Posted on 03/13/2005 3:55:15 AM PST by Liz
The city funnels $4B a year in taxpayer money to nonprofits that help the needy — but ignores the big bucks some of these groups pay their executives, a Post investigation has found.
A whopping 200 executives at organizations that provide services for ..... have-nots take home in excess of $150,000 a year............
Another 12 nonprofiteers make more than the top nonprofit earners in the entire state based on the budget size of their groups, according to a survey of 2002 salaries by the nonprofit watchdog Guidestar.org.
The Post found these sky-high salaries:
* Arthur Klein, CEO of NY and Presbyterian Hospitals System, makes $586,905...........
* Jeremiah Barondess, president of NY Academy of Medicine, pulls down $523,439 ($317,393).
* Joseph A. Califano Jr., president of the National Center on Addiction and Substance Abuse at Columbia University, makes $388,110 ($263,976).
* Beny J. Primm, president of Urban Resource Institute, makes $363,301 ($263,976).
* Daniel Quintero, executive director of the Kips Bay Boys' and Girls' Club, makes $290,113 ($209,675).
The groups that responded to Post inquiries said salaries come from a mix of government funding and private funding or strictly from private funding.
Klein — who owns homes on the Upper East Side and in the Hamptons, according to public records — no longer holds that ancillary position, but received a pay raise in 2003, from $572,381.
........ Primm — who owns properties in New Rochelle, Martha's Vineyard and the North Carolina coast, according to public records — is still paid more than the survey's high end.
Guidestar.org's Suzanne Coffmann said, "If you see executives making more than that [top 10 percent of industry earners] it can point to a problem."
Last August, the IRS launched an ongoing investigation of excessive executive salaries at 2,000 nonprofits. It would not identify the organizations.
(Excerpt) Read more at nypost.com ...
Earlier news reports say the IRS will examine Form 990, the main public disclosure documents for NPO 501c's (will also include charities and foundations), to determine whether accounting fraud and tax evasion is taking place, and whether the compensation of specific individuals is excessive in order to transfer assets, and, and whether instances of questionable compensation practices may evade the IRS, and US banking laws.
Reportedly NPO's use line items like "legal fees" to hide wrongdoing.
The IRS has received complaints that 501C's are being used to run just about every kind of off-the-books accounting fraud.
In one case, the president of a non-profit organization was embezzling donations and was engaging in accounting fraud by having the NPO pay his entire apartment lease which was fraudulently booked on non-profit documents as a "business office."
Then there was the lovebug at United Way who was subsidizing his girlfriend with the charity's funds.
We should also be very suspect of these "foundations" which can be used to launder monies people want to hide from the IRS.
Someone might donate say couple million bucks, the charity takes a cut, then illegally converts and launders the funds elsehwere, so the donor has access to the monies later, out of sight of the IRS and US banking laws.
Sme of these crooks could also be using NPO's and foundation scams to illegally convert donations (and tax funds) to campaign accounts.
Our very own astute FReeper Grampa Dave has been on top of this.
We've been trying to get someone to pay attention to the syndicate in our area, if average citizens can see the 'front operations' surely we can get some legel action taken. NOT, the situation is so bad in our area nobody will standup to them. Everybody is afraid of losing the money for the city, but these bozo's don't see the money isn't making it into the city. It's floating in a number of hands and is untouchable by any small NPO. And these guys are what I affectionately call the 'Green Mafia.'
It might take a happenstance like illegal money laundering offshore to open their eyes.
There could also be illegal converting and money laundering in casinos---where the perps sign up for high roller comp programs. That leaves a clear trail for the IRS since the casinos record every transaction.
What I want to know is how to investigate these guys and reveal them for what they are doing? I am not all that savy, but I am sure I could get some good advice from a few.
501C's are used to run just about every kind of fraudulent accounting schemes, some observers say. Legal fees, a line item in most non-profit accounting reports, are well-used money laundering schemes that evade US taxes and use fraudulent accounting techniques to violate US banking and SEC laws.
As part of the Tax Exempt Compensation Enforcement Project, the Internal Revenue Service (IRS) announced August 2004 that it intends to examine non-profit organizations (NPO), to learn more about the practices nonprofits follow as they fill out Form 990, the main public disclosure documents for charities and foundations, and whether accounting fraud and tax evasion is taking place, and whether the compensation of specific individuals is excessive and, and whether instances of questionable compensation practices may evade IRS, banking and SEC laws.
