART position, the application shows Reyes also ignored a city requirement that she disclose her Social Security number for background check purposes.)

"That bothered me," Moreno says. "I wondered what was she trying to hide."

When the issue arose, Callejo says that she personally "spoke up" to keep the information private because she believed disclosing it would be an invasion of Reyes' privacy. Instead, Callejo says, the information was given to the Chamber's interim president, Peter Borling, who conducted the background check. Everything about Reyes checked out, Callejo says, and the board members were later told that she had "cleared" the check with glowing colors.

"She had like 18 references of community leaders, past chairs and elected officials," Callejo says. "How can they argue with the kind of support this woman has? How can anybody argue with that?"

Reyes does indeed have an impressive list of references, including business powerhouses like TXU Chairman Erle Nye, attorney Marcos Ronquillo, state Representative Domingo Garcia and five sitting Dallas City Council members. But Moreno was not impressed by all the names. Because the full details of the background check were not disclosed to the board, Moreno says she took it upon herself to conduct her own search into Reyes' past.

What she discovered only made matters worse.

A transplant from New Orleans, Reyes suddenly appeared on the Dallas political scene in 1997 as a candidate for the city council seat then occupied by Chris Luna. The owner of a tiny computer business, Reyes was a surprise because she was a political unknown who, seemingly overnight, had secured the backing of the city's all-powerful white business establishment, led by the likes of TXU's Nye, as well as some traditional Hispanic powers, including Callejo.

Looking back on the race, Callejo recalls how stunned she was when John Loza, who had lost an earlier election against Luna, tossed his hat in the ring at the last minute.

"When John ran the first time against Chris Luna, I went to him and told him I could not support him because I was committed to Chris Luna. I said to him, 'Look, we have such a small pool of candidates.' I said, 'When Chris steps down, if you decide to run, you call me and I will support you,'" Callejo says. "Then the next election came about. Nobody was saying they were going to run. Some of us had to practically twist Brenda's arm to get her to run."

When Loza announced his campaign he did not call Callejo. Shocked, Callejo says she called Loza.

"I told John, I said, 'Why didn't you call me? You remember my conversation with you?'" Callejo says, adding, "If we had known John was going to run, Brenda would not have run."

Reyes' campaign, which outspent Loza's grassroots effort by a 3-to-1 margin, began to implode when Reyes failed to answer questions about whether she was, as city rules require, a legal resident of District 2. As the Observer reported, the Deep Ellum apartment Reyes claimed she was living in hadn't been built in time for her to meet the residency requirements. (Indeed, the out-of-district house Reyes appeared to be living in then is the same place she calls home today.)

The controversy grew when the company Reyes owned, Innovative Computer Group, abruptly appeared on the city council's agenda for approval as the recipient of a $1.2 million contract to install and maintain a computer system for the city's building inspection department. The contract, which was awarded to Reyes after the election, was a problem at the time because city council members are prohibited from doing business with the city. Meanwhile, the council race began to resemble an episode of COPS, complete with police officers sorting out fights between opposing campaign workers who had resorted to attacking each other with yard signs and pepper spray.

By the time it was over, both Loza and Reyes would be the subject of criminal inquiries involving complaints that they misrepresented their residencies. Nothing came of the investigations, but the election went down as one of the most contentious and, to some, potentially promising local council races in recent memory: For the first time, an outsider had beaten the candidate handpicked by the city's power elite. In other words, Loza's win was viewed as a signal that the city's traditional powers, both Anglo and Hispanic, might be giving way to a new independent generation.

Perhaps that's why a round of snickers went up late last year when Loza nominated Reyes for the DART board during a meeting of the city's transportation committee. "We were all just smiling at the fact that he gave her a ringing endorsement after that brutal campaign," recalls former councilwoman Donna Blumer.

Loza, however, says there's no political significance to his newfound alliance with Reyes or, for that matter, Callejo, whom he says he made "amends" with long ago. Although he confirms that Callejo did "approach" him to discuss Reyes for the job, he says he decided to nominate her because she was the right person for the job.

"I was looking for someone who was gonna be aggressive in representing the community, and I was looking for a woman, quite frankly," Loza says. "I know she's had experience dealing with government entities before from the perspective of the small-business owner, so I thought that experience would be good when she's advocating for Hispanic businesses on the DART board."

Reyes does indeed have business experience with government entities, most notably the city of Dallas. However, when Loza brought Reyes' name for the DART position to the full city council for approval in December, he didn't mention that Reyes had sued the city in 1998 after city staff terminated her from the contract she had been awarded shortly after her failed 1997 council race. In fact, a year earlier, the same city council approved a settlement agreement in which the city paid Reyes $35,000.

