Bogus Charge?: Thomas Accused of Running Fake Nonprofit

Today's Washington Post includes reports on the back of the Metro page that Ward 5 Councilmember Harry Thomas has been accused of his Republican opponent of running a fake nonprofit, Team Thomas/SwingAway LLC, for his own "slush fund."

I'm no fan of Harry Thomas, but these charges by Tim Day, an accountant who is challenging Thomas in the Nov. 2 general election, strike me as supreme B.S.  Day's evidence:

• Thomas's organization is not registered as a 501(c)(3) with the IRS.  As an accountant, Day should probably not make the common error of confusing a nonprofit with a 501(c)(3).  "Nonprofit" is just a type of incorporation, which is registered with a state/DC government.  Nonprofits are not necessarily 501(c)(3)s, to which individuals can make tax deductible donations.  To become a 501(c)(3), a nonprofit must go through what can be a lengthy process with the IRS and agree to certain restrictions and reporting requirements.
• Thomas's organization has not disclosed who donated to the organization and how the money has been spent.  So what?  Nonprofit organizations, like for-profit companies, have no obligation to publish their financial records to the world.  As a 501(c)(3), the organization would have to provide limited information in public filings, including how much was raised (but not the identity of donors), the salaries of top employees, and payments to largest contractors.  But Thomas's organization is not a 501(c)(3).
• Thomas's organization is not in good standing with the Department of Consumer and Regulatory Affairs.  Join the club.  There are lots of small nonprofits organizations, that largely rely on volunteers, who overlook submitting paperwork and later correct it.  It's not as a crime.
• And just to throw it in -- Day makes an unrelated accusation that Thomas's wife worked on his campaign and received a $4,500 fee as a consultant.  Another big "so what," particularly if she provided services to the campaign designing leaflets and brochure or otherwise.  It may be poor judgment to pay family members from campaign funds, but I'm missing the illegality or corruption.

Well, I guess Mr. Day got his day in the Post.  But his charges seem to hardly warrant even a back-page story.  A blog post... maybe.

City Workers Used On Campaigns

Below is an e-mail disseminated to neighborhood e-mail distribution lists by Joe Martin, a former Ward Service Coordinator for Mayor Adrian Fenty (and an excellent one, I might add).  Until recently, Joe continued to work in the Fenty Administration.  He serves as Chairman of Advisory Neighborhood Commission 4C in Petworth and is currently running for reelection.  Joe alleges widespread violations of the Hatch Act, which significantly restricts involvement of federal (and city) civil servants in political campaigns.

How large of a problem is this -- are these types of violations just a fact or life in the political world?  Federal workers -- would this happen in your agencies?


From: Joseph Martin
Subject: City Workers Being Used On Campaigns
Date: Thursday, October 14, 2010, 10:42 AM

I hope after the election the Hatch Act can be thoroughly revisited, vetted by the public and that we can find a better way to do things here in the District of Columbia.

The Federal Hatch Act covers DC government workers (in addition to federal workers).

While employees of the Executive Office of the Mayor were instructed by the Mayor's Ethics Attorney on how to follow the letter of the law, my interpretation of those sessions was that there was somewhat of a wink-wink, nod-nod element that I did not like at all. A variation of...

Never write when you can speak, never speak when you can nod, never nod when you can wink.

I know for fact that there were cases where staffers were called at 1:00 pm while sitting at their city-government desks and told that they needed to put in for leave immediately "do visibility" for "Emerald City" -- code for the Fenty Re-Election Campaign.

Tracy Sandler, executive director of Serve DC, said at one weekly staff meeting early in the summer, "I am waiting for everyone's leave slips." My interpretation of that might be different from others. This request was repeated in other weekly meetings.

Fun Fact: By her own admission at a staff meeting in early July, she acknowledged to me after I asked that she still is in places the voice of Barbie. Some of my coworkers referred to Tracy as "Barbie." I asked why.

"Do you want to hear my favorite line!" She exclaimed in front of all of us at that early, July staff meeting:

"Sometimes a girl's just got to wear a tiara!" 

Calls came in to Serve DC staffers, registered Republicans in three cases, at their desks during the work day asking them to work on the campaign. "We are not even Democrats and they want us to work on the Democratic primary."

Days before the Ward 4 straw poll, Sarah Latterner of EOM calling from her office in the Wilson Building and emailed me via government email demanding that I come up with a list of what the Mayor accomplished in Ward 4.

"You know what it's for," don't you?," she asked on the phone that morning.

"Your diary?," I replied.

"How soon can you get it to me? We need it now. We don't have any institutional knowledge left downtown. We're relying on you to help."

Weeks before that, Sinclair Skinner passed word through someone to me, "We need Joe's help in Ward 2."

