Brownlee's descriptions of the process and revenue stream–even if taken at face value to be truthful statements–should have raised questions, if they had been scrutinized closely.
He claims to have received more than 2,000 donated computers over the last two years, but that only about half of those turn into workable computers that can be sold or given away.
"Every 10 machines that come in, we're able to make five work," he said.
According to Brownlee then, that means he had around 1,000 working computers that could be given away or sold. Yet he claims to have given away just 202 computers as of December–a figure which most sources say is high and for which Brownlee will provide no accounting.
But assuming that he's telling the truth, that means Brownlee has been able to sell around 800 working computers. Even using the lowest selling price he cited of $100–which records show is well below the price of many of his computers–that totals $80,000 in revenue.
And if he gets $5 each for the remaining 1,000 computers that are given up for salvage–the average Recomp price–that adds up to another $5,000. Add to that the cash donations that Computers 4 Kids has received, which totals at least another nearly $3,000.
Then there are the computers he "gives away." In addition to getting a public relations advantage from the donated computers–publicity that sparks increased computer donations–Spicer said C4K has made money off some donated computers.
For example, he relates the story, which Brownlee denies, of a poor Latino family from the South County who was given a computer that didn't work, so Brownlee told the mother to drop the computer off and he would fix it.
When the woman returned a few days later to pick the computer up, she was told by Brownlee that there would be a $60 charge for the tech work, something that caught the poor woman by surprise, although she dutifully came up with the money and left with her used computer.
"It made me sick to my stomach," Spicer said. "That's when I knew I had to get out."
Brownlee claims to sell computers for around $100, with $250 being the most he claims to have charged, although court documents and bills of sale show computer systems selling for up to $600.
Then there are the obvious misstatements that Brownlee hopes nobody will catch. When asked whether he charges sales tax on his computer sales, Brownlee says, "Nonprofits don't have to pay sales tax." That isn't true.
Brownlee Part II
During a second interview with Brownlee on Friday, Feb. 26, New Times confronted him with most of the information contained in this article and other accusations made against him.
Yet he refused to open his books or provide the kind of detailed information needed to refute the charges.
"I don't care what you hear. Until someone comes forward with a lawyer or a DA to substantiate it and I've committed a crime, I don't care what you want," he said. "As far as doing a full accounting for New Times, we're not going to do it. We're not required to."
Brownlee and Hugo say the state and federal financial disclosure forms that C4K is required to file should be completed by the end of March. Yet with no means of ensuring Brownlee and Hugo are accurately reporting their cash revenues, such a financial statement could prove to be meaningless.
"I understand how it looks. And what I would say to you is this: This is a mom-and-pop operation that puts out a helluva lot more computers than it sells, and we have a check-and-balance system here. We know how much we put out, we know how much we sell, and I can tell you right now it hasn't been enough to keep the doors open," Brownlee said.
But then he said he wouldn't furnish those numbers. While he disputed his earlier figure of having given away 202 computers, he wouldn't offer a guess at the actual figure.
Confronted with the fact that Computers 4 Kids should have been paying sales tax on its computer sales, Brownlee admitted they may have made a mistake.
"We may have found that we screwed up there, and if we did, we'll have to correct it," he said.
He insisted that the Computers 4 Kids money didn't mix with his own meager earnings, and he wouldn't offer proof that he has any other income beyond C4K.
"We have very, very limited resources for very little money and a lot of expense," Brownlee said. "I think you will be surprised when you see a breakdown at how much of an expense there is to run this little computer operation."
Brownlee had said his monthly expenses were about $2,000 a month, and when questioned, he started to offer a rough breakdown: "Rent, insurance, phones...."
But when questioned on the whether Computers 4 Kids pays the rent for this home office, Brownlee backtracked, saying Hugo pays the rent. He then refused to break down his monthly expenses any further.
"If we've done something that is punishable, then we'll be punished. But I can tell you this right now, our sole mission has been to get computers out to kids and that's what we've been doing, and we've been getting a lot of them out, and trying to survive and have a life," Brownlee said.
By the end of the interview Brownlee's tone had gone from confrontational to contrite.
"If there are major issues within the finances of Computers 4 Kids and we are doing something wrong, it hasn't been intentional, and we will do whatever it takes to correct it," he said.
Nobody Watching
How have Brownlee and Hugo been allowed to get away with this? Aren't there supposed to be mechanisms for making sure nonprofit organizations don't abuse the public trust or their tax-free status?
While there is a system for holding nonprofits accountable, those involved in that system say it is underfunded, understaffed, and overburdened to the point of being powerless.
June Smith with the California Attorney General's Office of Charitable Trusts–which regulates nonprofits like C4K–said it is nearly impossible to keep close watch on California's 80,000 nonprofit organizations.
"There are some that get past us, and we have a small staff here," she said. "They're basically not in the system yet until they send us in [a CT-2 financial disclosure form]."
Another woman in the office's Delinquency Branch, who identified herself only as Sandy, confirmed that organizations that never file a CT-2 are rarely scrutinized.
"If we don't hear from them, we just assume they have no assets or financial activity," she said.
Joyce Tool, also of the Delinquency Branch, said the work is so backlogged and the office is so busy that most enforcement action is complaint-driven. But such complaints are not a matter of public record, so they couldn't say whether anyone has complained about C4K.
On the local level, there is also no mechanism for keeping watch on nonprofits, or making sure taxable sales are being taxed, or making sure someone is watching people like Brownlee, except on the basis of citizen complaints.
And even then the results are mixed. After being cheated out of the computer he paid for, Thomas Kuhle tried to get something done about Brownlee, for the lies he told, for his unpermitted computer sales, and for what he believes is lack of licensing to sell computer software.
Kuhle said he told both the San Luis Obispo Police Department and editors at the Telegram-Tribune–where he works in the production department–that Brownlee was swindling people, but neither acted on the information.
Those who learn of Brownlee's questionable financial approach get angry, especially because they say it will give a bad name to what should be a good cause.
"I hope, if improprieties have occurred with the current situation, that it doesn't sour people on the idea of a regional computing center. It's a strong idea. It merits the attention and dedication of those who want to do things right to benefit us all," said SLONET director Susan Coward.
And many want to see Brownlee punished for his actions.
"If he's not doing what he says with the money," Gannon said, "then he should go to jail."
Steven T. Jones is a New Times staff writer.