The IRS will examine NPO insider transactions, such as (1) loans, the (2) sale, (3) exchange or (4) leasing of property to non-profit officers and others. In particular, the IRS will look to see how organizations report (5) "excess benefit transactions" on Form 990, and (6) executive pay.
News agencies reported the IRS statement Aug 10, 2004, and that some 2,000 charities will be reviewed under a new IRS enforcement effort to determine whether NPO are abusing their tax-exempt status. "We are concerned that some charities and private foundations are abusing their tax-exempt status by paying exorbitant compensation to their officers and others," said IRS Commissioner Mark Everson. The IRS began the new enforcement project at the end of July and will continue through 2005.
The IRS has received complaints that 501C's are being used to run just about every kind of off-the-books accounting fraud. In one case, the president of a non-profit organization was embezzling donations and was engaging in accounting fraud by having the NPO pay his entire apartment lease which was fraudulently booked on non-profit documents as a "business office."
When the incident was reported to the IRS, they agreed that documentation to prove the fraud existed, but that the IRS had the staff to investigate non-profit fraud solely in amounts totaling $100,000 or more. The only way the fraud could have been stopped was to hire private attorneys to take the individual to court for fraud against the non-profit. However, the non-profit board walked away from it because they didn't have the personal resources to stop the fraud.
Concerns have also been raised that the IRS has been stymied in its efforts to penalize falsified tax documents and official financial instruments to cover-up theft, and the failure of individuals to report stolen money as income.
Nonprofits, authorities, trust, foundations, unions, have the potential and may, in fact, be major money laundering conduits. They wrap themselves in all sorts of high-sounding causes while engaging in activities that are fraudulent and benefit insiders at the expense of law-abiding Americans.
BENY J. PRIMM. M.D.
Founder/Executive Director,
Addiction Research and Treatment Corporation
President,
Urban Resource Institute
http://tinyurl.com/4s6j2
Jeremiah A. Barondess, MD, is President of The New York Academy of Medicine and Professor Emeritus of Clinical Medicine at the Cornell University Medical College
http://www.nyam.org/about/barondess.shtml
It's not just paying the execs--it's expensing them all kinds of perks. I know of two non-profits (You can follow them on guidestar.org) where some rich types first donate money to their "vanity philanthropy"--then direct that philanthropy to pay for their "adventure vacations." Camping trips to antarctica, submarine rides to the Titanic... these kinds of vacations cost $50k/person . Tax deductable, because it's "scientific exploration"--LOL!
We're all onto this kind of scam. Since Enron, accounting procedures have come under intense scrutiny.
Whenever a "foundation" flaunts itself as a "tolerant and compassionate do-gooder," you know there's hanky-panky going on......the more they pat themselves on the back, the more they need investigating.
It's time for these frauds to fold up their tents.
The point is----these cases illustrate the need for accountability, and are the ones that triggered the curent investigation.
Since Enron, accounting procedures are suspect. Now NPO's are being investigated, and hopefully will be subjected to more stringent laws covering their activities.
You have said a mouthful there.
Grampa Dave has made a very good case for thinking that the Sierra Club and other radical ecological groups get a chunk of money from the Middle East, whose interest it is to stop drilling in ANWR, new refineries, etc.
I also would like to know WHO gave money to the Clinton library.
NPO's should not have the ability to hide their donor lists, period.
Shouldn't the pay in some way reflect the size and success of the organization? If a person is running a large successful orgnaization, even if it is non-profit, these salaries might well be acceptable.
I don't think I would slam any of these people simply because the IRS is getting involved. I can't imagine the IRS is the friend of anyone, especially Freepers.
I appreciate your input, but the Grant Making Process isn't working in my area. It too, has been riddled with fraud. The major grant making foundation funnels money to the "fronted NPO," who then takes their cuts, or worst as in one group accomplished nothing, none of the money made it to any organization in the community, and as reported on 1/26/05 is running in the red...and they had a major multi-million dollar grant. Where'd the money go? They're having to move out of highrent offices etc. Poor darlings, maybe if they'd been a bit more wise in handling the funds in the first place.
In addition, as I stated earlier they do this thing with Donor Directed Grants too. Undisclosed money goes in and undisclosed money goes out. They even state in the 2005 grant award page that grants listed do not include donor directed awards.
Sorry if I am sounding harsh, I am just extremely frustrated that our city has almost a billion dollars available for grant making and very little of it getting to where it needs to go. In fact, this particular foundation won't even award grants to small NPO's. They must be 'moderate sized' or somebodys pet project.
Are you saying that you would be first in line to tell the government about every dollar you drop in a Salvation Army kettle?
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