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Last month, the Latino-American Festival celebrated its silver anniversary in carnival style. Tens of thousands of fiesteros thronged Pennsylvania Avenue on July 29 and 30, reveling in “Lo Mejor De Los Nuestro”—“The Best of What’s Ours.” Pupusas and paella were plentiful, and the beer flowed freely. Popular bands—the Barrio Boyzz, Olga Tañon, El Grupo Niche, Alvarro Torres, and El Grupo Alegria—played their intoxicating rhythms, and when the DJ screamed “Vivá la Raza Latina”—“Long Live the Hispanic Race”—the crowd cheered wildly.

But what many spectators didn’t realize is that the 25th Latino-American Festival was, like its recent predecessors, a financial fiasco. English-language papers don’t have the contacts or the cojones to report it, and the Spanish-language papers are loath to air dirty laundry, but the fact remains: Within the Hispanic community, the festival is renowned for mismanagement and organizational infighting. In 25 years, the festival has never made a profit. Last year alone, the festival accrued a deficit of $70,000.

When the receipts and bills from this year’s event are finally tallied, that 1994 shortfall may look like peanuts. Lacking sponsors and kiosk rentals, festival president Eduardo Peña Jr. admitted to El Pregonero two days before the 1995 fiesta that “up until yesterday, we didn’t know if we would have to cancel or not.” The festival did take place, but only 158 of the 250 kiosks constructed were rented. One of the best-known performers, Gerardo of “Rico Suave” fame, stormed off the stage in disgust over the poor quality of the sound system. The D.C. government asked festival organizers to pony up a “voluntary donation” of $300,000 to cover police overtime, garbage disposal, and other costs. The festival, which had budgeted only $10,000 for trash and nothing for cops, found itself saddled with $290,000 in unanticipated expenses, on top of an $80,000 debt carried over from past years. According to some festival participants and longtime observers, this massive liability places future festivals in jeopardy.

The decline of the Latino-American Festival is the story of how a fabulous neighborhood block party became a troubled national celebration. The festival succeeded marvelously during its first two decades. Founded in 1971 by community organizers and a local Catholic priest, the festival allowed the growing Hispanic population of D.C. to showcase its culture. Held at 18th Street and Columbia Road NW, the festival became the summer event in the Latino community. Families of new immigrants sold food and wares from small kiosks, and thousands danced and ate in the streets of Adams Morgan.

By 1989, the festival had grown too large for Adams Morgan, and city officials ordered the party to relocate to the Mall, which could better handle the crowds. The grand location made the organizers ambitious. They forgot the neighborhood and touted the festival as the national celebration of Hispanic culture. Despite the hype, attendance at the Mall was far lower than anticipated. In 1990, the festival lost $25,000 dollars. Poor trash disposal left the Mall littered with refuse, forcing the National Park Service to spend thousands of federal dollars on cleanup. The park service paid the festival back, banishing it from the Mall in 1991. City officials came to the rescue and allowed organizers to erect their booths and bandstands on Pennsylvania Avenue.

But the difficulties on the Mall foreshadowed troubles to come. Community organizers, accustomed to a neighborhood party, were overwhelmed by the logistics of a national festival. (In fact, Miami’s nascent Calle Ocho festival, sponsored by that city’s wealthy Cuban-American community, has overshadowed the Latino-American Festival and become the national Hispanic celebration.)

Since its departure from Adams Morgan, the festival hasn’t attracted enough corporate donations or rented enough kiosks to stay out of the red. When the festival was in the neighborhood, families and small businesses could afford the kiosk fees. But organizers raised the price to cover operating costs as the festival expanded. Now each kiosk rents for $900—out of reach to all but restaurants and larger organizations.

At the same time, infighting among organizers drove well-funded sponsors away. According to Carlos Caban, the managing editor of El Tiempo Latino, who attended organizing meetings, debates over such mundane issues as which float kicked off the parade devolved into fistfights. In 1993, the squabbling among the festival’s organizers made the antics on Melrose Place seem downright banal. Longtime sponsor Radio Borinquen yanked its support, claiming that the election to decide the festival’s new president was fixed in favor of Jose Sueiro, publisher of La Nacion. The delegations from Washington’s Guatemalan, Costa Rican, Dominican, Honduran, and Puerto Rican communities also boycotted the festival. Eventually, leaders of various factions began accusing each other of drunkenness and pimping. Then the festival blew $100,000 on a poorly attended party in the D.C. armory.

The chaos scared off the Washington Post, which had donated $20,000 in previous years, and other corporate sponsors. To make matters worse, everyone who worked the event—including the carpenters who built the kiosks—began demanding cash up front, since the festival had developed a reputation for paying vendors late, sometimes even stiffing them.

Peña promised to professionalize the event when he replaced Sueiro as president of the festival in 1994. He invited ambassadors from Hispanic countries to share in the planning process, patched up the rift with Radio Borinquen, and attracted support from the World Bank and other large organizations.

But the 1994 festival repeated many of the mistakes of the past. Construction of the kiosks wasn’t completed until midway through the two-day affair. A consultant hired to find $300,000 in sponsors came up with only $20,000.

After the troubles of the last two years, Peña says he hopes to improve long-term planning, but adds, “I am only one person.”

“We don’t have a stable group of people who are responsible to build the festival. We haven’t been able to establish festival community,” Peña says. “Everyone owns it and nobody owns it.”

Peña says he is trying to lure back former sponsors such as the Post. “They are participating in a small way. Last year they had a kiosk. This year they’re going to be more involved. Gradually we’re going to get them back.” (According to Eduardo Perdomo, the festival’s vice president, this year the Post donated $10,000, twice as much as they gave in 1994, but still not as much as they gave in years past.)

Other businesses have spurned Peña’s advances. “Frankly, I’m disappointed with local businesses such as Pepco and [Washington Gas]. They don’t provide anything back in the community. They rarely reach out to the Hispanic community, despite the large amount of business they get from us.”

But it’s not utilities he should worry about. It’s the festival’s rank and file. The disarray of the past few years is taking a toll on participants. Even Latino businesspeople are growing frustrated with their fair. “I wake up at 3 a.m. on Sunday to prepare everything—for nothing. I lost money that I was saving to visit my sick mother in El Salvador,” complains Adela Vídez, who’s been selling Salvadoran food at the festival for years. “I won’t return. We go there with the illusion of making money and we end up losing what we have.”