SAN ANTONIO – Editor’s note: Read Part 1 of this investigation here.
As Marquica Reed posted an Instagram selfie in a bathrobe from the St. Somewhere Spa on Lake Conroe on July 31, the bank account of the nonprofit she runs was being hit with a minimum balance fee, records show.
More than $2,200 in charges for the trip to the Margaritaville Lake Resort, home to the spa, were debited from the account days later, according to financial records obtained by the KSAT 12 Defenders.
Those charges put financial stress on the state-funded nonprofit, A New Life for a New Generation.
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.
But the expenditures are just a small part of a much larger pattern of jet-setting costs being paid for by Reed’s nonprofit, including tens of thousands of dollars spent on airline tickets, hotel reservations, limousines and a motorcycle.
Those types of charges fly in the face of rules outlined by a state program that provides a vast majority of New Life’s money. And none of them appear to have directly benefited the organization’s clients.
The nonprofit, which was granted tax-exempt status by the U.S. Department of the Treasury in 2016, has two San Antonio locations.
New Life provides diapers, formula and counseling services to pregnant women and young parents in need. Records, however, show much of that money has gone elsewhere, including to a West Side CBD smoke shop opened by Reed this summer.
A Defenders investigation on Tuesday revealed that New Life spent $25,000 earlier this year to purchase land that was later registered by Reed’s family member for industrial hemp production.
The Texas Attorney General’s Office was made aware of financial irregularities within New Life in a complaint filed in 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 not responded to multiple inquiries about the status of the case.
Listen to Dillon Collier’s interview with Texas Public Radio about this story:
‘Time to have some FUN’
Financial records show New Life also funded four out-of-state trips from September 2020 to June 2021.
The trips, attended by Reed, members of her family and some New Life employees, were documented by Reed on her public Instagram page.
In September 2020, more than $16,545 was debited from the nonprofit’s bank account for airline tickets and $3,902 for Las Vegas hotel reservations. Days later, Reed posted a selfie on Instagram with a Las Vegas tag and the caption “Time to have some FUN.”
Reed also posted pictures on Instagram of her son posing with scantily-clad models on the Las Vegas Strip, captioning them that her son was “Living his BEST LIFE.”
In November 2020, New Life’s account was debited more than $12,460 for airline tickets. Another charge for $15,800 for the Marriott South Beach Hotel in Miami was debited from the account in early December 2020.
On December 18, 2020, Reed again took to Instagram and posted a selfie that included the caption “Enjoy Miami.” Additional items posted by Reed on Instagram that day include a location tag of Miami, Florida, with pictures of her and other people and the caption “New life Employees.”
That week, New Life’s account was charged thousands of dollars in several transactions, including:
- A bill of $110 by Boucher Brothers, a Miami Beach hospitality management company that rents beach and water sports equipment. Reed posted a photo on Instagram sitting on a moped scooter the same day as the charge.
- $2,059 was debited by American Airlines in various transactions on December 21 and December 22, 2020.
- A second Marriott South Beach Hotel charge on December 21, 2020, for $4,213.
New Life financial records for that month show Reed made a $500 deposit into the account labeled “Reimbursement for Miami trip.”
Additional deposits made into New Life’s account that month and the following month totaled $2,374, but did not indicate if they were related to travel.
Two deposits in February 2021 totaling $400 were labeled “Reimbursement for travel.”
The traveling continued.
In late February, New Life’s account was debited more than $7,250 by a travel agent. On March 1, New Life’s account was debited more than $18,156 by Southwest Airlines. Separate charges to New Life by Southwest days later totaled an additional $8,740.
Pictures posted on Instagram by Reed on March 19 included a selfie with the caption “Enjoying VEGAS LIFE,” as well as pictures of her traveling group on the Vegas strip and her son again posing with models.
Records show New Life’s account paid for two separate charges of $248 for Executive Star Limousine in Las Vegas and $32 for a Las Vegas taxi service.
That month, two in-person deposits were made to New Life’s account totaling $550, including a $200 deposit made by Reed March 24 labeled “Traveling reimbursement.”
Reached by the Defenders on the telephone last month, the travel agent said she did not want to divulge any information about the services she provided without first talking to the woman who booked the travel.
In early May, the financial records show $9,818 was credited to New Life’s account by Southwest Airlines.
That same month, however, the records show another debit of $5,475 for “airline ticket fare.”
On June 23, New Life’s account transferred $8,936 to Puerto Rico.
Two days later, Reed posted pictures on her Instagram, including multiple selfies, with a location tag of San Juan, Puerto Rico.
