By Tim Craig
Washington Post Staff Writer
Tuesday, April 28, 2009; B04
D.C. Council member David. A. Catania said yesterday that Whitman-Walker Clinic's leaders might have committed a federal crime by mishandling employees' contributions to their retirement funds, highlighting the continuing hostility between clinic officials and some council members.
The accusation, quickly denounced by clinic officials, was made at a hearing during which Catania (I-At Large), chairman of the Health Committee, urged the dismissal of Donald Blanchon, Whitman-Walker's chief executive. Catania, who is openly gay, also complained that the clinic does not have the resources needed to stem the city's HIV/AIDS epidemic.
"I wish there would be greater control over this clinic," said Catania. He later added, "This clinic is disappearing before my eyes."
Whitman-Walker board members, who support Blanchon, accused Catania, in turn, of making threats and being abusive to clinic officials as part of a personal "vendetta" against the clinic. Board member Michael Manganiello, in written testimony, said Catania verbally assailed him after he refused to support firing Blanchon. Catania said Manganiello was "lying."
"You have told members of our board that you will destroy Whitman-Walker if they do not fire me," Blanchon told Catania. "It is difficult to conceive that the chair of the city's Health Committee would threaten the existence of the leading AIDS clinic in the community over a matter he admits is personal."
Clinic leaders said the feud with Catania stems from the December layoffs of 45 employees, including several of Catania's friends. Catania called it absurd to suggest that he made such threats, saying he has been Whitman-Walker's "biggest supporter" on the council.
The bickering underscores the challenges city leaders face in trying to combat the city's HIV/AIDS epidemic. A report last month said 3 percent of city residents have HIV.
At the hearing, Catania produced e-mails that show Whitman-Walker collected employees' pension contributions last spring but did not send them to be invested. Catania said he suspects that the clinic, which has struggled financially, used the money to pay bills. "This was a violation of federal law," said Catania, who said he would not refer the matter to authorities.
Blanchon and June Crenshaw, the board chairwoman, said the clinic reacted quickly after learning that contributions had not been remitted. They said the clinic paid the money with 6 percent interest.
"We made an administrative mistake," Blanchon said. "There was no intent, and, quite frankly, it is preposterous to think in some way, shape or form that it would help us with cash flow."
At the hearing, council member Jim Graham (Ward 1), who also is gay, expressed anger over the December layoffs. Blanchon promised to review the matter.
Catania said his concern over the clinic goes beyond personnel issues. He said Whitman-Walker, formed in 1978, is the only major health clinic serving the gay community in the United States that is cutting back because of declining revenue. The clinic is projected to have a $16 million budget this year, about half its 2004 spending.
"Their auditing and accounting system is a disaster," Catania said.
Blanchon acknowledged that the clinic needs an updated accounting system, but he said it's unfair to compare Whitman-Walker to other health clinics for gay people. "The scope of services across those clinics vary so greatly," he said.
Whitman-Walker had the law firm Arnold & Porter conduct an audit that contradicted many of Catania's allegations. Catania dismissed the audit as irrelevant because James Sandman, former Whitman-Walker chairman, used to be a partner at Arnold & Porter. Sandman, chief counsel for D.C. public schools, resigned from the board last week to avoid having to testify yesterday.
Catania said after the hearing that he is optimistic that he and Crenshaw, the new chair, can have a better relationship. But Catania said he will not stop pushing for Blanchon's removal.
Blanchon said he had a personal motive for fighting for his job. His younger brother died of AIDS in 1999, at the age of 33.
"I have a commitment to make his life worthwhile," Blanchon said. "He's gone."