In hindsight, one can only guess whether the council would have supported Reyes for the DART position had they known the details of the litigation. A year after buying a new computer system from Reyes' company, city staff pinpointed 21 problems that prevented the system from working properly, including the failure of Reyes' employees, which included her husband at the time, from properly solving the problems they were encountering with the system, according to documents filed in the lawsuit. On September 22, 1998, the city formally kicked Reyes off the job, informing her that she failed to fix the problems and the system was in "perpetual default."

Shortly thereafter, Reyes sued, claiming that city employees failed to properly terminate the five-year contract. In addition, Reyes blamed the problems on the city's failure to buy, from her, a more expensive customized computer system. She also argued that "personality differences" between her employees and those of the city soured the deal.

Because the settlement check was so small, it's unlikely that the city council was even briefed on the matter. For his part, Loza says he didn't think the lawsuit was enough of a problem to disqualify Reyes from representing the city's interests at DART. The failed venture, however, may have taken a fatal toll on Reyes' company. In her original petition, Reyes' lawyers argued the termination caused her company to reach a "breaking point."

Around the time Reyes got her settlement money, her business debts began to pile up, including more than $150,000 in unpaid promissory notes. In November 2000, Reyes filed for bankruptcy. Although it's unclear how or if Reyes resolved her debt, the case was dismissed after Reyes suddenly stopped pursuing it in December, right around the time the she accepted the DART position.

Apparently, Reyes wanted the city council members to believe her company was alive and well: On her application for the DART position, Reyes listed her current job as president and CEO of Innovative Computer Group. Two months earlier, however, the company was officially dissolved by the Texas Secretary of State's Office, which had forfeited the company's charter because Reyes failed to pay the required state taxes.

The timing of Reyes' appointment to DART was particularly important for Hispanic businesses. In February, DART entered into a "memorandum of understanding" with the Chamber to increase the number of Hispanic vendors on the receiving end of the roughly estimated $166 million in public funds slated to go to minority vendors as part of the agency's upcoming northern rail expansions, among other projects. (The transit agency signed similar agreements with the city's other ethnic business chambers.)

Indeed, Loza says he expects Reyes to actively monitor the bidding process to ensure that Hispanics get their fair slice of DART's pie.

"One thing I had heard was that the Hispanic community in particular wasn't being aggressively represented on the board to the extent it could be, and I wanted to make sure I picked somebody who would correct that," Loza says.

DART is just one of several government entities, which include the Dallas Independent School District, the city of Dallas and various state agencies, that turn to the Chamber in search of Hispanic vendors to help meet their goals for increasing the number of minorities who receive government contracts. In turn, the Chamber's employees are assigned the task of helping young entrepreneurs learn how to compete for these contracts and, once they are awarded, assist them to ensure that they successfully perform.

Today, critics point to Reyes' failed city venture as a prime example of why they don't think she's qualified to run the Chamber.

"How can she tell me this is how I recommend you go about your business when she's a complete failure?" Moreno says. "What kind of message are we sending to our general membership? It's OK not to pay our bills?"

A vivacious 29-year-old, Moreno says she got involved with the Chamber three and half years ago because, from her vantage point in Oak Cliff, she saw too many small, Spanish-speaking business owners who need an organization like the Chamber to guide them through government bureaucracies, complete with their often-confusing permitting requirements, and into a promising American marketplace.

Back then, Moreno says she viewed the Chamber and its figureheads as heroes. Especially Callejo, a woman whom Moreno recalls watching with admiration back in the 1980s, when she successfully fought to increase Hispanic representation on the Dallas City Council and argued for amnesty programs that eased the citizenship process for immigrating Latinos.

"At one point, I admired Adelfa. I thought, how wonderful it is to have a Hispanic woman who is outspoken and there to represent the community," Moreno says. When she got to the Chamber and found herself seated next to Callejo, Moreno says, "I thought I was looking at a role model. I wanted to be Adelfa."

When she speaks of Callejo nowadays, Moreno's words ring with bitterness. In hindsight, Moreno believes it wasn't Reyes' qualifications that got her the Chamber job, but her political alignment with Callejo.

"I am extremely disappointed that Ms. Callejo supports people blindly because they are Hispanic," Moreno says, adding, "Brenda was rammed down our throats by Adelfa Callejo. She wants to keep the old regime in that Chamber. Adelfa does not want to let go."

Moreno's freewheeling opinionating is just the thing that causes some of her old colleagues on the Chamber board to cringe. That's not because they didn't have problems with the way in which Reyes was hired. Rather, they are concerned that news about the division in the Chamber, particularly if reported by the Anglo press, will cast the Hispanic community in bad light.

