A Brewing Controversy

In 1993, the Mexican American Legal Defense and Educational Fund, one of the nation’s preeminent advocates of Latino rights, christened its renovated Los Angeles headquarters the MALDEF Anheuser-Busch Nonprofit Center.

The League of United Latin American Citizens (LULAC), the country’s oldest Latino organization, festoons its annual conference halls with Budweiser banners.

At the annual convention of the National Council of La Raza (NCLR), perhaps the most influential Latino group in the United States, the three biggest domestic beer companies--Anheuser-Busch Cos., Coors Brewing Co. and Miller Brewing Co.--set up kegs and hand out promotional materials.

Every year, nearly all the nation’s major Latino groups receive thousands of dollars--sometimes millions--in alcohol industry donations. Beer money also flows into many smaller groups whose festivals and other activities are often the heart of cultural life for Mexican Americans.

Increasingly, the money is generating controversy and has created a dilemma for leading Latino groups. Critics charge that the funds have hobbled the groups’ ability to speak out against what some health experts call a devastating epidemic--alcohol abuse by Mexican American men. It has, critics say, prevented the groups from speaking out against alcohol company practices that may help fuel the problem.

The groups assert that at a time when corporate giving is low--80% of Fortune 1000 companies do not give donations to the 15 leading Latino organizations--accepting beer company money is essential to bankroll programs from literacy efforts to political advocacy.

Critics, including a growing cadre of Latino health advocates, say the money has silenced voices that should be leading efforts to call attention to a problem that is crippling too many Mexican American families.

“It’s blood money,” said LULAC’s former Executive Director Arnoldo Torres, now director of the California Hispanic Healthcare Assn.

The organizations have failed to lobby for government programs or work to combat alcohol abuse themselves, said Jane Delgado, president and chief executive officer of the National Coalition of Hispanic Health and Human Services Organizations.

(The coalition is the only national Latino group that doesn’t accept funds from alcohol or tobacco companies, which also rank among the top contributors to Latino organizations.)

Leaders of the groups coming under fire counter that they are principled people determined to help Latinos, and that their policies and practices would be the same even if they had declined alcohol company funds.

“We have not been bought off,” said LULAC Executive Director Brent Wilkes, echoing the position taken by MALDEF and NCLR. He stressed that unlike tobacco, “alcohol is a product that can be consumed responsibly.”

Beer companies scoff at the notion that their donations have influenced Latino organizations. “There is no quid pro quo,” said Jesus Rangel, vice president of corporate relations for Anheuser-Busch. “These people aren’t about to do something because a beer company tells them to do it.”

Brewers complain that they get dinged if they give money and dinged if they don’t. “Some people say every time we spend a penny, we are trying to get something,” said Coors corporate manager Joe Fuentes. “We are in the business of selling beer. But we are also a member of the community. If we are going to take out of the community, we are also going to give back.”

Corporate Donations to Latino Groups

In the year ended April 30, 1997, according to IRS records, 11.1% of MALDEF’s operating budget came from Anheuser-Busch and Philip Morris Cos., whose Miller Brewing unit is the nation’s second-largest beer company.

Anheuser-Busch is MALDEF’s No. 1 corporate donor. Only the Ford, Rockefeller and Carnegie foundations give more. Since 1991, the brewer has given more than $1.2 million to MALDEF’s operating budget; it also sponsors special events. MALDEF’s legislative lobbyists--known as “Anheuser-Busch fellows”--have been funded by the company since the program’s inception. In 1993, the brewer gave the single-largest corporate gift, $2 million, to refurbish MALDEF’s historic, 12-story headquarters in downtown Los Angeles.

In the last seven years, NCLR received $794,000 from the nation’s three largest brewers. Coors Brewing Co. gave the most: 19 donations totaling $483,200.

For LULAC, the three brewers made up at least 7.1% of corporate donations in 1998. Only the auto industry gave more.

