Social Entrepreneur blog for the world changers
legal
Nonprofit Sues California Over Teacher Tenure Laws
May 16th
A nonprofit education group is suing the state of California over five laws they say protect ineffective teachers and lower school quality for poor children.
Los Angeles-based Student Matters filed the lawsuit today with the goal of getting the laws overturned, according to a report on KQED News. The laws in question set up a seniority system for public schools in the state.
According to the organization's website, Student Matters is "committed to ensuring that all of California’s children receive a quality education." It is run by David F. Welch, an executive at a Silicon Valley fiber-optic communications firm.
Josh Pechtalt, president of the California Federation of Teachers, said in a statement that the lawsuit is "misguided," and that the real problems of public education stem not from teachers, but from money.
"The real problems of public education really are not about teachers having due process rights," he said, "the problems have to do with massive cuts to the classroom, and frankly defunding of public schools now for a number of years."
You can read the full story on KQED's website.
Los Angeles-based Student Matters filed the lawsuit today with the goal of getting the laws overturned, according to a report on KQED News. The laws in question set up a seniority system for public schools in the state.
According to the organization's website, Student Matters is "committed to ensuring that all of California’s children receive a quality education." It is run by David F. Welch, an executive at a Silicon Valley fiber-optic communications firm.
Josh Pechtalt, president of the California Federation of Teachers, said in a statement that the lawsuit is "misguided," and that the real problems of public education stem not from teachers, but from money.
"The real problems of public education really are not about teachers having due process rights," he said, "the problems have to do with massive cuts to the classroom, and frankly defunding of public schools now for a number of years."
You can read the full story on KQED's website.
Tea Party Group Ruled A PAC, Not Nonprofit
Mar 29th
A Texas judge ruled that a Tea Party group is not a nonprofit as it claims but an unregistered political action committee (PAC).
Judge John Dietz of the Travis County District Court made his ruling based on a lawsuit the Texas Democratic Party filed against the King Street Patriots in 2010, according The Houston Chronicle. The suit alleged the organization made illegal contributions to the Republican Party and trained poll-watchers in cooperation with GOP candidates.
All of these actions would violate laws governing nonprofit political groups, which is what the King Street Patriots claimed they were. The organization was founded in 2009 with one of its main issues being voter fraud. The group reviewed public information of voter registration during the 2010 elections, and reported those findings to the county registrar. They also trained hundreds of poll watchers to look for potential fraud.
The ruling would force the King Street Patriots to reveal its list of funders. They would, however, be allowed to participate in partisan activities. The Liberty Institute, a nonprofit legal firm based in Plano, Tex. that represents the King Street Patriots, says they plan to appeal the Judge's ruling.
The NonProfit Times recently published a story on how the IRS is monitoring political groups like the King Street Patriots to see if they are adhering to rules governing nonprofits.
You can read the full story in The Houston Chronicle.
Judge John Dietz of the Travis County District Court made his ruling based on a lawsuit the Texas Democratic Party filed against the King Street Patriots in 2010, according The Houston Chronicle. The suit alleged the organization made illegal contributions to the Republican Party and trained poll-watchers in cooperation with GOP candidates.
All of these actions would violate laws governing nonprofit political groups, which is what the King Street Patriots claimed they were. The organization was founded in 2009 with one of its main issues being voter fraud. The group reviewed public information of voter registration during the 2010 elections, and reported those findings to the county registrar. They also trained hundreds of poll watchers to look for potential fraud.
The ruling would force the King Street Patriots to reveal its list of funders. They would, however, be allowed to participate in partisan activities. The Liberty Institute, a nonprofit legal firm based in Plano, Tex. that represents the King Street Patriots, says they plan to appeal the Judge's ruling.
The NonProfit Times recently published a story on how the IRS is monitoring political groups like the King Street Patriots to see if they are adhering to rules governing nonprofits.
You can read the full story in The Houston Chronicle.
Nonprofit Director Sentenced In Child Porn Case
Mar 29th
The founder and former director of a San Francisco, Calif.-based nonprofit was sentenced to six years in prison for possession of child porn. He will begin serving his sentence on May 8.
Anthony Josef Morris, who was the head of Kids Serve Youth Murals, was also ordered to pay $6,500 in restitution by U.S. District Judge Richard Seeborg, according to Mill Valley Patch. That money will be distributed among the victims identified in Norris's collection. He pleaded guilty in November to one count of possession of child pornography.
