Investigation and Charges Surround El Paso Nonprofit

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May 29, 2012; Source: El Paso Times

Marty Schladen’s impressively detailed story about a consultant evaluator paid for by Aliviane, a nonprofit drug treatment and family-counseling group, is one that begs for follow-up. The nonprofit Aliviane is required by federal rules, according to Schladen’s piece, to hire outside evaluators to assess its work. Aliviane’s two outside evaluators, S. Fernando Rodriguez and Gustavo Martinez, have reportedly never found anything really wrong with the organization. It has been a comfortable consulting gig for Martinez, a former executive director of the El Paso Housing Authority and of Life Management, the county’s mental health authority. Aliviane has paid him more than $1 million between 2001 and 2010 for the reports he delivered, the El Paso Times reports.

Somehow, evaluators missed the organizational practices that led Aliviane’s CEO, Cirilo “Chilo” Madrid, to resign after an 11-count indictment this past December on charges of conspiracy, theft, and embezzlement, including allegations of bribing a county judge to get a contract for a firm called LKG Enterprises to evaluate another local nonprofit. Madrid has said that he got a $100,000 subcontract from LKG’s owner, Ruben “Sonny” Garcia, out of LKG’s $600,000 total contract, for which he produced a 20-page report, partially plagiarized from the Internet. Madrid and Garcia go way back because, according to the El Paso Times, Aliviane paid LKG and another Garcia-owned firm $680,000 in evaluation services between 2001 and 2008.

Martinez’s co-evaluator, Rodriguez, who is the former head of the criminal justice program at the University of Texas at El Paso (UTEP), is himself now under federal investigation, according to an FBI spokeswoman, and has been suspended by UTEP for allegedly not reporting his $1.2 million in outside income from Aliviane.

As for Martinez, the state has pulled his social worker’s license, which Aliviane says is no big deal because Martinez was being used as an evaluator, not a social worker. However, his alleged violation of the social work rules is related to “unethical conduct and (the part of the administrative code) regarding professional boundaries.” Martinez left previous jobs “quickly and amid questions,” according to Schladen’s article. After leaving his post as executive director at a county mental health agency, the state took over the agency due to charges of mismanagement. Next, as executive director of the El Paso Housing Authority, Martinez allegedly fired a whistleblower; the board decided to buy out Martinez’s contract and tell him goodbye.

If Martinez was a bad player or simply a little blind to alleged problems at Aliviane, the ongoing federal investigation will presumably figure it out. But we continually find circumstances that suggest that the oversight or lack of oversight of the government agencies involved plays a role in these little episodes. Schladen’s article notes, “A spokesman for the U.S. Substance Abuse and Mental Health Services Administration didn’t respond last week when asked whether Aliviane’s payments for evaluation services were abnormally high.” Indeed, when a nonprofit is paying out those kinds of fees to an evaluator who left “quickly and amid questions” at his last two high-profile jobs, the oversight agency might want to take a second look.

Speaking of second looks, we would love to see Schladen expand the Aliviane/Madrid/Martinez/Rodriguez story to add a focus on what federal and state oversight agencies should be doing in such situations—and whether they were doing so in this situation or not.—Rick Cohen

  • Elizabeth Castillo

    Evaluators and the government are not the only people responsible for accountability and oversight. The Board of Directors also plays a vital role in these functions. Aliviane’s 2011 annual report states “The Board of Directors is responsible for establishing the overall mission of the organization and evaluating the Chief Executive Officer’s ability to carry out the mission and goals of Aliviane’s programs ” (pg. 4). It’s telling that legal and fiduciary duties of the board are not mentioned.

    Cases like this are text book examples of how important an engaged and knowledgeable board is. Resources like Board Source ( and the Governance Symposium at the University of San Diego (my organization,, are valuable tools for developing boards so they have the skills and knowledge needed to promote organizational accountability and compliance.