The president of a financially struggling nonprofit Baltimore AIDS clinic has resigned.
Leonardo R. Ortega, whose tenure as CEO of Health Education Resource Organization Inc. lasted more than two decades and included allegations of financial improprieties, submitted his resignation to the board of directors Thursday, according to Robert A. Ferguson, development director for HERO.
Ortega could not be reached for comment.
"He's served the agency for a long time, and the decision between himself and the board was mutual that it was time for him to move on," Ferguson said. Ortega "created a good foundation that we'll be able to build a good future on."
Susan Ahlstrom, chief operating officer, will serve as interim CEO while a nationwide search for a replacement is conducted. Ortega earned $130,000 annually, according to the organization's tax filing in 2005.
HERO, which assists more than 3,000 clients each year, plans to honor Ortega during its annual World AIDS Day observance. For the past 20 years, the organization has sponsored HERO AIDSWALK Maryland, which has raised more than $4 million.
HERO, which has provided medical care, legal help and counseling to clients with HIV and AIDS since 1983, has struggled in recent years to rebound from allegations of financial wrongdoing. The organization fired its deputy director in 2004 after she accused Ortega of misusing agency funds. Ortega denied any wrongdoing.
Amid the allegations, eight board members left, six employees were laid off and a statewide association of nonprofit organizations rebuked the clinic for questionable accounting practices.
State auditors, however, found that Maryland AIDS Administration grant money was properly spent. City officials, who also did a review, decided to continue funding HERO programs. The FBI launched an investigation, but ultimately, no charges were filed.
"[Ortega] felt it was time to move on and we agreed with him," said Sara Smalley, a member of the board and former board president. "Everything was amicable. He had done good work, but it was just time to move on and get some fresh blood in there. ... Hopefully it will help to change any negative perception that may be in the community."
HERO's total revenue was $3.1 million for the fiscal year ending June 30, 2006, according to its 2005 federal Form 990 tax filing. Contributions came from a variety of groups, including large sums from Baltimore Homeless Services, Associated Black Charities, the Centers for Disease Control and Prevention and the Baltimore City Health Department.
Public contributions totaled $149,528, and money raised from AIDSwalk that year was $59,341.
HERO has requested two extensions, the latest of which expired May 15, for filing its 2006 tax-exempt Form 990 with the state, which is required by law, according to Jason Waskey, a spokesman for the office of the Maryland secretary of state.
An Aug. 6 letter from Richard A. Morris, director of the Charities and Legal Services division for Maryland's secretary of state, warns HERO that it has not submitted the required documents and is "not in compliance with Maryland law."
Ferguson confirmed the extensions and said the clinic has not filed the 990 form and other required documents because it is waiting until an independent audit is completed next week.
"It's good to have a set of trained eyes and have a CPA firm go over and look at things before they're officially filed," Ferguson said. "It's not timely, ideally, but it's not horrendously late, either."