I heard via private text messages that questions lingered about whether or not I was a "team player" (Team Fenty). I posted about this item weeks ago when I got a text message from ANC 4D Commissioner Bill Quirk asking me if it was true that I had been seen talking to Vincent Gray at a block party two blocks from my house. I know an Office of Aging employee who told me that she, too, received a text asserting that she was seen talking to Vincent Gray on Connecticut Avenue.

Before the Ward 4 straw poll the calls to me were intense, Terry Lynch of the Downtown Cluster of Congregations called me on my personal cell while I am sitting at my desk: "Are you forgetting what Mayor Fenty has done for this city!! You need to call me, Joe."

There were a few days where I put my two-year-old iPhone on "airplane mode" at my desk to block all calls so that I could attempt to focus on work at Serve DC in the Reeves Center.

As things looked grim heading towards the primary, I asked one Serve DC coworker how her weekend went.

"I didn't have a weekend. I volunteered for Emerald City, knocking on doors of registered Republicans in the Palisades asking them to switch their party affiliation so that they could vote for the Mayor in the primary."

Around the same time when I took a quick, weekday lunch at Busboys and Poets, Councilmember Jim Graham asked me as I was leaving, "Why aren't you out on the streets helping your boss?" I was with a city agency worker, a close friend, and his son. My reply to Mr. Graham, "You do know that I have work to do for my day job across the street in the Reeves Center, don't you?," as I nodded across the street towards the Reeves Center.

I told my city-agency friend who also disappeared from his job to work for Emerald City that I was more forgiving of people like him working on the campaign, taking last minute leave. "You have small children to feed. I know that. So does Team Fenty."

A friend who used to work in the Wilson Building for another City Councilmember remarked at lunch the day after I received Bill Quirk's text message, "The whole Wilson Building is a Hatch Act violation."

This needs to stop.

It seems incredibly disingenuous for those who effectively are signing your paychecks to ask you to "volunteer" on their campaigns.

According to one friend who had business friends who received the emails, Sarah Lasner, former deputy chief of staff who served as a key figure on Team Fenty, sent an email to business people telling them to take the week off before the September primary to "volunteer" on the campaign. She added something to the effect of redefining the word "volunteer" for them.

I often wondered what the result would be if there was some secret way of asking all incumbents' staffs whether or not they would be working or "volunteering" on a given campaign if they did not feel as if their jobs depended on it.

If your boss who signs your paycheck asks you to "volunteer" on her/his campaign, how does that make you feel? Where are the ethics in that?

If I seemed very stressed out this summer to a lot of my friends and neighbors, this is a hint of why.

I would like to see this system stopped. Am I a fool to think it's possible?

My oldest brother in Rhode Island snorts when I talk about this. "What were you expecting? This is city government.

It happens everywhere." I would joke back, "I still don't think it's asking too much to expect someday that the DC government will work with the efficiency and professionalism of FedEx or UPS, the entire government." If my brother had been texting instead of talking to me on the phone, I probably would have looked at my screen to read: LOL!!! LMAO!

My brother refuses to text.

"If I need to communicate with someone, I pick up the phone and call them."

Fixing Earmarks?

Aside from essentially placing his girlfriends on the payroll, the Mayor for Life gave thousands of dollars in earmarks to organizations connected to him in his Ward. According to a CityPaper investigation, Barry had a hand in creating and controlling the very organizations that received the money. In fact, some of the organizations were incorporated after they were slated to receive city money.

Barry made headlines because (1) he's Barry and (2) he’s brazen and blatant. Like Teflon, nothing seems to stick to the man. The fact is that many Councilmember use earmarks. Each year, millions of taxpayer dollars are given to politically-connected organizations. “Designated appropriations” are tucked away in budget legislation that the average citizen won’t be able to find. Usually, it is the Ward councilmember that inserts earmarks for organizations centered in his or her own ward.

There are legitimate questions as to what benefits some of these supposed one-time, no-bid grants produce for the taxpaying residents of the District.

Rest assured, Councilmembers benefit when re-election time arrives. Organizations whose programming or salaries are dependent on the cash infusion turn around and endorse the incumbent (unofficially through their individual leadership because they would jeopardize their tax exempt status should they do so as an organization), supply volunteers, and, in some cases, even hold lucrative fundraisers in support. For example, when I ran for the Ward 2 seat on the Council last year, I was shocked to find the Greater Washington Sports Alliance openly touting that it was hosting a VIP fundraiser for Councilmember Jack Evans because he had obtained a $500,000 earmark for the organization. Maybe that's not a quid pro quo, but it comes dangerously close.

