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DC trans group files for bankruptcy

T.H.E. seeks Chapter 11 protection; reports $566,000 in debt

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Earline Budd, T.H.E., Transgender Health Empowerment, gay news, Washington Blade
Earline Budd, gay news, gay politics dc

Transgender activist and one of DC trans group T.H.E.’s founders, Earline Budd, is owed $4,615 in back wages. (Washington Blade file photo by Michael Key)

Transgender Health Empowerment, which has been recognized as D.C.’s preeminent organization advocating for and providing services to the transgender community since 2004, filed for Chapter 11 bankruptcy on July 7.

The 56-page bankruptcy filing came two months after the D.C. government revoked or suspended most of its contracts and grants for T.H.E. Ā The cut off in funds came after D.C. officials learned the IRS filed tax liens against the group seeking to recover more than $260,000 in unpaid payroll taxes, possibly including penalties,Ā that accumulated since 2008.

D.C. Mayor Vincent Gray, who praised T.H.E.’s work on behalf of the LGBT community, said the city was forced to withdraw its funding for the group under a ā€œclean handsā€ policy that bars city funding for vendors and service providers found to be in violation of the law, including federal and local tax laws.

LGBT activists familiar with the group have said it ceased most of its operations and laid off nearly all of its employees at the time the city cut off its funding for the group.

T.H.E.’s bankruptcy filing with the United States Bankruptcy Court for the District of Columbia shows it has total remaining assets of $37,009 and liabilities totaling $566,544.26.

The filing identifies the IRS as the single largest creditor, showing the group owes $264,247.91 in employeeĀ federal payroll taxes between 2008 and 2013. The filing shows T.H.E. owes the D.C. government $22,485 in employee withholding taxes and $15,663 in D.C. ā€œunemploymentā€ taxes.

The group owes the State of Maryland $8,695 in ā€œemployment taxes/withholdingā€ for 2012 and 2013, according to the bankruptcy filing.

Under the U.S. bankruptcy law, a Chapter 11 filing allows a business or organization to obtain temporary relief from paying its creditors while it reorganizes its corporate structure and works out a plan with creditors to eventually repay the debt.

Records filed with the bankruptcy court show that a meeting of creditors is scheduled to take place at the court, located at 333 Constitution Ave., N.W., at 3 p.m. on Aug. 8.

In a press release issued on Wednesday, T.H.E. discussed its financial problems for the first time since news of its money problems surfaced earlier this year.

ā€œTransgender Health Empowerment (T.H.E.), a non-profit group that has provided a wide range of services for D.C.’s TGLB (Transgender, Gay, Lesbian and Bisexual) HIV+ and homeless community since 2004 has been struggling with financial challenges that have prompted us to curtail some services and suspend others,ā€ the press release says.

ā€œCommunicating with our community and clients is of utmost importance to the Board of Directors, along with overseeing solid organization recovery,ā€ it says.

The release, however, makes no mention of the bankruptcy filing, saying only, ā€œOur renewed goal is to protect the organization financially to ensure that programs and services that are being provided have adequate support and to ensure that the actions of those we entrust adhere to the policies and direction set by the Board of Directors.ā€

Although T.H.E. has not published the names of its board members since its website was shut down earlier this year, the bankruptcy filing identifies 11 people as current board members. Among those identified as board members in the filing is D.C. Council member Jim Graham (D-Ward 1).

However, Graham told the Blade on Tuesday that he is not now and has never been a T.H.E. board member. Instead, Graham said he has served on a T.H.E. advisory committee.

The filing identifies Rhonda Steward as interim chair of the board, Marjorie Borders as secretary and Rodney Pierce as treasurer. Gay Democratic activist Bradley Lewis is listed as a member of the board.

The T.H.E. press release, which appears to have been issued by the board, doesn’t mention the role the group’s executive director for over five years, Anthony Hall, will play in the reorganization.

Hall and other T.H.E. officials have declined to respond to requests by the Blade since May for an explanation of the root causes of the organization’s financial problems.

