Latino Business Group Weighs Harassment Allegation Against CEO

Ms. Vaca declined to comment. Her allegations of financial impropriety led foundation directors to reduce Mr. Palomarez’s responsibilities, according to foundation board minutes, and the chamber’s directors to consider forcing his resignation last fall, according to chamber board minutes and to people close to the board.

Gissel Gazek Nicholas, Mr. Palomarez’s former chief of staff, has accused him of sexual harassment. Ms. Nicholas, who was fired last fall, made the accusations in a letter that her lawyer wrote to the chamber’s board and in an interview with The Times. The letter said that Mr. Palomarez sexually assaulted her, created a hostile work environment and wrongfully terminated her from her chief of staff role.

The Hispanic Chamber of Commerce calls itself the voice of 4.4 million Hispanic-owned businesses.

Mr. Palomarez, who was named chief executive eight years ago, has raised the organization’s profile. He has advocated for Latino business interests on television and in op-ed articles, secured access to influential figures in the White House and on Capitol Hill and strengthened the chamber’s relationships with companies like Coca-Cola and Goldman Sachs. In September, he resigned from President Trump’s National Diversity Coalition to publicly protest Mr. Trump’s decision to end the Barack Obama-era program that shields young undocumented immigrants from deportation, known officially as the Deferred Action for Childhood Arrivals, or DACA, program.

Last year, shortly before Mr. Palomarez’s employment contract was due to expire, Ms. Vaca reviewed his pay and performance from prior years, according to people close to the board and to the Texas court filings. She discovered what she described to fellow directors as a pattern of inappropriate annual raises and other payouts, according to people close to the board, including Maria Cardona, who was a director at the time. Ms. Vaca estimated that Mr. Palomarez was paid hundreds of thousands of dollars more than he was entitled to under his contract, according to board minutes.

Six members of the board’s executive committee voted on Oct. 31 to give Mr. Palomarez a chance to resign within a week and repay the chamber a negotiated amount of money. At that point, the organization estimated the overpayment at $500,000 to $600,000, according to the board minutes.

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“What he did was financially inappropriate at best, and if he had done this at any other organization, he would have been fired on the spot,” said Ms. Cardona, who voted to oust Mr. Palomarez.

About a month later, in early December, Ms. Cardona and two other female directors who wanted Mr. Palomarez to resign were forced off the board because they hadn’t paid their annual board dues on time, according to Ms. Cardona.

On Dec. 6, the board again considered the allegations of overpayment, but rejected them, according to the Texas filing. A spokeswoman retained by the organization’s board had no immediate comment on the matter.

Ms. Nicholas’s harassment allegation stemmed from an incident that she says occurred in Chicago in 2013. Mr. Palomarez was there for an event with the city’s mayor, and he asked Ms. Nicholas and other employees to join him in his hotel suite for last-minute preparations, according to Ms. Nicholas and two other people who were there. Late that night, as the group was leaving his suite, Mr. Palomarez asked Ms. Nicholas to stay behind, they said.

Ms. Nicholas said he asked her to sit down with him and discuss the next day’s event.

“He grabbed my hand gently, and is rubbing the back of my hand, and says that he’s incredibly attracted to me, and wondered what it would be like to be with me,” Ms. Nicholas said in an interview. “He asked if I had ever thought about being with him.”

She said she rebuffed Mr. Palomarez, while trying to avoid an awkward situation.

“I said, ‘Oh, Jav, we shouldn’t go there,’” Ms. Nicholas said. On her way out the door, she said he pulled her toward him and tried to kiss her before she broke away.

Her account was corroborated by an email she sent to a friend hours after the incident, as well as a second friend whom she told about the incident at the time.

Mr. Palomarez denies that the incident took place. He said in the Texas court filing that Ms. Vaca, a chamber board member at the time that Ms. Nicholas’s allegations surfaced, put Ms. Nicholas up to fabricating a sexual harassment claim in exchange for a promise that Ms. Nicholas could replace Mr. Palomarez as the chamber’s chief executive.

Ms. Nicholas said that is false and that she was never interested in becoming the chamber’s chief executive.

Mr. Palomarez has faced harassment allegations before. In 1996, when he worked at Allstate Insurance, he was sued by a subordinate, Yolanda Hernandez, who accused him of making suggestive comments, kissing her and placing his hand on her thigh at an out-of-town business gathering. Ms. Hernandez eventually became fearful of stalking and “other provocative acts” and left the company shortly afterward, according to the lawsuit.

The case was later settled, according to a lawyer for Ms. Hernandez. She is now a marketer in the Chicago area. Her lawyer said the settlement included a confidentiality agreement.

Asked about the Allstate suit, Mr. Palomarez’s lawyer, Tony Buzbee, said, “Javier didn’t harass anyone.”

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