U.S. Attorney Melinda Haag said that during his plea, Norris admitted to possessing more than 600 images on his computer of kids engaging in sexual acts with adults. These included horrific images of children being subjected to sexual assault. Norris was arrested in June of last year, in a story that was reported by NPTtv, after FBI agents discovered he had posted some of his images online. Those postings were then traced back to Norris's home computer.
Even more disturbing, San Francisco United School District officials said they found other offensive images hidden in tiles in at least three of the murals his organization created for schools and other sites across the city. Those images were quickly removed by the school district.
You can read the full story in Mill Valley Patch.
Anthony Josef Morris, who was the head of Kids Serve Youth Murals, was also ordered to pay $6,500 in restitution by U.S. District Judge Richard Seeborg, according to Mill Valley Patch. That money will be distributed among the victims identified in Norris's collection. He pleaded guilty in November to one count of possession of child pornography.
U.S. Attorney Melinda Haag said that during his plea, Norris admitted to possessing more than 600 images on his computer of kids engaging in sexual acts with adults. These included horrific images of children being subjected to sexual assault. Norris was arrested in June of last year, in a story that was reported by NPTtv, after FBI agents discovered he had posted some of his images online. Those postings were then traced back to Norris's home computer.
Even more disturbing, San Francisco United School District officials said they found other offensive images hidden in tiles in at least three of the murals his organization created for schools and other sites across the city. Those images were quickly removed by the school district.
You can read the full story in Mill Valley Patch.
Group Behind Controversial Calendar Shuts Down
Mar 22nd
A Denver, Co.-based organization has agreed to cease its operations after reaching a settlement with the state over whether the group was really a nonprofit.
Fired Up For Kids would transfer all of its assets to a new group, according to a report on TheDenverChannel.com. The group got in hot water with Colorado's Office of the Attorney General over its sale of firefighter calendars. It's website stated that all proceeds from the calendars would go to The Children's Hospital Burn Center, and it's pamphlets presented Fired Up For Kids as a nonprofit.
The Attorney General's office saw things much differently.
In December 2011, the state filed a lawsuit against Fired Up For Kids alleging the group operated as a for-profit business despite the fact that it had registered as a nonprofit. Prosecutors also accused the organization's owner, Kirsten Hamling, of using company accounts and assets for personal uses, including airline tickets and gym memberships. Hamling defended herself after the lawsuit was fired, saying that the donations to the hospital were voluntary and that she was "in no way contractually obligated" to give money to the hospital.
In the end, it appears Hamling decided it was a better course to settle rather than fight the lawsuit.
Assets for the now dissolved Fired Up For Kids will go to a new organization, Colorado Firefighter Calendar, Inc. Proceeds from the calendar will still go to the Children's Hospital Burn Center, in addition to promoting fire safety and awareness.
You can read the full story on TheDenverChannel.com.
Fired Up For Kids would transfer all of its assets to a new group, according to a report on TheDenverChannel.com. The group got in hot water with Colorado's Office of the Attorney General over its sale of firefighter calendars. It's website stated that all proceeds from the calendars would go to The Children's Hospital Burn Center, and it's pamphlets presented Fired Up For Kids as a nonprofit.
The Attorney General's office saw things much differently.
In December 2011, the state filed a lawsuit against Fired Up For Kids alleging the group operated as a for-profit business despite the fact that it had registered as a nonprofit. Prosecutors also accused the organization's owner, Kirsten Hamling, of using company accounts and assets for personal uses, including airline tickets and gym memberships. Hamling defended herself after the lawsuit was fired, saying that the donations to the hospital were voluntary and that she was "in no way contractually obligated" to give money to the hospital.
In the end, it appears Hamling decided it was a better course to settle rather than fight the lawsuit.
Assets for the now dissolved Fired Up For Kids will go to a new organization, Colorado Firefighter Calendar, Inc. Proceeds from the calendar will still go to the Children's Hospital Burn Center, in addition to promoting fire safety and awareness.
You can read the full story on TheDenverChannel.com.
Former Nonprofit Exec Dies After Indictment
Mar 21st
A former chief financial officer (CFO) of an Austin, Tex.-based nonprofit died only days after she was indicted for theft.
According to The American-Statesman, Mary Ann Hernandez, 58, was charged with funneling more than $100,000 from Austin Resource Center for Independent Living Inc (ARCIL) to her personal credit card accounts from 2005 to 2009. She was arrested hours after her indictment on March 1 and was released after posting $250,000 bail. Authorities said she died on March 6. The cause of her death is unknown pending the results of an autopsy.