A document obtained by the Blade from the D.C. Department of Health through a Freedom of Information Act request, says the DOH decided in early May to discontinue its funding for T.H.E. after learning that the IRS had filed tax liens against the group and its financial prospects were grim.

The April 24 document, identified as a Programmatic Site Visit Report, says Hall told DOH officials during their visit to T.H.E.’s headquarters at 3339 10th Place, S.E., that much of the group’s financial problems stemmed from outstanding debts with the IRS and D.C. and Maryland tax offices related to unpaid payroll withholding taxes.

ā€œThis, he mentioned, was the result of incorrect filings of successive accountants,ā€ the DOH report says. ā€œHe has since contracted with Wells Fargo Bank to manage the organization’s payroll and remit all withholdings and related tax obligations.ā€

But according to the report, ā€œT.H.E. has no cash on hand and does not appear to have a realistic chance of working out a resolution with the IRS…Many of their staff has already been laid off and a limited few are volunteering to perform limited duties,ā€ it says.

ā€œTheir clients are already impacted and have limited or no servicers…In all practicality, T.H.E. has already shut their doors and cannot even be paid were they to invoice further.ā€

The report recommended that all DOH sub-grants ā€œbe suspended immediately and appropriate providers identified to provide the services.ā€

Among the other creditors listed in the bankruptcy filing are 23 mostly former employees who are owed back wages ranging from between $3,000 and just over $5,000. Included among them are longtime transgender activist and one of T.H.E.’s founders, Earline Budd, who is owed $4,615 in back wages. Gay activist Brian Watson, who has served as a T.H.E. program officer, is owed $5,653, according to the bankruptcy filing.

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District of Columbia

Capital Pride wins $900,000 D.C. grant to support WorldPride

Funds not impacted by $1 billion budget cut looming over city

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ā€˜Visitors from around the world come toĀ D.C. toĀ experience ourĀ world-classĀ festivals and events,’ said MayorĀ Muriel Bowser. (Washington Blade file photo by Michael Key)

Capital Pride Alliance, the nonprofit D.C. group organizing WorldPride 2025, this week received a $900,000 grant from the city to help support the multiple events set to take place in D.C. May 17-June 8.

According to an announcement by D.C. Mayor Muriel Bowser and Events D.C., the city’s official convention, sports, and events authority, Capital Pride Alliance was one of 11 nonprofit groups organizing 2025 D.C. events to receive grants totaling $3.5 million.

The announcement says the grants are from the city’s Large Event Grant Program, which is managed by Events D.C. It says the grant program is funded by the Office of the D.C. Deputy Mayor for Planning and Economic Development through a grant from the U.S. Department of Commerce Economic Development Administration.

Nina Albert, the Deputy Mayor for Planning and Economic Development, told the Washington Blade that because the grants consist of federal funds already disbursed to the city, they are not impacted by the billion dollar budget cut imposed on the city by Congress earlier this year.

ā€œWorldPride is one of the 11 grantees, and we’re really just excited that there’s going to be generated a large crowd and introducing the city to a national and international audience,ā€ Albert said. ā€œAnd we think it is going to be a real positive opportunity.ā€

The statement from the mayor’s office announcing the grants says funds from the grants can be used to support expenses associated with hosting large events such as venue rental fees, security, labor costs, equipment and other infrastructure costs.

ā€œAll of those things are things that we do for our major events, including WorldPride,ā€ said Ryan Bos, executive director of Capital Pride Alliance. ā€œSo, the resources from this grant will be extremely helpful as we approach the final weeks of preparation of WorldPride Washington, D.C.,ā€ he said.

Bos said Events D.C. has been an important partner in helping to promote WorldPride 2025 since the planning began more than two years ago. ā€œAnd we’re excited to have them now support us financially to get us over the finish line and have an amazing event.ā€

Both Bos and Deputy Mayor Albert said WorldPride organizers and D.C. government officials were doing all they can to inform potential visitors from abroad and other parts of the U.S. that the local D.C. government that is hosting WorldPride is highly supportive of the LGBTQ community.

The two said WorldPride organizers and the city are pointing out to potential visitors that the local D.C. government is separate from the Trump administration and members of Congress that have put in place or advocated for policies harmful to the LGBTQ community.

