CHD, Retaliating, Cuts Off "Poor People's Bank"

May 22, 1997
By PAUL LIKOUDIS

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.

Mutually Antagonistic

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.