Posted on 01/20/2020 4:54:26 AM PST by Kaslin
If you raise money for a nonprofit, but don’t finish all of the projects you were raising it for, you could go to prison for 10 years. This is no exaggeration. This is what happened to former Rep. Steve Stockman of Texas. Earlier this month, the Fifth Circuit Court of Appeals upheld a conviction against him for that very reason. Two of the three judges on the panel were Obama appointees. The third judge, who wrote the opinion, is 82 and was so ill he never showed up for oral arguments. Shockingly, he wrote a politically charged opinion, evidenced right in its sarcastic opening statement, making light of a serious case impacting a man's life.
Stockman was a very outspoken conservative congressman who appears to have been targeted by the left through the legal system. But this ruling sets a chilling precedent for nonprofit c3s and c4s of all political stripes. This terrible decision, which ignored several of its own Fifth Circuit precedents, could be used against Democratic nonprofits just as easily.
What happened was Stockman raised $285,000 in 2010 for the Ross Center, a 501c3 which he controlled. He told the donor, Stanford Z. Rothschild, Jr., that the money was to go to voter education for Jewish voters in Florida as well as a fundraiser. Meanwhile, he received a salary from the Ross Center — nothing odd about that. The Fifth Circuit opinion ignored the work he’d done related to the project, which included making a book and the fact the money was legitimately spent on a fundraiser.
Instead, they claimed he misused the funds, because he chose to spend his salary on personal items for himself. But how he spent his salary was his own business. The opinion deliberately left out the fact he was spending money from his salary in order to come to its twisted conclusion. The judge wrote, “He quickly diverted donor money to personal and political projects having nothing to do with philanthropy or education (emphasis added).” Even more dishonestly, the court looked at credit card statements from four years before the donations were even made to find personal expenses!
Again in 2011, Rothschild offered to donate money to be used for voter education. He contributed $165,000 to the Ross Center and to another nonprofit Stockman ran, Life Without Limits. Again, Stockman paid himself a salary and used it on various personal items, including a loan to his political campaign.
In 2013, businessman Richard Uihlein offered to contribute $350,000 for projects by the Congressional Freedom Foundation. The prosecution honed in on the fact that one part of the project, obtaining a house called “Freedom House,” was not completed. And yet again, the Fifth Circuit opinion poured over the personal items that Stockman spent his separate salary on.
In 2014, Uihlein gave $450,571.65 to the Post Office in order to send out an educational mailer for Stockman’s political campaign. They mailed fewer than planned, but that’s common, and applied funds raised to other legitimate nonprofit costs as well. The Fifth Circuit admitted in its opinion, “The 2014 Uihlein funds were used to print and distribute hundreds of thousands of copies of The Conservative News.” About half of the money was spent on that. But since the direct mail portion ended up not taking place, the court claimed it was a fraudulent scheme. The court also falsely wrote in its opinion that Uihlein wrote his check to one of Stockman’s nonprofits, and said that Stockman called off the mailing. The truth is the vendor could not complete the task because his shop could not handle that much mail.
Stockman was convicted of merely process crimes which are meant to pile on, and crimes that normally are handled civilly by correcting a filing. Wire fraud and mail fraud simply mean the person used the mail and the telephone while they were committing crimes. Money laundering means there was money involved in the crimes. The campaign counts and tax return count should have never risen to the level of a crime, Stockman should have been allowed to correct the filings civilly as most people are.
The Fifth Circuit opinion allowed the trial court’s misleading description of 501c3s and 501c4s in the jury instructions to stand. The jury instructions were confusing and gave the jury only a partial understanding of what nonprofits can and can't do with donations.
The trial court also used an unfair standard to convict Stockman of violating campaign finance laws. Stockman did not set up an excessive contribution to his campaign because The Conservative News mailer wasn’t “express advocacy” so it did not constitute a contribution.” The literature didn’t say “vote for” or that kind of clear advocacy language, it was merely educational. But the trial court confused the jury into thinking it was express advocacy. According to the government’s own case agent, FBI Agent Spencer Brooks, The Conservative News did not contain any “express advocacy.”
There was no precedent until recently for turning the alleged campaign violation of a coordinated contribution into a crime. The appeals panel, however, chose to disregard its own circuit precedent about independent expenditures, and therefore reached an egregious and unprecedented result on the campaign finance issue. Political speech has First Amendment protections, and regulation must be narrow. The opinion didn’t even mention the First Amendment. This should terrify any nonprofit that gets close to any political campaigns.
The Fifth Circuit’s opinion is written sarcastically, mocking Stockman, who has now been languishing in a prison cell for over two years. Stockman did not implement “a scheme to deprive two donors of their money and property.” The donors knew exactly what their money was going to and approved of it. Rothschild admitted afterwards that he thought his money had been adequately spent. Unfortunately, he passed away before he could be called to testify at trial.