ā€œD.C. is more than the federal city,ā€ Bos told the Blade. ā€œIt’s more than the White House, more than the Capitol,ā€ he said. ā€œWe have a vibrant, progressive, inclusive community with many neighborhoods and a great culture.ā€

Marcus Allen, an official with Broccoli City, Inc., the group that organizes D.C.’s annual Broccoli City Music Festival, reached out to the Blade to point out that Broccoli City was among the 11 events, along with WorldPride, to receive a D.C. Large Event Grant of $250,000.

Allen said the Broccoli City Festival, which includes performances by musicians and performing artists of interest to African Americans and people of color, is attended by large numbers of LGBTQ people. This year’s festival will be held Aug. 8-10, with its main event taking place at Washington Nationals Stadium.

“Visitors from around the world come to D.C. to experience our world-class festivals and events,” Mayor Bowser said in the grants announcement statement. “These grants help bring that experience to life, with the music, the food, and the spirit of our neighborhoods,” she said. “Together with Events D.C., we’re creating jobs, supporting local talent, and showcasing the vibrancy of our city.” 

The full list of organizations receiving this year’s Large Event grants are:

• Restaurant Association of Metropolitan Washington

• National Cherry Blossom Festival, Inc.

• Asia Heritage Foundation

• Capital Pride Alliance

• U.S. Soccer Federation

• Broccoli City, Inc.

• U.S.A. Rugby Football Union

• Washington Tennis and Education Foundation

• D.C. Jazz Festival

• Woolly Mammoth Theatre Company

• Fiesta D.C., Inc.  

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District of Columbia

Two charged with assaulting, robbing gay man at D.C. CVS store

Incident occurred after suspects, victim ā€˜exchanged words’ at bar

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D.C. police just after 1 a.m. on April 10 arrested two men for allegedly assaulting and robbing a gay man inside a CVS store at 1418 P St., N.W., according to a police report and charging documents filed in D.C. Superior Court.

The charging documents state that the alleged assault and robbery occurred a short time after the three men ā€œexchanged wordsā€ at the gay bar Number 9, which is located across the street from the CVS.

The arrested men are identified in the charging documents as Marquel Jose Diaz, 27, of Northwest D.C., and Lorenzo Jesse Scafidi, 21, of Elizabeth City, N.C. An affidavit in support of the arrest for Diaz says Diaz and the victim ā€œwere previously in a relationship for a year.ā€

Court records show Diaz was charged with Simple Assault, Theft Second Degree, and Possession of a Controlled Substance. The court records show the controlled substance charge was filed by police after Diaz was found to be in possession of a powdered substance that tested positive for cocaine.

Scafidi was charged with Simple Assault and Theft Second Degree, the court records show.

The D.C. police report for the incident does not list it as a suspected hate crime. 

The court records show both men pleaded not guilty to the charges against them at a Superior Court arraignment on the day of their arrest on April 10. The records show they were released by a judge while awaiting trial with an order that they ā€œstay awayā€ from the victim. They are scheduled to return to court for a status hearing on May 21.

The separate police-filed affidavits in support of the arrests of both Diaz and Scafidi each state that the two men and the victim ā€œexchanged wordsā€ inside the Number 9 bar. The two documents state that both men then entered the CVS store after the victim went to the store a short time earlier.

Scafidi ā€œcame into the CVS shortly after and entered the candy aisle and slammed Complainant 1 [the victim] to the ground causing Complainant 1’s phone to fall out of CP-1’s pocket,ā€ one of the two affidavits says. It says Scafidi ā€œagain picked up CP-1 and slammed him to the ground.ā€

The affidavit in support of Diaz’s arrest says Diaz also followed the victim to the CVS store after words were exchanged at the bar. It says that after Scafidi allegedly knocked the victim down in the candy aisle Diaz picked up the victim’s phone, ā€œswung onā€ the victim ā€œwhile he was still on the ground,ā€ and picked up the victim’s watch before he and Scafidi fled the scene.

