Photo Credit: Bill Hammond (www.flickr.com/pictures/ak5x)

For the first time in nearly a decade, the National Hispanic Cultural Center (NHCC)’s private fundraising foundation will pay rent for its state offices at the Center.

The New Mexico Constitution’s anti-donation clause prohibits the donation of state goods, property or services to private entities. But for at least a decade, Center staffers say, the Foundation has used its offices rent-free.

The NHCC Foundation has agreed to start paying the state $1,486 a month – or $17,840 per year — for its 1,220 square feet of office space and 650 square feet of storage space, according to a lease agreement reviewed by Veritas New Mexico at the NHCC’s June 9 board meeting.

The one-year lease begins July 1 and the first month’s rent will be due that day.

Center officials were hopeful the NHCC Foundation would honor the terms of the lease.

“I hope this works out,” acting Center director Gary Romero said. “The AG’s been telling the board it needs to take care of this.”

But the Foundation has had a poor track record of paying rent on time for its La Fonda Café, on the NHCC campus in Albuquerque.

The Foundation is supposed to pay 5 percent of gross café revenues to the state each month, in order to comply with anti-donation requirements. But the Foundation is frequently late making its payments, NHCC financial officer Gene Harris and board members acknowledged.

Late payments have been a “chronic” problem, he confirmed; the Foundation’s café payments to the state were late almost every month from early 2008 through March 2011.

The Foundation paid nearly $6,000 in overdue café payments June 8, Harris told the board — just one day before the NHCC board meeting, at which the board agreed to the new office lease agreement.

Foundation offices were closed Thursday and Foundation officials did not attend the NHCC board meeting. That was unusual. Foundation officials almost always attend Center board meetings, Center board members and staffers said.

The Foundation is a private nonprofit corporation, with the sole mission of raising funds for Center programming.

But the Foundation commingled state and federal grants funds and donations intended for the Center with its own operational funds, former state officials have alleged. And an undetermined portion of some $812,500 in taxpayer money appropriated by lawmakers for completion of a fresco of New Mexico history at the Center, was used instead by the Foundation for operational expenses, including salaries, meals and lobbying efforts, Foundation and state records show.

That prompted a demand by Cultural Affairs Secretary Veronica Gonzales March 30 that the Foundation return more than $379,000 of state funds. Gonzales also ordered an independent audit by Albuquerque-based Moss Adams, which was originally due to be completed by late May but is now expected to be completed by late June.

The Foundation has refused to disclose bank statements for the account into which state and federal money was placed. But Moss Adams auditors indicated they would “demand” to see bank statements as part of their audit, according to Department of Cultural Affairs acting deputy secretary Doug Svetnicka.

Three Foundation chief financial officers have resigned since 2009.

Secretary of State Dianna Duran recently fined the Foundation $5,000 for violations of the state’s lobbyist registration and lobbying expenditure reporting law.

The Foundation’s failure to pay rent for its state offices was first raised by former Center board member Matt Martinez of Las Vegas, N.M. Former Gov. Bill Richardson removed Martinez from the board last year.

Note: A copy of the NHCC Foundation lease agreement will be posted by Veritas New Mexico as soon as possible. A scanning equipment failure at Veritas has caused the delay.