The indictment charged Hernandez of two felonies: One count of misapplication of fiduciary property with a value of $100,000 or more but less than $200,000 and another count of theft of $200,000 or more but less than $100,000. These all stemmed from accusations that, between March 2, 2005, and Jan. 30, 2009, she allegedly transferred checks from ARCIL's Bank of America account to make payments on her Visa credit card accounts.
The investigation of Hernandez started after the state auditor's office was contacted by the Department of Housing and Community Affairs, which had contracted with ACRIL from 2005 to 2009 to provide rental assistance to disabled people. The accusations against Hernandez were also reported in an earlier edition of NPTtv.
With their only suspect now gone, prosecutors are discussing whether to dismiss the case. Jason Knutson, an assistant district attorney with the state's Public Integrity Unit, told The American-Statesman that she was in charge of all the money as CFO, so they have no reason to believe anybody else was involved.
You can read the full story in The American-Statesman.
According to The American-Statesman, Mary Ann Hernandez, 58, was charged with funneling more than $100,000 from Austin Resource Center for Independent Living Inc (ARCIL) to her personal credit card accounts from 2005 to 2009. She was arrested hours after her indictment on March 1 and was released after posting $250,000 bail. Authorities said she died on March 6. The cause of her death is unknown pending the results of an autopsy.
The indictment charged Hernandez of two felonies: One count of misapplication of fiduciary property with a value of $100,000 or more but less than $200,000 and another count of theft of $200,000 or more but less than $100,000. These all stemmed from accusations that, between March 2, 2005, and Jan. 30, 2009, she allegedly transferred checks from ARCIL's Bank of America account to make payments on her Visa credit card accounts.
The investigation of Hernandez started after the state auditor's office was contacted by the Department of Housing and Community Affairs, which had contracted with ACRIL from 2005 to 2009 to provide rental assistance to disabled people. The accusations against Hernandez were also reported in an earlier edition of NPTtv.
With their only suspect now gone, prosecutors are discussing whether to dismiss the case. Jason Knutson, an assistant district attorney with the state's Public Integrity Unit, told The American-Statesman that she was in charge of all the money as CFO, so they have no reason to believe anybody else was involved.
You can read the full story in The American-Statesman.
Nonprofit CFO Accused Of Embezzlement
Mar 14th
A top executive of a Bronx, N.Y.-based nonprofit was indicted by the state Attorney General's Office for allegedly stealing thousands of dollars from the organization.
The New York Post reported today that Clement Gardner, who was the chief financial officer (CFO) of the Christian Community Benevolent Association (CCBA), allegedly embezzled at least $75,000 dollars in funds. The indictment alleges that Gardner wrote the checks to himself from 2004 to 2007, writing false memo lines to cover himself. State Attorney General Eric Schneiderman announced yesterday that his office launched the corruption probe after getting a referral from the FBI.
The indictment of Gardner is the first result from an ongoing probe of nonprofits with ties to state lawmakers. CCBA was previously run by Bronx state Sen. Ruben Diaz Sr., who steered $500,000 in state grants to the nonprofit.
Gardner is currently being held without bail as he awaits a hearing. He has claimed he wrote the checks because he was not being paid for the work he was doing for CCBA. You can read the full story in The New York Post.
Investigators: Nonprofit Faked Job Placements
Mar 12th
A nonprofit hired by New York City to help residents find jobs falsified 1,400 job placements, according to NYC investigators.
ABC News reported Saturday that Seedco, which operates in 14 states and Washington, D.C., used data from past and current clients to falsely claim they had placed the individuals in jobs. The NYC Department of Investigation claims the organization also claimed credit for placing people in jobs they'd lost before they sought help. The city's investigation found 1,400 false claims from 2010 to 2011, but there could be many more because of the city law permitting the shredding of documents.
City officials first learned of the allegations against Seedco in an August column in The New York Times. The matter was quickly referred to investigators after the article was published. The nonprofit's $22.2 million contracts with NYC are to be reassigned over the next two months.
Barbara Dwyer Gunn, president and CEO of Seedco, said in a statement that they "deeply regret" what happened at the local Workforce1 centers which they ran. She said the organization fired the employees responsible and implemented policy changes to ensure their data is accurate.
You can read the full story in ABC News.
