Money Woes Plague Legacy Of Rosa Parks
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Two charities created to preserve and protect the name and legacy of civil rights legend Rosa Parks and her late husband have spent the last seven years entangled in lawsuits for nonpayment of bills, been slapped with $25,000 in tax liens by the IRS and the state, and had a vehicle repossessed. In addition, Parks has twice received eviction notices from her Detroit home, a Free Press investigation has found.
Parks’ doctors have said the 91-year-old matriarch of the modern civil rights movement is in poor health and has dementia, a condition suggesting she is likely unaware of the financial problems. She has rarely been seen in public in recent years. Some of her family members have questioned whether Parks is receiving the care she deserves.
“We never had proof, but we always suspected something was amiss with Auntie Rosa,” said Rhea McCauley, a niece who tried to become Parks’ guardian in 2002. “The way they’re caring for our aunt is not professional at all. They’ve virtually shut the family out.”
But Gregory Reed, 56, Parks’ longtime attorney, said Parks has a network of people who care for her and ensure that her business affairs are in order.
“She has always been well cared for — medically wise, spiritually wise,” Reed said. “The facts speak for themselves. She’s been very happy.”
Questions about Parks’ well-being surfaced after Reed filed a high-profile lawsuit on her behalf in August seeking billions of dollars from the record companies of the hip-hop duo OutKast for using Parks’ name without her permission in the song “Rosa Parks.” Some of Reed’s proposed witnesses include U.S. Sen. Hillary Rodham Clinton, Oprah Winfrey and Coretta Scott King. Reed first filed suit against OutKast and the companies in 1999. OutKast was later dropped from that suit.
Reed, who is seeking $5 billion in the case, has been chastised in pretrial proceedings and was fined for neglecting to submit discovery items by a judge’s deadline. The federal judge presiding over the case recently appointed former Detroit Mayor Dennis Archer to serve as a guardian to protect Parks’ interests after expressing concern about how the case was being handled.
McCauley said a recent Free Press story about Archer’s appointment helped her and some of her siblings regain access to Parks, who has 13 nieces and nephews.
They visited Parks on a recent Sunday in her downtown Detroit apartment. McCauley said Parks sat in a wheelchair and didn’t appear to recognize her family. She didn’t speak but did not appear to be neglected, McCauley said.
In 2002, Wayne County Probate Judge Freddie Burton denied McCauley guardianship of her aunt.
McCauley had argued that she wanted to take over Parks’ affairs because she was concerned about her aunt’s financial, medical and emotional needs. And she said she thought that Elaine Steele, Parks’ longtime friend and caregiver, and Reed had financial designs on Parks.
Steele’s attorneys argued that Parks had given Steele durable power of attorney in 1998, and that Parks, who was then mentally sound, trusted Steele to handle her affairs.
“Poor Auntie Rosa,” McCauley, 52, of Ypsilanti said last week. “Her only crime is just trusting the wrong people.”
No ‘peace and tranquility’
Friends and family have fretted about Parks’ well-being for years. When her Detroit home was broken into and she was assaulted in 1994, outraged business and community leaders raised funds for Parks’ relocation to Riverfront Apartments, a luxurious, high-security complex.
When she moved in, Archer, who was then Detroit’s mayor, welcomed Parks to the building and cited her spectacular view of the Detroit River. He said her surroundings offered “peace and tranquility.”
But in 2002 — in October and again in November — the complex took her to court for nonpayment of rent and tried to evict her. Management filed complaints in 36th District Court in Detroit, stating that Parks owed the complex $4,471.
Steele said Parks’ rent was paid. She said the eviction notices were mistakenly filed and should have been removed from court records. Steele said someone from Riverfront’s office told her that an error occurred, but she couldn’t supply the name of that person.
“I really don’t want to discuss Mrs. Parks’ personal finances,” said Steele, who would not say how Parks’ bills are paid. According to documents obtained by the Free Press, Parks receives a pension from the Federal Civil Service and Social Security benefits.
Harold Goodstein, a Farmington Hills attorney who represents Riverfront Apartments, said Parks, like any tenant who is late with rent, had 10 days to pay the rent after the court entered judgments against her.
“I remember being surprised the rent hadn’t been paid because of who she was,” Goodstein said. “There was a short period of time when there was a problem, but I believe it was taken care of because she obviously still lives there.”