In 1996, Anheuser-Busch was the only Fortune 1000 company to fund all 15 of the most prominent national Latino organizations, according to a study by the Hispanic Assn. on Corporate Responsibility, a group that was itself founded by beer money. The brewer estimates that it funds 700 Latino groups nationwide.

Coors gives an estimated $1 million a year to 100 Latino groups, said corporate manager Olga Garcia. (The amount doesn’t include event sponsorship.)

Miller, which donates to 150 Latino groups in Southern California, declined to disclose how much money it gives.

Personal relationships create other potential conflicts of interest between the beer companies and Latino groups. Vilma Martinez, who in 1996 chaired MALDEF’s board, sits on the Anheuser-Busch board of directors. Luis Nogales, a MALDEF founder, is on Coors’ corporate board. In 1991, Peter Coors, chief executive officer of a company reviled by some Latinos in the 1970s as discriminatory, was honored at NCLR’s annual convention. Anheuser-Busch executive Rangel is a board director of several major groups, including the National Assn. of Latino Elected and Appointed Officials.

Criticism of ties between beer companies and ethnic groups first was lobbed at African American organizations. Health activists complained that the alcohol industry targeted blacks with potent malt liquors and saturated the inner city with ads. The NAACP and the National Urban League--whose former president, John E. Jacob, sits on Anheuser-Busch’s board--came under fire for accepting industry funding. Today, many prominent black groups receive significant alcohol industry funding. The National Urban League accepted $250,000 in 1998, up from $200,000 in 1997, spokeswoman M. Gasby Greely said.

In the 1980s, beer companies became the first big corporate donors for many Latino groups. This generosity was rooted in Latinos’ boycott of Coors over minority hiring practices in the 1970s and early 1980s--during which Coors sales to Latinos plummeted. In 1984, Coors signed a pact with six major organizations. It agreed to boost minority hiring, apportion significant subcontracts to Latino-owned businesses and give substantial sums to Latino groups.

LULAC refused to sign, concerned that the Coors pact pegged how much it gave to the quantity of beer sold to Latinos. “More consumption meant a bigger cut of money. We said, ‘This is disgusting,’ ” said Torres, then executive director of LULAC. Under Torres’ successor, Joseph Trevino, LULAC signed the pact in 1986. Shortly thereafter, Trevino left LULAC to join the marketing giant Fleishman-Hillard Inc. in St. Louis to conduct public relations for Anheuser-Busch. Trevino declined to discuss the matter.

Although some organizations subsequently diversified their funding, corporate mergers in the 1990s left many dependent on a shrinking pool of donors.

Associating with well-regarded groups buys brewers legitimacy, said Jeannette Noltenius, executive director of the Latino Council on Alcohol and Tobacco, a nonprofit health group. By funding advocacy groups, corporations divert attention from problems their products cause Latinos, she said, creating the perception that what they sell is good for the community.

Indeed, Anheuser-Busch spokesman Luis De Leon conceded that the money is meant, in part, to bolster the brewer’s image and generate greater sales. “In the Latino community, when there are issues out there that may affect us, there are people in the community who will acknowledge we are good corporate citizens,” De Leon said.

Such corporate giving also generates goodwill among the most likely source of critics, blunting possible opposition to legislation or other measures the industry supports, said Eduardo Hernandez, director of CalPartners Coalition, a Sacramento-based substance abuse prevention group.

When the Center for Science in the Public Interest approached LULAC and NCLR in the early ‘90s to help lobby for an increase in federal alcohol taxes, both declined, said George Hacker, director of the group’s alcohol policies project. The two Latino organizations say they don’t recall being asked.

‘We Understand This Is Not Complete Altruism’

Latino organizations contend that while their critics may sound principled, their logic is flawed.

Rejecting alcohol funding is hopelessly naive, said Agustin Maldonado, a San Fernando Valley community activist. If anything, he said, Latino groups should squeeze companies to give a lot more, much as tobacco firms have been forced to pay huge fines to settle government lawsuits. “If you get the funds and help people and are doing good things, why not?”

