Local NAACP Branch Sued over Alleged Financial Shenanigans

Ex-employee makes allegations.

Filed last week in U.S. District Court for the Southern District of Texas, the suit also accuses the NAACP's national office of condoning Houston Executive Director Yolanda Smith's alleged financial improprieties.

The suit was brought by Tracie Jackson, who worked as an employment-law staff attorney in 2010, with a salary paid by a grant from the Texas Access to Justice Foundation. After Jackson and other grant-funded employees were told the branch was having trouble making payroll, the foundation looked at the branch's financial records.

A June 2010 letter from the foundation's executive director, included in the court filing, stated that "there has been deliberate concealment of financial records." The letter also noted that the Houston branch's bookkeeper altered and adjusted "financial records and budgets" at Smith's direction.

Because of the branch's dire financial situation, according to the suit, Smith made all grant-funded employees reapply for their jobs; Jackson was not rehired. Jackson alleges that Smith's fraud breached the Houston branch's contract with the Texas Access to Justice Foundation, and she's seeking compensatory damages and back pay.

The suit accuses Smith of running the branch into the ground over the last ten years, citing a 2006 audit by the NAACP's national office that found Smith misused the branch's credit card, misused grant funds and "submitted erroneous budgets to grant funders," among other violations.

The board of directors of the Houston branch fired Smith earlier this year after she allegedly removed a computer hard drive without authorization, but the national office "superseded" the decision and reinstated Smith while at the same time suspending her without pay "pending investigation," according to the foundation's letter.

Smith referred Hair Balls to the NAACP's national office for comment. We're waiting to hear from their legal office.