CHD, Retaliating, Cuts Off "Poor People's Bank"
May 22, 1997
The U.S. bishops' "antipoverty" agency, the Campaign for Human Development, has reneged on its commitment to fund the MICRO Loan program sponsored by PPEP, Portable Practical Education Preparation, Inc., which helps poor people start small, home-based businesses.
The MICRO program is considered a national model for financing cottage industries. Funded by charities with matching funds provided by the U.S. Treasury's Commercial Development Financial Institution, the program has earned enthusiastic praise from Arizona's congressmen and Sen. John McCain; has been cited in the Congressional Record as one of the most successful programs in the country to help people establish their own businesses and move off welfare; and has received favorable reviews from The ChristianScience Monitor-, among other national publications.
PPEP makes loans ranging from $500 to $2,500 to cottage or home-based businesses, helping families purchase such things as tools or sewing machines to help them start or expand a business.
"We give money to people the banks wouldn't even consider lending to," says PPEP's founder, Dr. John Arnold. And his 30-year-old loan program which has helped more than 500 people start businesses, he proudly notes, has a default rate of less than 2.5 %.
But now, apparently, this successful program has become a victim of CHD political correctness - or incorrectness.
According to Arnold, CEO of Portable Practical Education Preparation, which operates the MICRO Loan fund, the CHD promised a $40,000 grant along with a $50,000 loan at 7% to MICRO Loan to fund its programs in three southern Arizona border towns.
CHD stopped the funding after Arnold became the spokesman for the Arizona Rural Human Services Network, which coordinated a boycott of the CHD-funded Pima County Interfaith Council because of its high-pressure political activities.
PCIC is an affiliate of Saul Alinsky's Industrial Areas Foundation, and is supported by both the local and national Campaign for Human Development, and mandatory fees from approximately 40 Catholic and Protestant churches in the Tucson area.
In January, PCIC stepped up its power politics in the state, said Dr. Arnold, "and began doing a lot of political bullying of social service agencies and politicians in order to promote its agenda.
"Rural Arizona voted to boycott PCIC and its Economic Development Summit because we objected to its political action and its agreement with the Arizona Education Association, the state teachers' union, to train schoolchildren as organizers. "Because we were part of the censure of PCIC, someone at PCIC contacted the CHD in Washington and informed on us. That's one of PCIC's bullying tactics. They contacted the bishop, and then (Steve) Callahan (economic development coordinator for CHD) came into the picture. "
In February, Arnold continued, Callahan called Frank Ballesteros, deputy CEO of PPEP and director of the MICRO Loan, and made it clear that if Dr. Arnold didn't "back off" in his criticisms of PCIC, the Industrial Areas Foundation affiliate in Tucson, PPEP "would get no funds."
"Since then, we've received nothing," said Arnold.
Of the total $90,000 promised to PPEP by CHD in July, 1996, PPEP has received only $20,000 - $10,000 in October, 1996 and an additional $10,000 in January.
"That's unfortunate," Ballesteros told The Wanderer. "The funds are drastically needed by people here who are devastated by the peso devaluation. This money is supposed to help the poor. How can a Catholic agency that's supposed to help the poor, that made a promise, hold up money for political reasons?"
Ballesteros answered his own question. "It seems to me that the problem is what PCIC is saying about us. Callahan said we're not 'heading in the right direction,' that John is slandering the Church.
"But the first excuse the Washington CHD office gave us was that the CHD's commitment was based on matching funds from the Treasury Department.
"Then he came up with a second excuse: our board was not low income enough. He told me I had to send him a letter justifying why our board wasn't 'low income.' I responded that our board is so low income that it couldn't get any lower; it was way below poverty level.
"Then we got the third excuse: CHD wouldn't support our project because of our conflict with PCIC."
Appeal To Bishop Moreno
On March 31st, Ballesteros wrote an impassioned letter to Bishop Manuel D. Moreno of Tucson, explaining that the economic situation in the border towns of Douglas, Nogales, and San Luis was deteriorating rapidly, and PPEP could do much to alleviate the poverty if the CHD would fulfill its commitment.
"The S50,000 investment from CHD has been held up in Washington for some reason or another," he wrote."I have communicated with Stephen Callahan of the Washington office only to hear the investment is still tied up. . . .
"I am asking your strong support in helping Project PPEP to receive this initial investment from CHD. This investment has been promised to the three border communities. I am hoping that we can continue to keep this important project afloat as this strategy could well be the only chance that many micro- entrepreneurs have. They are depending on us!"
Moreno's response, said Dr. Arnold, was to tell us to talk to PCIC director Frank Pierson.
"Pierson has been harassing Frank, telephoning him at home and at work, to try to get me to stop talking about PCIC, but I think it would be detrimental for our organization to talk to him," said Arnold.
On April 16th, the CHD's Callahan wrote to Dr. Arnold and explained why the promised grant was not forthcoming.
"It is CHD's long-held view that local disagreements over such policies and programs are best resolved locally and it is our policy not to intervene in those matters. Furthermore, we strongly encourage CHD-funded organizations to cooperate, which, while not always easy, often leads to more optimal outcomes than strategies which serve only to divide and weaken our communities further. We would hope that funded organizations such as PPEP and PCIC might work out a unified approach to the issues at hand which strengthens the work of both or ganizations to address the needs of low-income residents more fully.
"Through its funding, the Campaign for Human Development seeks to encourage positive initiatives to further build the Kingdom of God. It is our hope that you will seek to mutually work to resolve whatever misunderstanding there may be and that your relationship with PCIC might be one of collaboration instead of hostile confrontation."
Callahan said nothing about the promised grant and loan.
As The Wanderer reported in its May 8th edition, the Arizona Rural Health Services Network is leading a statewide campaign against PCIC, after the organization demanded $10 million in tax dollars to support its so-called Family Development Fund - an ambitious program designed to recruit and hire neighborhood activists for Local Leadership Teams which will agitate for neighborhood health clinics, community policing, school-to-work programs, and so on.
The $10 million it demanded is more than all other social service providers in the state receive put together.
But not only is Arizona Rural opposing the PCIC tax grab, PCIC has also been strongly denounced in the state's Spanish-language newspapers as "Marxist." Fur ther, the Industrial Areas Foundation's southwest organizer, Ernesto Cortes, has been caricatured as Judas, for pretending to love the poor while lusting for money.
PCIC is viewed as an aggressive upstart by many social service providers such as Arnold, who began PPEP and service to rural and migrant farm workers 30 years ago, at the age of 16, driving an old Chevy school bus. Hence PPEP's name: Portable and Practical.
In August, 1992, on PPEP's 25th anniversary, Arizona Cong. Jim Kolbe proudly acknowledged the organization's goals, citing the MICRO Loan program which, he said, "exists to assist the disadvantaged by having them rely on their own hard work and ingenuity, not on seemingly endless government handouts."
Callahan. the economic development coordinator for the CHD, did not respond to the Wanderer's numerous requests for an explanation of why CHD cut off PPEP's MICRO Loan grant and loan. Tim Collins, executive director of the CHD, spoke briefly with The Wanderer, but said only that he knows nothing about the cutoff. "You have to talk to Steve Callahan," he said.