HUMBOLDT PARK — As news settles that the city's two Puerto Rican Day parades will merge, infighting among the downtown parade's organizers threatens to bring some unwanted drama to the new combined parade in Humboldt Park.
The Puerto Rican Parade Committee of Chicago, formed in 1964, oversaw the downtown Puerto Rican Day Parade since it debuted in 1965, and will continue to help run the Puerto Rican People's Parade in Humboldt Park, now that the two have merged.
But a lawsuit filed Oct. 31 by 10 members and former officers of the committee alleges financial and managerial misconduct by current president Angel Medina, vice president Jose Betancourt and former president Miguel Sanchez.
The suit claims Medina's term as president was supposed to end in September 2012 and that he and Betancourt refused to hold elections, as the committee had done every two years since it was was created.
It goes on to allege that Medina took out several loans from his wife for committee use but failed to report how the money was spent. The suit also claims the loans are being repaid at "an unreasonably high rate of interest."
But Medina was not the only person to get the committee into financial trouble, according to the suit.
Former president Miguel Sanchez — who served from 2004 to 2008 — mortgaged the committee's Casa Puertorriquena social hall at California and Division three times to secure loans totaling $600,000 "outside of his authority and in violation of his fiduciary duties" to the committee, according to the suit, which also alleges those loans are in default.
The suit seeks a court order to force the defendants to hold elections, account for the committee's finances and pay back any money that cannot be accounted for.
Medina and Betancourt did not return emails seeking comment Thursday, and a woman who answered committee's phone referred questions to its lawyer. Sanchez also could not be reached for comment Thursday.
The committee's lawyer, Edgar Vega, acknowledged the committee has some financial problems, but emphasized it is working on fixing them.
"The people there are all volunteers and they're trying to fix the mess that they're inherited, pay the bills and everything," he said.
He added that holding elections every two years contributed to the group's financial woes.
"To reinvent the wheel every two years is an accounting nightmare," he said.
He also claimed the committee has no "members" as defined by the lawsuit, and that the suit's plaintiffs have no claim on the organization just because they once served as officers.
"They're just these old men that don't have jobs," he said. "They just sit around and cry about how things are being done."
The plaintiff's lawyer, Peter Bustamente, however, said the committee's current officers are "acting like little dictators" by not holding elections and failing to be financially transparent.
"We believe they are overreaching and acting outside of their authority," he said. "They refuse to provide us with any information" about future parade plans.
Bustamente said the committee also failed to properly file annual reports with the Attorney General's Office as is legally required by tax-exempt charitable organizations, something Vega denied.
A spokeswoman for the Attorney General's Office, Natalie Bauer, however, confirmed the committee's registration as a charitable organization was canceled in September 2010 because it did not file a complete 2009 report.
She said the attorney general's Office is working with the committee to reregister and get back in compliance but is still waiting for some records from the committee.
A status hearing for the lawsuit is scheduled for April 12.
Vega has filed a motion to dismiss the case.