Politicians and Nonprofits – A Recipe for Disaster?

Elections predictably bring scrutiny to nonprofits associated with politicians, whether they are the politicians’ own charities (see earlier post about the Clinton and Trump foundations), churches hosting candidates, or noncharitable nonprofits spending “dark money” (sources of funds not publicly disclosed) to influence elections. The ties between nonprofits and politicians are often much deeper and murkier, however, as Jack Siegel detailed almost 10 years ago and a USA Today article recently highlighted (hat tip: Election Law Blog). Here are further stories along these lines, the first two of which are mentioned in the USA Today article:

• New York City Mayor Bill de Blasio is the subject of five separate law enforcement inquiries, some of which focus on an animal-rights group that spent heavily in the 2013 mayoral race against de Blasio’s main rival, according to the NY Times. Earlier this year the mayor announced that he was shutting down a different nonprofit group that worked to advance his political agenda in the face of public criticism, according to the Associated Press. Additional coverage: Wall Street Journal.

• Los Angeles Mayor Eric Garcetti created a nonprofit that has raised $14.6 million in its first full year of operation but has spent less than a third of that amount supporting programs in that city, according to the LA Times. In response to the story the nonprofit’s president said the imbalance is the result of the need to ramp up and the mayor asserted he has no control over the fund.

• US Senator John McCain has helped raise funds for a nonprofit named after him and its fundraising arm, which Bloomberg reports received a $1 million donation from the government of Saudi Arabia that came through the fundraising arm of Arizona State University, the ASU Foundation. Additional coverage: Washington Post (including Senator McCain’s response).

• U.S. Representative Chaka Fattah is facing a federal criminal trial relating to numerous nonprofits that he set up over the years that receives millions in government funds and his alleged use of them to repay an off-the-books $1 million loan to his earlier campaign for mayor of Philadelphia, according to philly.com. The indictment led to Rep. Fattah losing the Democratic primary for his congressional seat last month, according to the Washington Post. 

Lloyd Mayer