Chances are it’s not going to be a good day for me if I wander out to my mailbox and find a letter from the Internal Revenue Service and another from the Illinois Attorney General’s office addressed specifically to me. It becomes one of those ‘oh oh’ moments, and the ‘yips’ surface.
This basically is what happened in Naperville when organizers for the ‘Naperville Mayor’s Annual Golf Outing’ whiffed and realized the IRS had revoked their tax-exempt status because it neglected to file the proper papers. Compound that with the Illinois Attorney General’s claim that the group running the the golf outing landed in the bunker, by not being registered as required by state law.
The golf outing’s charity classification was revoked. It requires groups to file annual forms listing when and from whom revenues come, and exactly where and when and to whom money was dispersed. Similar to a typical household’s check book. It’s not any different for any charitable, non-profit to submit the forms for documentation and transparency.
It’s not that difficult. This is either a simple clerical mistake, or it’s another classic example of incompetence by omission or design on the part of those responsible for doing the right thing. It continues to happen with Naperville; the ‘it’ being failure to properly file simple reports. Divots, divots and more divots.
Because it’s listed as the ‘Mayor’s Golf Outing, both former mayor George Pradel and current mayor Steve Chirico’s names are headliners for the event. Anything good or not-so-good happening reflects upon both Pradel and Chirico.
Not good in this case, when ‘transparency’ is a key word among city officials. And especially when the topic is handled like a hot potato. Pradel referred questions about the situation to a local attorney, who then passed it on to a city employee in the mayor’s office for clarification, who then referred the questions back to the attorney. I think you get the idea, as in ‘I know nothing’.
Apparently the group raised about $200,000 from 2010 through 2014, which is commendable. Of that amount, a little over $4,000 remains yet to be used. My handy dandy little desk calculator shows that $196,000 must have been used for something. The question remains, what was the ‘something’.
Chances are very good, that the ‘something’ was a list of very good causes. The problem is, one is left wondering if the the inadequate documentation was by clever design or incompetent omission.
Mayor Chirico, calling a mulligan, filed paperwork this summer, with the State of Illinois, under the name of “Naperville Mayor’s Charity Golf Outing”. Since the group will have no purchases, a tax-exempt status is not necessary. It also means filing annual reports showing how money is raised and dispersed will not be needed. Obviously, he is looking for a birdie.
The problem is the change does nothing to promote the all-important virtue of transparency. The back-swing, is still flawed.
Who signed the CAFR ( certified audited financial reports) for Naperville guaranteeing that all financial data had been disclosed for the audit? There apparently is/was an account, Mayor’s Golf Outing, with $200,000.00 that was dispersing money. Where did that money go and who signed the checks, or gave out the cash. The CAFR for
those years must be amended to disclose the account and the disbursement of funds.
I did not respond to this posting immediately, because there were a lot of questions I had that the Tribune article and this post (which seems to have used only the Tribune article as it source) did not answer. I have heard disparaging comments made about this organization in the past but basically paid no attention to them because when asked for specifics no proof of any unlawful activity could be provided by the person(s) making these accusations.
First this organization existed for 15 years before being embraced by Mayor Pradel and for another 15 years after, operating as a nonprofit organization without any issues. Mayor Pradel’s decision to make changes to improve and clarify this organization’s operations in 2010 by changing it’s status from a non-profit 501(a) to a charitable 501(c)(3) organization clearly did not go as intended (it should be noted this organization could have continued to operated as it had for the previous 30 years without issue). There is no indication that anyone intended to not make the required filings only a failure to make it clear who was to be responsible for these filings.
I am not sure why this post choose not to include the name of the local attorney, which was given in the tribune article, but I do know the author of this post did not discuss this matter with this attorney, because I did. The authors of the Tribune article were in fact given full cooperation with all questions answered and all documents requested provided.
The authors of the tribune article seem to only focus, when reviewing these documents, on finding flaws which could be including in their article. No request was made for any documentation that would clarify or complete these gaps. The authors appears to have heard the same disparaging statements I have heard in the past and decided to make some sort of expose out of them without really trying to determine if any wrong doing had really occurred. In fact the article never accuses anyone of braking any law, any one of misappropriating any funds or stated this matter should undergo further independent investigation. For example the authors mention the “Mayor’s Charitable Fund” line item as being the single largest multi-year recipient of funds is misleading because they did not bother to point out that this item is actually a small fraction of the total funds dispersed and that they did not ask for the documentations showing how these funds were dispersed.
The Tribune article makes a big deal out of non-profits having 501(c)(3) status with the IRS rather than 501(a). First there is no government requirement that a non-profit be 501(c)(3), in fact that is why the 501(a) status exists. The restrictions and documentation requirements are much greater under 501(c)(3) then 501(a) and unless and organization has a specific need for this status there is no good reason to incur the additional expenses associated with 501(c)(3). Not every organization in Naperville that does fund raising to benefit the community’s needy is a 501(c)(3). The implication that 501(a) organizations cannot or well not provide the same level of transparency has no foundation in reality. And to imply that any non-profit that is not 501(c)(3) is in some way nefarious in nature is misleading at best.
Finally, on the issue of Mayor Chirico filing to start a new organization to operate the Mayor golf outing, this was actually a recommendation of Mayor Pradel. Mayor Chirico has not be the head of a charitable organization before and there are a lot of i’s to dot and t’s to cross in this process. It is reasonable to assume any missteps on his part, are part of a learning process and not a deliberate attempt to mislead anyone, unless of course you are a fan of conspiracy theories which the authors of the tribune article appears to be.