Reached several days after he resigned, former chairman Gonzales confirms that he grew uncomfortable when Callejo personally presented Reyes' résumé to him for consideration early in the hiring process. Worse, Gonzales says he was disappointed to learn that a small fraction on the board hired Reyes in June while he was out of town on a business trip. At the time, Gonzales, who headed the search committee, says a job offer had not been formally extended because the committee members had not finished researching the candidates' backgrounds.

"We wanted background checks on everything. I wanted to show that we could stand by the person who would ultimately be selected," Gonzales says. "In my absence, the offer was made, sealed and delivered."

Callejo confirms that the board's "executive committee" offered Reyes the job while Gonzales was away, but says that he had previously signed off on a new rule that gave the committee the authority to make the decision. Even if Gonzales had been in town, she adds, his presence wouldn't have made a difference because Reyes had already won over a majority of the vote.

"Maybe some of the board members that are dissatisfied, maybe they weren't paying close attention. By then, we'd already made the decision," Callejo says, adding, "I don't know what their problem is. It was explained to them that they had agreed to this."

But Reyes' hiring was not what Gonzales says prompted him to leave. Instead, he says he opposed subsequent changes in the Chamber's bylaws that now require future board members to have owned a business for five years or, if they fill one of the board's corporate posts, that they hold executive-level positions at their respective companies. To Gonzales, the new rules were self-serving on the part of some board members who want to control the board.

"Some people on that board really may not have the interests of the Chamber at heart. Personally, now in hindsight, there's a lot of people that look at it as, I dunno, a social club," Gonzales says. "Certainly the idea of controlling the board is uppermost in some people's minds."

Consistent with his resignation letter, Gonzales declines to name any names because he says the more troubling issue is the long-term consequences of the new requirements.

"It means a lot of our bright young entrepreneurs won't have a chance to run," says Gonzales, who is a director of business relations for Verizon, the wireless phone company. "Having been in the business community for 30 years, no one's gonna prove to me that a person who has been in business five years is more adept at making decisions than a bright young kid who can develop into a leader in our community, even after two or three years of owning a business. We have to be aware that there's young kids out there who are very bright."

As Reyes settled into her new job, Gonzales says he decided it was in everyone's best interest if he simply stepped aside and let her, along with her supporters on the board, pick up the broken pieces inside the Chamber.

He's not the only one. Robert Enriquez says he resigned primarily because, having served with Reyes on another voluntary board, he didn't believe he could effectively work with her. In addition, he says he felt deceived by board politics.

"I felt it was a slam dunk to get her in there," Enriquez says. "I think it was set up so she would be the only candidate."

When he recently answered his telephone, Enriquez let out a groan at the prospect that the trouble inside the Chamber had attracted the attention of a reporter, particularly an Anglo one.

"I hate to see stories from particular groups in the community, African-Americans or Hispanics, that make us look like there's a lot of infighting going on," he says. "At this point in our community, we don't need that."

Enriquez says he is concerned that the power battle inside the Chamber will only hinder its broader effort to assist Hispanics grow strong businesses that are not dependent on government contracts.

"Here's the thing, they [the Chamber's remaining board members] feel they're doing the right thing. That's what I regret about the whole thing. They don't recognize that that's the wrong way to do things. They think they're at war with other segments of the community," Enriquez says, referring to Anglos and African-Americans. "They feel they need somebody tough in there so we get our piece of the pie. Well, that's stupid. This community needs to come together."

The rest of Dallas can only wait and see whether Reyes can succeed in uniting the fractured organization she's now in charge of running. At the moment, her chances don't sound good. Like Enriquez, one of Loza's longtime political strategists, who four years ago eagerly leaked dirt about Reyes to the city's political reporters, let out a groan answering the telephone inquiry about her new job at the Chamber.

"Brenda's on our team now," the strategist says, adding, "Why don't you go pick on some white guy?"

Meanwhile, Callejo bristles at Moreno's complaint that she wields too much influence over the Chamber, as well as her suggestion that the time has arrived for new faces to take over the reins of leadership in the Hispanic community.

"Isn't that a bright comment?" Callejo says. "That's like saying to someone who has power and money, 'We don't want your power, and we don't want your money.' Now, is that smart?"

Callejo says she is so "militant" about her activism on behalf of Hispanics because she can still recall how there were only three Mexican-American teachers in the Dallas school district when she first got involved in Dallas politics in the early 1960s.

"All that I have done is try to get Hispanics to get their equitable portion of contracts and employment. I have been an advocate for my community and not for myself. I am who I am not because of the establishment, but in spite of it," she says, adding, "and I don't owe anybody anything, either."

When asked what she would say to anybody who says it's time for her to leave the Chamber for good, Callejo grows silent, but only for a brief moment.

"I would say they have a lot to learn."


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