Brenda Norts, Riverfront Apartments general manager, said earlier this month that Parks’ rental status “is in good standing at this time.”
In August 2001, Mike Chase, a national repossessor, was hired to track down a handicap-accessible van and recover it.
The vehicle was registered to the Rosa and Raymond Parks Institute for Self Development, an organization Parks created in 1987 to honor her late husband, Raymond, by helping young people through educational programs. The institute was behind in paying a loan issued by a Pennsylvania bank.
Chase said he first called Steele, the institute’s vice president and secretary, to tell her the monthly payments were delinquent. He said he left several messages at the institute, asking her to voluntarily give the van back. Chase said he finally reached Steele by phone a few times, and she was repeatedly rude to him. He said she accused him of being a racist and threw epithets at him. Steele also told him he would never recover the vehicle, he said.
“Try and find it, cracker,” he said Steele told him before hanging up. Steele, who does not receive a salary from the institute, denied using such language.
Chase said he had Steele under surveillance as he tried to seize the van, and followed her to fancy restaurants, shopping centers and friends’ homes. He said Steele’s relatives and other associates sometimes drove the van on errands.
“There was never one person over 60 years old in that van,” Chase said of the vehicle, which is equipped with lifts for wheelchairs and other amenities for elderly people and people with disabilities. “She kept telling me that senior citizens needed the van, but I only saw her drive it. And usually, with no one inside.”
Steele, 60, denied using the van for personal errands.
William Gibbons, the institute’s accountant, said he tried to avoid repossession by paying a couple thousand dollars at a time, when Parks Institute money became available. Gibbons is owner of the Detroit-based Electronic Filings, a commercial income tax company that handles the institute’s finances.
Still, Chase said he received another call that the institute was delinquent on the loan again but this time, Chase said, First Star Bank of Pennsylvania wasn’t giving the institute a chance to settle up. Chase said Steele admitted the institute didn’t have the money and told him to come pick up the van. He said he went to Steele’s home on Wildemere, on Detroit’s west side, and repossessed the vehicle.
“There wasn’t money to pay for it, so we had to give it back,” Steele said.
Tax liens pile up
The Internal Revenue Service is pursuing the institute for unpaid taxes.
Sarah Wrefort, an IRS spokeswoman, said the institute owes the government for unpaid federal and Social Security taxes related to institute employees’ paychecks. In 2001, the government placed a lien against the institute until $20,000 in overdue taxes from 1997 to 2000 are paid.
Steele says the institute has been struggling financially, and the staff has been cut to one paid employee and two volunteers.
The institute was created with the purpose of instilling a sense of political, economic and self-awareness in young people. Tax records list Parks as president of the institute, which has an office at the Cadillac Tower Building in downtown Detroit. The institute is financed by private donations, grants and government contributions.
Federal tax records from 2002, the most recent year available, show the institute had revenue of $488,096. But it spent $519,018 that year — $338,461 on education programs. The institute paid $22,381 in salary and wages in 2002. The remainder paid for other institute expenses such as rent.
Steele said the institute has entered into a payment agreement with the IRS and is repaying the money.
The State of Michigan also placed a $2,300 lien on the institute in 2002 for not paying unemployment compensation taxes.
Norm Isotalo, a spokesman for the state’s Unemployment Insurance Agency, said nonprofit employers are required to fully reimburse unemployment taxes to the state if an employee is laid off or if unemployment benefits are paid.
Steele said one or more former institute employees could have collected unemployment benefits, though she could not specifically remember who might have. She said the institute also has entered into a repayment plan with the state.
Still, Deborah McCauley, another of Parks’ nieces, questioned the management of the institute’s funds.
“Auntie Rosa always paid her bills on time,” said McCauley, 55, of Ypsilanti. “And she prided herself on that institute. It’s a shame that they’ve damaged our aunt’s reputation and the reputation of the institute she worked so hard to create.”
MSU files lawsuit
Michigan State University sued the institute in 36th District Court in Detroit last April, demanding $700. According to the complaint, MSU had sold and delivered merchandise and other services to the institute around March 2002 and had not been paid in full.
The invoice shows that the institute used Holmes Hall and its cafeteria and cashiers’ services on March 13, 2002, and agreed to pay the university $3,953 for the space and staff. The institute paid MSU $1,000 on June 17, 2002, and $1,500 on Aug. 19, 2003. Another payment for $753 was made on Dec. 19, 2003. That left a balance of $700.