ABC News reported Saturday that Seedco, which operates in 14 states and Washington, D.C., used data from past and current clients to falsely claim they had placed the individuals in jobs. The NYC Department of Investigation claims the organization also claimed credit for placing people in jobs they'd lost before they sought help. The city's investigation found 1,400 false claims from 2010 to 2011, but there could be many more because of the city law permitting the shredding of documents.
City officials first learned of the allegations against Seedco in an August column in The New York Times. The matter was quickly referred to investigators after the article was published. The nonprofit's $22.2 million contracts with NYC are to be reassigned over the next two months.
Barbara Dwyer Gunn, president and CEO of Seedco, said in a statement that they "deeply regret" what happened at the local Workforce1 centers which they ran. She said the organization fired the employees responsible and implemented policy changes to ensure their data is accurate.
You can read the full story in ABC News.
Nonprofit Exec Testifies In Corruption Trial
Feb 17th
The former executive director of a Pennsylvania-based nonprofit testified yesterday in the corruption trial of the organization's founder, ex-congressman Mike Veon.
The Tribune-Review reported today that John Gallo, who was executive director of the Beaver Initiative for Growth (BIG), testified that he knew there was trouble for the nonprofit when he discovered checks written in its account that had no connection to the organization. Gallo was the first witness in the case against Veon, who is accused, along with co-defendant Annamarie Perretta-Rosepink, of theft-related offenses and conflict of interest. The two are also accused of funneling $10 million in state grants to BIG.
Before being ousted in 2006, Veon was a Democratic power broker from Beaver Falls, Pa. He is currently serving a 14-year prison sentence for previous corruption charges, and faces 19 felonies in the BIG case. Perretta-Rosepink faces six theft-related counts.
Gallo told the jury that he first found the suspect checks after returning from a month's leave. The checks were written by Perretta-Rosepink and included a $5,000 payment to the late Rep. Terry Van Horne, who had no association to BIG, and payments to a legislative office in Midland. Veon's lawyer, Joel Sansone, accused Gallo of stealing money from the organization, citing numerous expenses for flat amounts, such as $400 and $150. Gallo denied those claims, but acknowledged he could not remember all of the nonprofit's expenses.
Prosecutor Deputy Attorney General Laurel Brandstetter told the jury that Sansone's allegations were "baseless," and accused Veon of using BIG money not to bolster the local economy, but to pay his legislative chief of staff and his law firm for consulting services, among other things.
The trial will resume on Tuesday. You can read more about it in The Tribune-Review.
The Tribune-Review reported today that John Gallo, who was executive director of the Beaver Initiative for Growth (BIG), testified that he knew there was trouble for the nonprofit when he discovered checks written in its account that had no connection to the organization. Gallo was the first witness in the case against Veon, who is accused, along with co-defendant Annamarie Perretta-Rosepink, of theft-related offenses and conflict of interest. The two are also accused of funneling $10 million in state grants to BIG.
Before being ousted in 2006, Veon was a Democratic power broker from Beaver Falls, Pa. He is currently serving a 14-year prison sentence for previous corruption charges, and faces 19 felonies in the BIG case. Perretta-Rosepink faces six theft-related counts.
Gallo told the jury that he first found the suspect checks after returning from a month's leave. The checks were written by Perretta-Rosepink and included a $5,000 payment to the late Rep. Terry Van Horne, who had no association to BIG, and payments to a legislative office in Midland. Veon's lawyer, Joel Sansone, accused Gallo of stealing money from the organization, citing numerous expenses for flat amounts, such as $400 and $150. Gallo denied those claims, but acknowledged he could not remember all of the nonprofit's expenses.
Prosecutor Deputy Attorney General Laurel Brandstetter told the jury that Sansone's allegations were "baseless," and accused Veon of using BIG money not to bolster the local economy, but to pay his legislative chief of staff and his law firm for consulting services, among other things.
The trial will resume on Tuesday. You can read more about it in The Tribune-Review.
Nonprofit Sues Tax Collector Over Public Records Request
Feb 16th
A Florida based nonprofit is suing a Palm Beach tax collector for refusing to release public records of a $1.9 million settlement her office reached with over a dozen online travel companies.
The Palm Beach Post reported yesterday that Citizens for Sunshine, a government watchdog group based in Sarasota, Fla., had sent a member to the office of Palm Beach tax collector Anne Gannon to inspect the document, but was denied access by Gannon's staff. These types of legal settlements are usually considered fair game under public records law, but Gannon's office says it can't release the documents until it notifies the attorneys of the travel companies.
