Hammered by Critics, NAACP May Face Suit

THE nation's oldest civil rights group, facing a major financial crisis and now a potentially divisive lawsuit, is struggling to refashion itself into an organization more relevant to blacks -- especially youths.

At its annual meeting starting today in New York, the National Association for the Advancement of Colored People (NAACP) will be trying to regain some of the luster that made it a symbol of justice for blacks in the 1960s. The meeting comes at a critical moment, as the NAACP faces unprecedented internal problems and questions about its focus as the nation turns rightward.

Now the Monitor has learned that NAACP's largest branch has decided to sue the organization's national headquarters. In papers expected to be filed by today, the Detroit branch is charging the Baltimore head office and the board of directors with libel, financial mismanagement, and other misdeeds, says Sharon McPhail, a lawyer and treasurer of the Detroit NAACP.

''We've paid them $2.5 million over the past 10 years and where's the beef?'' asks Ms. McPhail, a 1993 candidate for the Detroit mayoralty. ''Frankly, we're just kind of tired of paying them money to do nothing.'' The Detroit branch has 55,000 members, or more than 10 percent of the total NAACP membership.

The class-action suit, which other local NAACP offices may join, asks for unspecified damages as well an accounting of past expenses.

The legal action comes at a time when financial difficulties have left the NAACP with an estimated deficit of $4 million and many donors are wary of helping out. Part of this reluctance can be blamed on former NAACP executive director Benjamin Chavis Jr., who was fired in August after revealing the deficit and admitting he had agreed to pay as much as $334,000 of NAACP money to settle a sexual-harassment claim.

Some NAACP officials, unhappy with their leadership, last month petitioned a federal court in Baltimore to order an audit of the organization's financial records. A branch suing the national office, however, is unprecedented, says interim NAACP director Earl Shinhoster, who defends the national office's financial record.

''There have been no findings whatsoever of any mismanagement, misappropriation, or anything of that nature, so I cannot conceive of what basis upon which a perceived award might be made on such charges,'' he says.

The NAACP, which has about half a million members in 2,200 branches, will have a chance to sort out its finances and chart a new future at its board meeting. On the top of its agenda: a vote, expected Saturday, on ousting current chairman of the board William Gibson, who has been accused of financial impropriety.

Many black leaders are hopeful that the organization can reform itself and become more relevant to African-Americans, especially young people who know little about the NAACP's past glories.

''I don't think it's the death knell of the organization,'' says Leon Finney Jr., a lifetime NAACP member and chairman of the Woodlawn Organization, a Chicago community group. ''Did Watergate kill the Republican Party? No.''

YET money is not the NAACP's only problem. Some say it lost its way after the victorious civil rights battles of the 1960s.

''Those victories left the civil rights movement at a crossroads, some people say a crisis of victory,'' says Daryl Harris, a political scientist at the University of Connecticut. ''The organization was left with the question of 'where do we do from here?' in terms of strategies and tactics, and that hasn't been resolved yet.''

McPhail, whose dismay at the NAACP's disarray sparked the lawsuit, says that the national organization should be the leading voice for African-Americans. ''That's the problem -- that black America doesn't have anybody that's speaking for it anymore,'' she says.

Many black leaders say the key to a more effective NAACP is greater leadership in the problems of the inner city, such as education, crime, drugs, and jobs.

Yet the NAACP is divided between a newer group of leaders who want to tackle inner-city woes and a more conservative old guard weaned during the struggles with segregation, says Ronald Walters, a political scientist at Howard University in Washington, D.C.

''The organization at the moment is not that relevant, because it's going through a leadership crisis and part of that is a crisis of direction,'' he says.

Another task ahead for the NAACP is winning over younger African-Americans. ''That becomes a marketing issue,'' says Rev. Preston Washington, president of Harlem Congregations for Community Improvement in New York. ''The NAACP needs to identify some rap stars; they need to have, you know, ongoing meetings with groups of young people.''

Former executive director Chavis made some moves in bringing young people to the organization and broadening the NAACP's goals, but ultimately his misdeeds overshadowed these accomplishments, observers say.