Right-Wing Nonprofit Lavishes Millions on Top Brass

[Celerity]

The American Conservative Union dished out millions to two board members and, according to experts, appears to have left critical information off its IRS forms.

https://www.thedailybeast.com/right-wing-nonprofit-lavishes-millions-on-top-brass



The American Conservative Union touts itself as “the nation’s original conservative organization” and loves to rail against “reckless spending”—but it’s hardly cautious about turning over supporters’ cash to its own top executives. The ACU, best known as the group behind the annual Conservative Political Action Conference, or CPAC, has enriched companies belonging to two of its directors to the tune of $4 million in the past five years, according to a review by The Daily Beast of their yearly tax forms and other required filings. This cash has poured out of the ACU’s own coffers, out of its political committees, and straight from the pockets of the right-wing rank and file into firms controlled by Vice Chairman Charlie Gerow—now a candidate for governor of Pennsylvania—and Kimberly Bellissimo, secretary of the ACU’s foundation. The ACU insisted to The Daily Beast that it selected the vendors purely on merit, and complied with all relevant rules and regulations. “We take our fiduciary responsibilities seriously and work to ensure all compliance is adhered to, operating above board with the full backing of the board of directors,” spokeswoman Regina Bratton wrote in an email. “ACU requires all such contracts to be disclosed to our Board and all disclosures to be made as required by law.”

But the legal experts and ethics advocates The Daily Beast consulted for this story questioned whether the ACU had really conducted a thorough search to identify the most capable and cost-effective contractors to accomplish the organization’s aims—and expressed bafflement at apparently missing and misplaced information on the organization’s disclosures to the Internal Revenue Service. “As a nonprofit organization you have a duty to the people who are funding the organization's mission to basically give them confidence in your stewardship of the money they are giving you,” said Robert Maguire, research director for the watchdog group Citizens for Responsibility and Ethics in Washington. “The best way to avoid conflicts of interest is to have rules that bar people who work for the organization or sit on the board of the organization from getting large contracts that the organization is giving out.” A total of $153,315 has flowed from the ACU to Quantum Communications, a Harrisburg, Pennsylvania, firm registered in Gerow’s name and where he serves as CEO. The payments to Gerow began only in the last two years, despite his having held a leadership position at ACU for over a decade, according to his LinkedIn profile. Of this, $128,318 came in a single disbursement from the group’s foundation in 2019, tax records show.

Marcus Owens, an attorney who previously directed the IRS’s charities division, noted that despite this payment the ACU answered “no” to a series of questions on its federal 990 form about whether it had hired any company in which one of its directors held a position or interest. He pointed out that the group had attested to the honesty of its reports to the IRS under penalty of perjury, and that leaving that information off could bring down civil and even criminal consequences. “It certainly sounds like that’s the sort of relationship that should trigger disclosure in at least one place in the return,” he said. “If they answered that question incorrectly, and they are doing business with firms in which the officers, directors, and key employees have an ownership interest or are themselves officers and directors of those other firms, it’s difficult to say that isn’t material.” Federal Election Commission filings, meanwhile, show one of the ACU’s political committees paid Quantum $25,000 in 2020. Gerow refused to discuss his firm’s dealings with the ACU at any length with The Daily Beast, nor would he point to where the organization properly disclosed his role at Quantum. “We file all sorts of conflict forms,” he said. "I understand where you’re coming from, but it’s all done appropriately, correctly, legally, and completely.”

However, Bratton—the ACU spokeswoman—conceded that the group had left information off its 2019 filing. But she added that it had recently submitted an amendment to correct the omission. Further, she asserted Gerow was the best-qualified professional to help the group “bring Trump-style criminal justice reforms to Pennsylvania.” Gerow has since pointed to his work on criminal justice issues as proof he could build consensus as governor of Pennsylvania. Joan Harrington, an attorney who heads the social sector ethics department at Santa Clara University’s Markkula Center for Applied Ethics, said this raised special concerns since he was paid through the ACU Foundation, which enjoys a special tax status dependent on its abstaining from electoral campaigns. She said it was possible that the Foundation’s payment to Quantum was “clean”—that is, decided upon without Gerow’s input and after the board had researched and determined the firm offered the absolute best value of any in the market. But she worried that donors, and members of the public who indirectly subsidize the groups through its tax exemption, are left unaware of the various relationships between ACU and its vendors. "Everybody is intertwined and getting money from different places, and you and I cannot figure out what is going on,” Harrington said. “If it’s not transparent to the public how money is flowing to these organizations and companies, that's concerning.”

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[Kid Berwyn]

1. Quantum Communications for ever.

As they don’t make a blip on Charity Navigator, it be best to lock them up that long.

[Champp]

2. "We depend on the kindness of suckers." - Republicans, Inc.