Friday, August 10, 2012

Schneiderman's Crusade

As we have been commenting AG Schneiderman has been on vigilance patrol against not-for-profits acting more as political advocacy groups than as charities. According to an upstate news source the AG is ratcheting up his efforts:

"New York Attorney General Eric Schneiderman has expanded an investigation into tax-exempt social welfare groups to see whether they are crossing permissible boundaries from educating the public into influencing national politics, according to officials familiar with the inquiry."

And the AG feels a sense of urgency because the federal agencies are too slow moving:

"The officials said it was unclear with some organizations how much their educational role actually exists compared to their political role, and that Schneiderman didn’t want to wait for the slower-moving IRS and Federal Election Commission to act. They declined Thursday to name all the groups from which information was requested."

Hooray for the crusader! But let's reflect for a moment on the AG's recently concluded investigation into the illegal lobbying of Claire Shulman's LDC-a not for profit that was established exclusively so that it could lobby on behalf of the city and its own real estate developer members. The LDC had falsely claimed on federal filings that it was not going to lobby-and received its tax exempt status through fraud.

So when the IRS-"slow moving," in the AG's view-didn't act, what did Schneiderman do to the fraudulent charity? The short answer; Nothing. He failed to sanction the group, remove its not for profit status for fraud (after all it received $450,000 in city funds and $1.5 million in state funds because of its tax exempt status) or ask that the LDC restitute the illegally acquired tax payer funds.

So while it is certainly heart warming to see the AG crusading after national entities that he believes might be masquerading as charities, it would be even more so if he showed a sense of righteousness about a local group that schemed to defraud the public. After all, as we have been told, charity begins at home.