The Valley is accustomed to seeing Springfield social services kingpin Heriberto Flores carry out his plans—including plans to buy Springfield’s Paramount Theater and the building that houses the legendary Student Prince/Fort Restaurant, extraordinary purchases for nonprofits—with little apparent opposition.
So it was a bit of a shock to see Flores’ application for a marijuana clinic in Holyoke rejected by the state recently.
It had long been public knowledge that Flores, a former UMass and Holyoke Community College trustee, collected salaries from more than one social service agency. But a state audit of the workings of one of those agencies, the New England Farm Workers Council, prompted the state Department of Public Health in late June to deny the application for his company, Debilitating Medical Condition Treatment Centers, Inc., to open the clinic.
The May audit found that Flores’ combined salaries from NEFWC and a related agency for fiscal years 2010 through 2012 totaled more than $900,000, double the maximum compensation state law allows such human service providers.
Moreover, according to the auditors, there were no time sheets or other documents to prove that Flores had worked enough to merit the fat paychecks.
And Flores had been reimbursed by the state for $32,000 in travel expenses though no other employee received a comparable benefit, auditors found, and his contracts did not include such a benefit.
The management list for the proposed clinic reflects the degree to which the affable Flores—one of the most prominent non-elected figures in Springfield—is connected to power structures in the city. The Secretary of State lists Flores as president and director of the dispensary; as treasurer and director, Mary E. Frey, wife of William Bennett, former Hampden County District Attorney (and brother of city councilor Kateri Walsh), who now serves as Flores’ legal counsel; and as clerk and director, former Republican state representative Brian Lees. (A third director is Samuel J. Mazza, a physician from South Hadley.)
But all that didn’t impress the Department of Public Health, which in its June 27 letter to DMC cited the circular nature of the relationship between DMC, Flores and a local agency, Partners For Community. Flores is CEO of Partners For Community, an umbrella agency with several affiliates that Flores also runs, and that are supported by millions of dollars in public money. The New England Farm Workers Council alone took in $58,400,939 in government grants in FY 2012, most of it from the state.
The plan had been for the dispensary to be administered by Partners For Community, and to pay Partners For Community at least $300,000 a year for the administrative services. But, the DPH pointed out, “Mr. Flores is the Chairman of PFC [Partners for Community] and receives a salary of $232,500 from PFC… Furthermore, PFC is the administrative arm supporting DMC, including for detailed recordkeeping, the same entity that the State Auditor determined had inadequate recordkeeping.”
The audit cited by the Department of Public Health determined that Flores had been paid full-time salaries during fiscal years 2010 through 2012 by two different agencies, the New England Farm Workers’ Council and the Corporation for Public Management (CPM), both of which are affiliated with Partners for Community. The total exceeded the amount Massachusetts allows as reimbursable salary for officers of human service agencies, the audit said; in fact, the total salary collected by Flores from the two organizations over the three years—$907,138—was more than twice as much as the $451,548 the state would allow. (For comparison, the statutory limit for the salary of the governor of Massachusetts is $151,800 a year.)
And, said the auditors, records submitted to the state failed to show how much time Flores actually spent working for the two organizations.
The audit quotes the Farm Workers’ Council’s response: “The CEO’s duties included managing and directing the affairs of both NEFWC and CPM and the other affiliated entities. His responsibilities can be compared to a Superintendent of Schools who supervises many schools at the same time. The CEO’s duties to NEFWC and to CPM are concurrent… His time devoted to each entity cannot be dissected or split apart.”
The auditors replied that the lack of documentation undercut the Farm Workers’ case. And, they pointed out later in the audit, many of the Farm Workers’ problems could be traced back to the fact that two of its five directors were also its managers. In fact, the audit pointed out, the same was true of four of five agencies headed by Flores: the same four people, including Flores himself, served on all four boards, and the maximum number of people on any of those boards was six.
“Therefore,” the auditors concluded, “the NEFWC’s board of directors may have lacked the independence necessary to fully meet its oversight responsibilities.”
In its response, NEFWC agreed to broaden the membership of its board.
It was partly the interrelationships between all those agencies and Partners For Community that were responsible for the Department of Public Health’s lack of confidence in Partner’s For Community’s ability to administer a marijuana clinic. Moreover, said the Department of Public Health, Flores, in his interview with the DPH, “did not take accountability for the audit findings and made statements such as ‘I push the envelope’ and they were on a ‘witch-hunt’ for him.”
“Based in part on Mr. Flores’ own statements in the interview and the audit findings, the Department, in its discretion, has determined that DMC is not responsible or suitable to operate a registered medical marijuana dispensary,” the DPH concluded. However, it wrote, DMC could reapply next year for approval to open a dispensary.
Admired by many for his charisma and talent at forming and energizing organizations, Flores has also long been a controversial figure in Springfield because of his ability to enhance his own economic position at the same time he provides leadership to social service organizations. His real estate development company, Flores Development LLC, has sometimes engaged in deals with the New England Farm Workers Council and another nonprofit agency he leads, Brightwood Development Corp. In 2009, for example, Flores Development sold Brightwood Development the property at 2291-2295 Main Street and took back a mortgage on 2295 Main Street. The mortgage given to Flores’ own company and signed by him as president of Brightwood Development Corp. illustrates the circular nature of transactions between Flores Development and the nonprofits he heads.
“Herbie and my family go back,” said state representative Aaron Vega of Holyoke. “Our dads were active in the early ‘70s in getting the Latino community involved, mostly in Holyoke. Of course, we know that Herbie had a smart business mind and invested early on in properties other people wouldn’t have in Holyoke and in Springfield, and many of those properties have paid off.”
For social services or for Flores? “Both,” Vega said. “Herbie is committed to the community but is also a savvy businessperson. If you’re going to be that, you’re going to be scrutinized in both worlds.”
“He turned New England Farm Workers Council around, and he does some very positive things in the city,” said three-time Springfield City Council president Jose Tosado, who is now running for state representative. “He’s taken some abandoned properties in the city and turned them into affordable housing.”
Stephen Huntley is executive director of Valley Opportunity Council, a large umbrella social service organization based in Chicopee. Huntley told the Advocate he was not prepared to comment on the auditor’s findings related to Flores’ salaries because he was “not sure how his organizations are structured or what his staffing pattern is.” However, said Huntley, “I do know he works hard, and I know he’s an extremely innovative guy when it comes to creating solutions to problems that affect the community.”
At press time the Advocate was unable to reach Flores for comment on the audit, the rejection of DMC’s application to open a dispensary or his agencies’ real estate transactions. But his attorney, William Bennett, said the audit contained statements that were untrue. He added that he and Flores had not yet made any decisions about how to proceed in the face of the state’s rejection of the application for the dispensary, but that they “hope to resolve one problem at a time.”•