Anheuser-Busch contributes millions to the National Hispanic Scholarship Fund. (In one recent magazine ad, a young recipient, wearing a mortarboard, says “Gracias a Dios por Budweiser.”)

In 1996, Coors joined Latino groups to distribute 50,000 videos that explained how to become a citizen. In the early 1990s, it funded literacy services.

Sometimes, said MALDEF president and general counsel Antonia Hernandez, in government antitrust hearings companies highlight donations to her group to show they are playing a positive civic role.

“We understand this is not complete altruism,” said Lisa Navarrete, an NCLR deputy vice president. Still, she said, if beer companies make hefty profits off sales to Latinos, they should plow some of that money back into the community.

“If tomorrow we stopped taking monies from alcohol companies, they won’t stop selling products to our community. And they will be left off the hook for giving back to the community.”

“We feel we are doing God’s work,” said LULAC Executive Director Brent Wilkes. He said beer company money helps fund literacy efforts as well as advocacy on immigration, education and census issues.

LULAC largely has limited its work on alcohol issues to its annual leadership mentoring program for 240 students, which touches on abuse. Education and the 2000 census, Wilkes said, are more pressing priorities.

NCLR, whose advocacy helped restore food stamps and other benefits to legal immigrants, has focused its health efforts on AIDS, diabetes and immunization, not alcohol. “We feel we could be much more aggressive on everything we do,” said Navarrete. “Everyone can’t work on everything.”

MALDEF’s Hernandez said donors are told upfront: Money won’t sway her on policy matters. Indeed, MALDEF has taken donors to court. In 1986, it filed a class-action lawsuit against Chevron, alleging that the oil firm had discriminated against some Latino and black employees. Chevron had given MALDEF $40,500 between 1979 and 1986.

Hernandez said MALDEF doesn’t focus on alcohol--or most other health issues--because it doesn’t have the resources.

“There is nothing I can do to convince people who think we are tainted to think we are not tainted,” she said. “It has no influence whatsoever on what we do.”

Anheuser-Busch’s money has continued to flow even as heightened anti-immigrant sentiment has made MALDEF controversial. The group led the opposition to California ballot initiatives to end bilingual education and government-sponsored affirmative action. One anti-immigration group tried to pressure MALDEF’s corporate donors by lobbying against the group at shareholders meetings.

“Anheuser-Busch was willing to stick their neck out and provide money,” said one former MALDEF employee. “With Anheuser-Busch, you didn’t have to make the case over and over again.”

If Latino groups declined funding from every U.S. company doing something objectionable--hiring child labor abroad, toxic dumping, investing in South Africa during apartheid--too many donors would be off limits, said NCLR’s Navarrete. “Very few companies,” she said, “are saints.”

Divisions Over Accepting the Money

As the debate over funding escalates, members of some smaller Latino groups have found themselves bitterly divided over whether to decline alcohol industry funding or take it and fund needed programs.

In 1991, in Redwood City, Calif., the civic group Hispanos Unidos split over whether to take alcohol industry funding for its Cinco de Mayo celebration. Some members felt that the organization should no longer ask Anheuser-Busch to sponsor the event. Others argued that the brewer’s money allowed their group to provide college scholarships for Redwood City High School students. It wasn’t up to Hispanos Unidos to regulate the drinking of adults--alcohol use was an individual decision, they said.

The vote, 13 to 12, to reject $7,000 from the company, forced Hispanos Unidos to cancel $5,000 in scholarships. In 1992, it had to forgo its Cinco de Mayo celebration altogether. After the vote, a third of its members quit; some joined another local group, the Club Mexico Americano, which held an Anheuser-Busch-sponsored Cinco de Mayo party.

In 1993, Hispanos Unidos began an alcohol-free celebration. It can no longer support the scholarships. Instead, it is funding activities for Redwood City youths.