District Judge Beverly Hayes-Sipes entered a judgment against the institute in May, after neither an institute attorney nor representative appeared in court. Hayes-Sipes ordered the institute to pay $843.63, which includes court costs.
Steele said the institute had hosted one of its programs on MSU’s campus, and paid the university’s bill as money became available. The institute has since paid the judgment, she said.
“We continue to try to work with our creditors, and most of them have been patient with us,” Steele said. “We’re not the only ones who are having a difficult time financially. We don’t feel that we’re being picked on, and we will pay our bills, although our pay is a little bit slow at this time.”
40th anniversary tour
In 1995, Steele and Reed planned a nationwide tour to commemorate the 40th anniversary of the bus boycott prompted when Parks, a seamstress, refused to give up her bus seat in Montgomery, Ala., to a white man on Dec. 1, 1955.
Parks was to travel to 40 cities for a series of tributes, appearances and book signings.
The 40th anniversary celebration was planned under the umbrella of a new nonprofit organization called the Parks Legacy.
Created in 1995, the organization was set up to police, protect and promote Parks’ legacy, including her name, image and likeness, said Reed, a cofounder. The Parks Legacy has sold the books “Quiet Strength: The Faith, the Hope, and the Heart of a Woman Who Changed a Nation,” cowritten by Reed, and “Dear Mrs. Parks,” audiotape versions of “Quiet Strength,” Parks figurines and a tribute CD of gospel artists honoring Parks.
Parks Legacy was dissolved in 2000. But before its demise, it was involved in two lawsuits with creditors connected to the 40th anniversary celebration.
In one case, Phase Four Telecom, a calling card company based in Bloomingdale, Ill., claimed it was hired to produce and distribute calling cards with Parks’ likeness for profit. But few calling cards were sold, and Phase Four was $61,000 in the hole by April 1996, according to the company’s attorney, J. Michael Huget, who works in Ann Arbor.
Phase Four was forced to file for bankruptcy, Huget said. Parks Legacy sued for breech of contract and fraud. U.S. District Judge Anna Diggs Taylor dismissed the case, and denied Reed’s motion to compel arbitration.
“Reed knew he wasn’t going to get any money, but unfortunately, a small company fell victim and had no ability to proceed,” Huget said.
Reed contends that Phase Four filed for bankruptcy prior to the lawsuit in an effort to avoid paying Parks Legacy any proceeds from the calling cards.
‘Lowest point of my career’
Niche Communications, a small company in Clemmons, N.C., got into a legal fight with Parks Legacy in 1996, claiming it was not paid for its services. The company had been hired to develop all the marketing and promotional material for the 40th anniversary celebration.
Deirdre Guion said she and her business partner, Paullette Everett, devised a business plan, paying out-of-pocket for brochures and other expenses to solicit sponsorships. They also developed a modified bus that would serve as a moving exhibit and enable Parks to travel the country. But things began to unravel when it was time for Steele and Reed to approve the plan, she said.
Guion said Niche began sending Parks Legacy itemized bills for services. That’s when Reed first threatened to sue the company for nonperformance.
Reed said the company did not line up sponsors as promised.
According to court records, Reed sued the company in Wayne County in January 1996. Niche countersued, claiming it was owed more than $200,000. Parks Legacy claimed it owed the women only $16,500.
“They were good people, but they did not have the skill level to fulfill what they represented,” Reed said last week of Guion and Everett.
The case languished until December 1998, when an arbiter ruled that Parks Legacy owed Niche Communications $158,000 plus interest.
In 1999, U.S. Rep. Carolyn Cheeks Kilpatrick, D-Detroit, got Congress to allocate nearly $1 million to the institute to bail it out of financial trouble. Still, Niche’s bill went unpaid, Guion said.
In November 1999, two days before a star-studded concert fund-raiser for the institute, Wayne County Circuit Judge Pamela Harwood froze any concert proceeds and ordered that the money go to pay bills, in particular the $158,000 owed Niche Communications. Guion could not remember if Niche ever got paid.
“If you can imagine even having to think about suing the mother of the civil rights movement — it was devastating,” Guion said. “Professionally, it was the absolute lowest point of my career.”
(Posted on November 24, 2004)