Without saying why, the two arrest affidavits say Diaz and Scafidi returned to the scene and were arrested by police after the victim and at least one witness identified them as having assaulted and robbed the victim.

Attorneys representing the two arrested men did not respond to phone messages from the Washington Blade seeking comment and asking whether their clients dispute the allegations against them.

The victim also did not respond to attempts by the Blade to obtain a comment from him. The police report says the victim is a resident of Fairfax, Va.

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District of Columbia

Bowser calls for ā€˜extraordinary’ response to reduction in D.C. budget

Impact on city funding for LGBTQ programs and grants unclear

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Mayor Muriel Bowser warned of ā€˜significant cuts in District Government services.’ (Screen capture via Forbes Breaking News YouTube)

D.C. Mayor Muriel Bowser on April 15 issued an executive order calling for ā€œextraordinary actions,ā€ including ā€œsignificant cuts in District Government services,ā€ to address a decision by Congress to cut the city’s current budget by $1.1 billion.

The nine-page executive order points out that these actions became necessary after the U.S. House of Representatives has so far declined to vote on a free-standing bill approved by the U.S. Senate last month that would restore the $1.1 billion D.C. budget cut initially approved by the House.

In addition to large-scale cuts in city services, the mayoral order says the congressionally imposed city budget cut will bring about city ā€œhiring freezes, financial impacts to employees, reductions and terminations in contracts and grants, and closures of District Government facilities.ā€

The order adds, ā€œThese are unprecedented actions given that the District itself adopted and is able to implement a fully balanced budget, but they are necessary due to the Congressional cut to the District’s budget and its inaction in timely fixing its legislative error.ā€

The House adjourned this week on a recess until the end of April, and congressional observers say it is unclear whether the majority Republican House will take up the Senate bill to undo the D.C. budget cut when the House returns from its recess. President Donald Trump has called on the House to approve the bill to restore the full D.C. budget.

Among the D.C. LGBTQ organizations and those providing services to the LGBTQ community that receive D.C. government funding and that could be impacted by the budget cuts are Capital Pride Alliance, which is organizing WorldPride 2025 set to take place in D.C. next month; and Whitman-Walker Health, one of the city’s largest private healthcare organizations that provides medical services for LGBTQ clients.

Also receiving city funding are the Wanda Alston Foundation, which provides housing services for LGBTQ people; and the LGBTQ youth advocacy and services organization SMYAL.

Spokespersons for the four organizations couldn’t immediately be reached to determine if they knew whether the soon-to-be implemented budget cuts would have an impact on the city funding they currently receive.

In response to questions from news reporters during an April 15 press conference call to discuss the Bowser executive order, Jenny Reed, director of the D.C. Office of Budget and Performance Management, said details on specific programs or funding allocations set to be cut would not be known until the mayor submits to the D.C. Council her Supplemental FY 2025 budget along with her proposed FY 2026 budget.

Reed was joined at the press briefing by Lindsey Parker, Mayor Bowser’s chief of staff; and Tomas Talamante, director of the Office of Intergovernmental Affairs.

They and other city officials have said the impact of the congressionally imposed city budget cut was expected to be lessened but remain highly problematic by Bowser’s decision to invoke a 2009 law that allows the city to increase its own spending without approval by Congress under certain circumstances.

The mayor has said under that law, the city would need to cut its FY 2025 budget by $410 million rather than by $1.1 billion. It couldn’t immediately be determined whether House Republicans, who initiated the requirement that the D.C. budget be cut by $1.1 billion, would challenge the mayor’s plan to invoke the 2009 law to reduce the size of the budget cut.

ā€œWithout the ability to fully execute the Fiscal Year 2025 budget as adopted and approved by the District, this gap will force reductions in critical services provided by our largest agencies, including the Metropolitan Police Department and the Fire and Emergency Medical Services Department,ā€ the mayor’s executive order states.

ā€œThe District will continue to work with members of the House of Representatives to urge them to vote to fully restore the District’s Fiscal year 2025 budget and will continue to work with President Trump to strongly encourage the House of Representatives to take that action,ā€ the order says.

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