To date, it remains unclear how any of New Life’s clients benefited from these trips.
‘There’s got to be more scrutiny’
A New Life for a New Generation, a subcontractor for the state’s Alternatives to Abortion (A2A) program, has received over $2.5 million in state reimbursements since the third quarter of fiscal year 2018, including more than a million dollars last fiscal year, Texas Health and Human Services Commission records show.
Funding is provided to administrators, in New Life’s case the Texas Pregnancy Care Network (TPCN), which then gives money to nonprofits in the form of reimbursements for services provided.
TPCN Executive Director John McNamara declined repeated requests to be interviewed for this story, but said via email he was unaware of any financial irregularities within New Life.
An HHSC spokeswoman this month said via email that TPCN had not reported any possible financial irregularities involving New Life.
“This has been the problem, really, with A2A from the beginning, as it was more of a political response to abortion services and never had the accountability that it should have had,” said State Rep. Donna Howard, D-Austin, who chairs the Texas Women’s Health Caucus.
Rep. Howard, who has raised accountability concerns about Alternatives to Abortion for years, said the state lacks the safeguards to properly monitor how its contractors and subcontractors are spending the program’s funding.
The budget for Alternatives to Abortion, created in 2005, saw its funding double in 2019 and then raised again by state lawmakers this year, to around $100 million for the next two years.
“It’s more for political flyers than it is to really achieve better care for women. Obviously, there’s got to be more scrutiny of the contract process in the first place, and clearly of the subcontracting process,” said Howard.
Structure of New Life board ‘a huge conflict of interest’
New Life’s board of directors consists of Reed as its president, her common-law daughter-in-law Gloria Yanez as its vice president and a treasurer: Sanford Jones, who has children with Reed, internal records obtained by the Defenders show.
That setup and small board structure, coupled with Reed drawing a salary from New Life — $52,630 in compensation, according to its 2019 federal tax paperwork — is a recipe for mismanagement, said Jason Meza, regional director of the Better Business Bureau San Antonio.
“It’s a conflict of interest, I mean down to the nuts and bolts. It’s a huge conflict of interest. We don’t want to see that,” said Meza, whose agency accredits and approves charitable organizations through its Wise Giving Alliance.
Meza said a nonprofit should have a board with a minimum of five members, who aren’t compensated, in order to create separation between the board and the operations of the agency.
Yanez, listed on New Life’s board of directors since January 2020, was given a $50 COVID appreciation check in late October of that year.
She is also covered by the nonprofit’s workers’ compensation insurance policy, records show, raising questions about whether she was also a paid employee of the organization while serving on its board.
Yanez did not respond to a text message seeking comment. Attempts to reach Yanez via telephone were met with an automated message that the person dialed was unable to receive calls.
Questionable vehicle purchases
Bill of sale records from the nonprofit show Reed in January agreed to sell her organization a red 2015 Dodge Charger she owns in exchange for $35,000.
At the time of sale, the Charger had an odometer reading of 82,000 miles, records show.
The same day the bill of sale was written, Reed was provided a New Life check for $10,000 for a “down payment for vehicle.”
Through the end of September 2021, Reed had collected checks for the vehicle, its registration renewal and maintenance of it totaling more than $32,100, New Life records show.
State title records, however, show the Charger is still in her name and was originally purchased by her in 2019 for only $21,982.
Kelley Blue Book, a vehicle valuation company, lists a fair market price for that style vehicle with over 80,000 miles on its odometer of $18,560, about half the amount New Life promised to pay Reed for it.
Footage captured by the Defenders earlier this year showed the Charger wrapped with New Life’s logo and the back portion of its body now painted pink.
In the fall of 2020, days before New Life received the first of two federal Paycheck Protection Program loans, records show the organization purchased a three-wheel Polaris Slingshot motorcycle from a local dealership.
A “You owe-We owe” document from the dealership obtained by the Defenders and bearing Reed’s name and signature on it, contains Reed’s then-home address and her personal email account, but does not mention the nonprofit.
Photos and videos of the motorcycle frequently appear on social media, including being driven by Reed’s family member.
A source with the nonprofit said New Life’s finances have recently been hampered by having to make frequent payments on three lines of credit taken out against the organization.
New Life’s account had a negative balance for four straight days in September, despite receiving reimbursements from the state administrator that month totaling more than $141,400, financial records show.
A grant writer who resigned in October cited “toxicity and disregard for ethics that New Life seems to foster” as his reasons for leaving, according to a copy of his resignation letter obtained by the Defenders.
After the Defenders tracked down Reed outside R&J smoke shop last month, she agreed to answer questions before locking herself inside the establishment.