Citizens for Sunshine disagrees, saying the public has a constitutional right to see the documents, and has asked a circuit court judge to order Gannon to release the records. Additionally, the nonprofit wants reimbursement for their legal fees. Gannon told The Palm Beach Post that she plans to release the documents on Tuesday. Additionally, she said she was not aware of the group's initial request.
The documents in question reflect a settlement that ended a lawsuit that Gannon filed in 2009 that alleged that certain travel companies, including Expedia, Orbitz, and Travelocity, were not giving the county all of the tourism taxes they collect from the hotel rooms they book. The was for $1.9 million, nearly $1.3 million of which will be used to pay tourism-related expenses.
You can read the full story in The Palm Beach Post.
The Palm Beach Post reported yesterday that Citizens for Sunshine, a government watchdog group based in Sarasota, Fla., had sent a member to the office of Palm Beach tax collector Anne Gannon to inspect the document, but was denied access by Gannon's staff. These types of legal settlements are usually considered fair game under public records law, but Gannon's office says it can't release the documents until it notifies the attorneys of the travel companies.
Citizens for Sunshine disagrees, saying the public has a constitutional right to see the documents, and has asked a circuit court judge to order Gannon to release the records. Additionally, the nonprofit wants reimbursement for their legal fees. Gannon told The Palm Beach Post that she plans to release the documents on Tuesday. Additionally, she said she was not aware of the group's initial request.
The documents in question reflect a settlement that ended a lawsuit that Gannon filed in 2009 that alleged that certain travel companies, including Expedia, Orbitz, and Travelocity, were not giving the county all of the tourism taxes they collect from the hotel rooms they book. The was for $1.9 million, nearly $1.3 million of which will be used to pay tourism-related expenses.
You can read the full story in The Palm Beach Post.
The Case Of The Disappearing Donations
Feb 14th
The Los Angeles Times wrote today that 200 nonprofit groups have reported that all of their donated funds have vanished after the organization that watched over the money, the International Humanities Center, shut down last month. While the closing of the operation may have come as a bit of a surprise, it was a bigger shock when many of its clients found they were missing hundreds of thousands of dollars.
Directors at 40 of the nonprofits affected have tallied their potential losses at $877,000. The California attorney general's office is currently investigating the matter.
The nonprofits that used the International Humanities Center were mostly small organizations that didn't have the resources to handle the donations and their related paperwork. The center acted as a financial services organization and handled all of this work for a small fee.
Steve Sugarman, the center's executive director, assured his clients in an e-mail that their funds had been spent appropriately. This set off a bit of a red flag because fiscal sponsors are not supposed to spend a client's money for its own reasons. When pressed on this, a consultant for the center, David DelGrosso, told nonprofits that their donations were used to pay legal fees and other bills, but he had been assured those funds would be replaced. This consultant also said that the center had wasted project funds on a scam e-mail campaign. This scam cost the center $200,000, and was a big factor in its downfall.
For now, many of the affected nonprofits are unable to pay their staffs or bills. Some of them have little hope that they will ever see the money again, and have explained the situation to their donors. This case is a perfect example of how careful nonprofits need to be when handing their funds over to third party.
You can read the full story in The Los Angeles Times.
Directors at 40 of the nonprofits affected have tallied their potential losses at $877,000. The California attorney general's office is currently investigating the matter.
The nonprofits that used the International Humanities Center were mostly small organizations that didn't have the resources to handle the donations and their related paperwork. The center acted as a financial services organization and handled all of this work for a small fee.
Steve Sugarman, the center's executive director, assured his clients in an e-mail that their funds had been spent appropriately. This set off a bit of a red flag because fiscal sponsors are not supposed to spend a client's money for its own reasons. When pressed on this, a consultant for the center, David DelGrosso, told nonprofits that their donations were used to pay legal fees and other bills, but he had been assured those funds would be replaced. This consultant also said that the center had wasted project funds on a scam e-mail campaign. This scam cost the center $200,000, and was a big factor in its downfall.
For now, many of the affected nonprofits are unable to pay their staffs or bills. Some of them have little hope that they will ever see the money again, and have explained the situation to their donors. This case is a perfect example of how careful nonprofits need to be when handing their funds over to third party.
You can read the full story in The Los Angeles Times.
Recent Comments