During that period, which involved a similar surge in gang violence that we are experiencing now in Shaw, Mr. Evans held one of his “crime forums” At this one, he brought out the leadership of organizations such as Peaceoholics and the Alliance of Concerned Men to discuss their programs. (Peaceoholics received a $1 million for FY 2009 for anti-gang intervention and $500,000 in FY 2008 for mentoring). When residents plagued by gunfire despite the allocation of this money asked how this money was used, they were met with defensiveness and attacks from some members of the panel, and wholly nonresponsive answers. I've listed some of the crime-fighting, gang intervention-type organizations, but there are quite a few more. Would such money be better spent on more police officers, community college and vocational training, lengthening recreation center hours, or youth sports leagues?

Aside from anti-gang organizations, "big art" stands out as the other major recipient of earmark money in DC-- whether it's $10 million for Fords Theatre or millions to organizations such as the Washington Ballet and Washington Opera. The one-sentence explanations accompanying these outlays often states a purpose related to youth education and outreach. Who's against children? Well, given the amount we've been spending, taxpayers should expect DC's youth to be among the most cultured in the nation. Are they? Do deserving local artists and smaller organizations receive similar DC government support?

DC taxpayers have a right to be skeptical. When a Councilmember earmarks money for a nonprofit organization, he or she is essentially making a charitable contribution with your money. Only, you don't get a tax deduction and you don't have a choice in the matter.

I’m not ready to say we should eliminate all earmarks. There are truly worthy services provided by many of these organizations, who do their jobs well and better than the DC government could accomplish directly. Here are a few principles DC ought to consider:

1. Move toward more competitive grants. Earmarks, by their very nature, allocate money to politically connected organizations. Other groups, who may be more effective or in need of funds, may be overlooked. Give more organizations an opportunity to apply for funds for beneficial projects.

2. Transparency. Try finding the list of earmarks... I dare you. (Hint: you’ll need to go to the District’s Legislative Management Information System, find the final version of the annual Budget Support Act among other budget bills, make certain you have the approved final version of the bill, then find the 20 or so pages of earmarks tucked in the 150 or so page bill). If earmarks continue, the DC government should maintain a publicly available website listing:

• each organization that receives a DC government grant;
• the date of each allocation;
• identify which councilmember sponsored the allocation;
• explain, in detail, the purpose of the funds;
• include a detailed budget for the funds;
• provide contact information for the individual at the organization responsible for administering the funds;
• include a record of each and every expenditure from the government allocation with an explanation; and
• contain a link to a mandated report, filed by the organization at the end of the fiscal year, detailing the results achieved through the use of the earmark or grant money.

3. Accountability. The information provided on the DC website would provide citizens with the ability to better assess if their money is spent wisely. Organizations that do not show results should not be eligible for taxpayer funds in the future. Councilmembers who repeatedly give away our money to organizations based on politics instead of merit, should face consequences at the polls. The Council should also hold an annual oversight hearing related to the use of the previous year's earmarks.

I’d be interested in your perspective on this issue. How should the DC Council handle earmarks in the future?

The Little Engine that Couldn't

A Sosua local sings the blues after learning that a free DC fire engine and ambulance will not be coming to the "most beautiful beach in the Dominican Republic."

I have not posted in a while, but I've been following the fire engine fiasco, which you've no doubt heard about by now.

The basic run down: the DC government donated a fire truck and ambulance worth nearly $400k to Peaceaholics, an organization accustomed to receiving million dollar earmarks to purportedly negotiate gang truces when MPD throws in the towel.

Peaceaholics was apparently just an intermediary to transfer the little engine that couldn't work for the DC taxpayers anymore to a "poor" resort town in the Dominican Republic, which, of course, necessitated at least one publicly funded trip of a DC fire official to check it out.

Of course, as the details emerged, the town actually wasn't that poor and the equipment wasn't actually quite so worthless. Sunlight has a way of changing stories.

Authorized by an obscure line in the DC Register, The Examiner's Mike Neibauer caught it with a good eye and exposed the deal, and the duo was "recalled."

It's the political equivalent of attempting to stop a stupid email after hitting send, which only draws greater attention... and never works.

Rather than continuing to pretend everything is A-Ok, Mayor Adrian Fenty, Attorney General Peter Nickles, the Office of Procurement, Peaceaholics, and the fire department should fess up, immediately provide full transparency on who was involved and why, and address it appropriately. There are no take backs or do overs.

Barbara Hollingsworth nailed it in her column today. In case you have not been following the story, here is the play-by-play of Examiner coverage:

Odd deal sends D.C. fire truck, ambulance to Dominican town, 3/27/09
Cheh demands explanation of firetruck, ambulance donation, 3/27/09
Donated firetruck, ambulance recalled to D.C., sources say, 3/31/09
Fire official went to Caribbean to donate truck, 4/1/09
Fire chief says he was ‘clueless’ about donation, 4/1/09
Firetruck donation to Dominican town will get independent review, 4/3/09
D.C. Council opens own probe into donations to Caribbean, 4/10/09