SAN ANTONIO – A San Antonio nonprofit for pregnant women and young parents that instead used money on a West Side smoke shop and out of state trips is among the biggest recipients of funding from the state program that backs it, records obtained by the KSAT 12 Defenders show.
A New Life for A New Generation’s reimbursements of $1,020,960 last fiscal year, ranked tenth out of the 50 subcontractors who take part in the statewide Alternatives to Abortion program, according to data released by the Texas Health and Human Services Commission.
Those reimbursements, which have often exceeded $100,000 a month recently, were indefinitely suspended Dec. 23, a day after a two-part Defenders series exposed significant financial irregularities within New Life.
Those issues included $25,000 spent last year to purchase land that was later registered to produce industrial hemp, a $2,000 check from New Life used to pay a builder for work done at New Life President and Founder Marquica Reed’s side business, R&J CBD Smoke & Vapor Lounge, as well as tens of thousands of dollars spent on airline tickets, hotel reservations, limousines, entertainment and a motorcycle.
A second contractor told the Defenders in a taped phone interview late last year that he accepted a $20,000 check written to him by New Life in late March for “water damage repair” even though he never completed that type of work.
Instead, according to to the contractor, he cashed the check at New Life’s bank and returned the money to Reed, who then gave him around $1,000.
Reed did not respond to emails sent to her personal and New Life accounts for this story.
HHSC officials confirmed its administrator overseeing New Life, the Texas Pregnancy Care Network, suspended New Life’s reimbursements but have not said how long the suspension will be in effect.
This source of money makes up a vast majority of New Life’s funding, records show.
The move has crippled Reed’s nonprofit as she laid off a majority of her staff at the end of last month.
Additionally, New Life’s Commerce Street headquarters are open only limited hours and its East Side location on Hackberry was shut down Jan. 11 for the rest of this month, records show.
HHSC officials declined to make Executive Commissioner Cecile Erwin Young available for an interview for this story.
In a written statement, an HHSC spokeswoman told the Defenders:
“HHSC takes seriously any allegations of misuse of public funds, and we are currently discussing these allegations with our contractor and exploring options including appropriate corrective actions, as outlined in our contract.”
The spokeswoman added via email that one corrective action could be the repayment of funds.
Since the end of fiscal year 2018, New Life has received nearly $2.7 million in reimbursements through the Alternatives to Abortion program, state records show.
The program, which has seen its budget increase astronomically in recent years, “promotes childbirth and provides support services to pregnant women and their families, adoptive parents, and parents who have experienced miscarriage or the loss of a child,” according to a description on the state’s website.
TPCN Executive Director John McNamara released the following statement earlier this month:
“As a policy, TPCN does not comment to the public about the actions or alleged actions of subcontractors; however, TPCN always looks into allegations made against its subcontractors.”
The Texas Attorney General’s Office was made aware of financial issues within New Life in a complaint filed in mid-October. The complaint accuses Reed of “using money received from the state and donors for her own personal gain.”
In response to a public information request by the Defenders, the attorney general’s office released a copy of the complaint and background information it had compiled on New Life. However, agency officials have still not responded to multiple inquiries about the status of the case.
‘Confusing and chaotic’
A former New Life case worker, who asked that we call them “J.J” in order to conceal their identity, is now the second source to tell the Defenders that Reed used nonprofit staff to help run her smoke shop.
“More than half of the janitorial staff would be over at R&J, and the half that was left over was so overwhelmed with all the work to be done on the West Side, they didn’t have time to take stuff to the East Side,” said J.J.
Janitorial staff, also called quality control employees within the organization, have work duties that include sorting material goods provided by the nonprofit, such as diapers and formula.
“It was very confusing and chaotic. Everybody was aware that something was wrong financially, but nobody knew quite the extent of what was happening,” said J.J., who resigned from the agency late last year.
“How is it that we have all this money, but we can’t seem to ever get paid on time?” said J.J., who added that Reed missed payroll for staff multiple times.
Despite the often six-figure monthly reimbursements from the state, in August alone, New Life’s account was overdraft or had insufficient funds to cover charges six different times, according to financial records obtained through a source with the nonprofit.
J.J. said case workers were also given inconsistent information on how many diapers or how much formula to give to clients of the agency.
“I don’t want the services to stop. I don’t want New Life to be shut down. I want Quica to be replaced with someone who is going to do and help the people they say they’re going to do and help,” said J.J.