One of the key witnesses for the prosecution, Ben Wetmore, has subsequently said Stockman is innocent. He has gone over all of the charges against Stockman and explained why they were wrong.
Stockman has an impeccable background with no criminal convictions until now. The DOJ is out of control and it’s unfortunate President Donald Trump has not been able to clean it up yet. Left wing prosecutors targeted and overly prosecuted Stockman in order to send a message to outspoken conservative elected officials: Back down or you will pay. Convicted murderers have served less than 10 years in prison. Let’s hope wiser heads at the U.S. Supreme Court agree to take this case. Alternatively, Trump needs to pardon Stockman.
Went to another news article to find out what the “personal items” were that he spent donor money on:
“The scheme the Capitol Hill veteran orchestrated involved funneling charitable contributions between 2010 and 2014 from two megadonors who ran conservative nonprofits and using it to pay for a spy operation targeting a potential GOP rival at the statehouse in Austin, among other illegal and unrelated expenses including dolphin tours and hot air balloon rides.”
Ha Ha Ha says the Clinton Foundation folks who paid for Chelsea’s wedding.
Some hospitals and some colleges are set up as “non-profit” institutions.
In my opinion, from an ethical point of view, if you charge fees for your services, you should not be able to call yourself a “non-profit” outfit.
A lot of what the article is claiming is accepted and standard practice for many kinds of “non-profits”, to me the idea of forming a “non-profit” that also then pays you a salary is not ethical. An ethical non-profit that someone forms would hire someone else, not pay yourself.
Do not confuse nonprofit with not for profit.
What are the chances that this poor sucker would draw two of the three ClownBammy jesters on the Fifth Circuit for his appeal?
Jolly is an 82-year-old fossil.
Age Title Judge Duty station Born Term of service Appointed by 65 Chief Judge Priscilla Owen * Austin, TX 1954 2005–present &2019–present G.W. Bush 70 Circuit Judge Edith Jones # Houston, TX 1949 1985–present &2006–2012 Reagan 73 Circuit Judge Jerry Edwin Smith # Houston, TX 1946 1987–present — — Reagan 70 Circuit Judge Carl E. Stewart Shreveport, LA 1950 1994–present &2012–2019 Clinton 83 Circuit Judge James L. Dennis New Orleans, LA 1936 1995–present — — Clinton 53 Circuit Judge Jennifer Walker Elrod # Houston, TX 1966 2007–present — — G.W. Bush 70 Circuit Judge Leslie H. Southwick # Jackson, MS 1950 2007–present — — G.W. Bush 56 Circuit Judge Catharina Haynes Dallas, TX 1963 2008–present — — G.W. Bush 66 Circuit Judge James E. Graves Jr. Jackson, MS 1953 2011–present — — Obama 58 Circuit Judge Stephen A. Higginson New Orleans, LA 1961 2011–present — — Obama 47 Circuit Judge Gregg Costa # Houston, TX 1972 2014–present — — Obama 53 Circuit Judge Don Willett * Austin, TX 1966 2018–present — — Trump 47 Circuit Judge James C. Ho * Dallas, TX 1973 2018–present — — Trump 48 Circuit Judge Kyle Duncan * Baton Rouge, LA 1972 2018–present — — Trump 60 Circuit Judge Kurt D. Engelhardt * New Orleans, LA 1960 2018–present — — Trump 42 Circuit Judge Andy Oldham * Austin, TX 1978 2018–present — — Trump Circuit Judge vacant — — — — — — ====================== 82 Senior Circuit Carolyn Dineen King Houston, TX 1938 1979–2013 2013–present Carter &1999–2006 98 Senior Circuit Thomas Morrow Reavley Houston, TX 1921 1979–1990 1990–present Carter 82 Senior Circuit E. Grady Jolly # Jackson, MS 1937 1982–2017 2017–present Reagan 81 Senior Circuit Patrick Higginbotham Austin, TX 1938 1982–2006 2006–present Reagan 83 Senior Circuit W. Eugene Davis New Orleans, LA 1936 1983–2016 2016–present Reagan 86 Senior Circuit John Malcolm Duhé Jr. inactive 1933 1988–1999 1999–present Reagan 75 Senior Circuit Rhesa Hawkins Barksdale Jackson, MS 1944 1990–2009 2009–present G.H.W. Bush 85 Senior Circuit Jacques L. Wiener Jr. New Orleans, LA 1934 1990–2010 2010–present G.H.W. Bush 73 Senior Circuit Fortunato Benavides Austin, TX 1947 1994–2012 2012–present Clinton 72 Senior Circuit Edith Brown Clement * New Orleans, LA 1948 2001–2018 2018–present G.W. Bush
& denotes Chief Judge of the Court
* denotes Federalist Society member
# denotes Federalist Society associate
That 82 year old “fossil” is a spring chicken compared to the 98 year old judge on your list! And I thought the Senate was bad. Ha ha.
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