Money Talks and Black Lives Matter
Black Lives Matter won two cases last week, one more significant than the other. In San Francisco, the Ninth Circuit held that the City of Honolulu and Honolulu County could refuse to issue a license plate with the letters “FCKBLM.” The Court might have relied on the government speech doctrine explained in Walker v. Texas Division, Sons of Confederate Veterans, Inc. but it didn’t. In that case the Supreme Court decided by the slimmest margin that Texas could refuse to issue license plates depicting the stars and bars. The rationale was that people might reasonably associate the confederate battle flag as government speech and government has the right to discriminate in its own speech, subject to specific constitutional prohibition. Instead, the Ninth Circuit stated that Honolulu could refuse to issue the license plate because it is vulgar.
We assume without deciding that license plates bearing customized alphanumeric inscriptions—commonly known as vanity plates—fall outside the government-speech doctrine as explained in Walker v. Texas Division, Sons of Confederate Veterans, 576 U.S. 200 (2015), and are properly analyzed as nonpublic forums. We conclude the district court’s denial was proper because the relevant restrictions are not viewpoint based. See Mitchell v. Md. Motor Vehicle Admin., 148 A.3d 319, 337 (Md. 2016). The government may restrict speech in nonpublic forums so long as such restrictions are reasonable in light of the forum’s purpose and are viewpoint neutral. Cornelius v. NAACP Legal Def. & Educ. Fund, 473 U.S. 788, 806 (1985). Odquina does not contest the district court’s conclusion that Hawaii’s prohibition on the use of vulgar language on vanity plates is reasonable. It is also undisputed that Odquina’s license plate was recalled solely for the use of an implied vulgarity and not because of the plate’s overall message.
You can’t force government to endorse your private speech, but I wish the Ninth Circuit had made their clerks work a little harder explicating the government speech doctrine. I thought saying “fuck the draft and Ron DeSantis too” was fully protected speech. I will likely say exactly that over the next 18 months. It is protected speech, of course, but government need not endorse our sentiment by putting it on state issued license plates. But by assuming away government speech, the Ninth Circuit undercut any real constitutional justification Honolulu has to deny a license plate even if it expressed explicitly what “FCKBLM” means. But hey, I am not a constitutional scholar. I stick to tax and nonprofit organizations.
The second case is perhaps more important. Out in Los Angeles’ North Hills last week, a Superior Court Judge dismissed a complaint by Black Lives Matter Grassroots against Black Lives Matter Global Network Foundation. Here is a snippet from Foley and Lardner’s press release bragging (as well it should) about the decision:
In September 2022, a lawsuit was brought by Black Lives Matter Grassroots, Inc., led by Melina Abdullah, alleging false and inflammatory claims against BLM GNF and a member of the foundation’s board. Foley partner Byron McLain, who led the representation of BLM GNF, filed a motion to strike in March 2023 under California’s anti-SLAPP (Strategic Lawsuit Against Public Participation) statute. McLain argued an anti-SLAPP motion was necessary because BLM GNF faced a challenge to its qualified protected speech under the First Amendment. He also argued that the plaintiff’s allegations against BLM GNF were wild and unfounded with no basis in truth.
On June 27, 2023, the Los Angeles Superior Court struck down the lawsuit in its entirety, writing, “The Court finds that Defendant BLM GNF meets its burden showing that Plaintiff’s claims arise from acts by Defendant BLM GNF in furtherance of Defendant BLM GNF’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue.” The Court also determined that BLM Grassroots, Inc. and Melina Abdullah failed to establish that they were entitled to any donated funds at issue in the case and determined that BLM GNF did not enrich itself.
Its a teachable case, well worth the effort it to discover how the BLM civil war started in the first place and how it could have been avoided. Here is the short version. Three young Black women, despairing of police violence against Black people, used Twitter and Instagram media to publish and popularize the phrase #BlackLivesMatter and that phrase galvanized what would become one of the most influential nonprofit movements since #Abolitionists.
Alicia Garza, Patrisse Cullors, and Opal Tometi, the BLM OGs.
BLM is a “member-led global network of more than 40 chapters. Our members organize and build local power to intervene in violence inflicted on Black communities by the state and vigilantes.” Like abolitionists, BLM was seriously grassroots, with “chapters” popping up spontaneously but without any real legal structure, guidelines or control by the original gangstas. Today, Guidestar lists most of the 40 separately incorporated and tax exempt BLM organizations around the country. In the early years, the three founders and their growing number of followers protested and yelled about police violence without worrying about the legal and accounting stuff they thought wasn’t protecting them anyway. But then a Minnesota cop killed George Floyd and suddenly millions in cash donations started flowing in. Along with death threats, people harassing the founders’ families and right wing media demonization.
Anyway, Patrisse, pictured above in the middle, got kinda famous. It was she who first coined the term, #blacklivesmatter. She wrote books, established a moderate presence on social media, started a Youtube Channel and everything. She capitalized on her association with BLM. And she bought 5 or 6 homes around Los Angeles, for herself and various family members. All with her own money, but money made possible by her association with the movement. Meanwhile, the right wing media took aim at BLM and Colin Kaepernick, for politely and sometimes rudely demanding that cops stop kneeling on people’s necks until they die. The New York Post is still a big leader of the right wing media backlash, happily publishing bad news about BLM almost on a weekly basis, never mind whether its true or not. Like a story including this chart about two weeks ago.
The article implies that scandals fueled by constant NY Post negative coverage caused a decrease in donations too. Never mind that donations might be declining as people get back to their lives and get over, until the next public violence happens, the rage that caused demonstrations from all over the world. And donations, let’s not forget donations, from all over the world. Donations and attention flowed in “unprecedented” rivers to BLM, according to the complaint filed by BLM Grassroots. But after the NY Post published a story about Patrisse’ “lavish lifestyle,” implying it was funded by donations to BLM, Patrisse got tired of death threats, vilifications, and media harassment and eventually left BLM to pursue more books and a TV career. A friend asked me why she left the organization if she hadn’t done anything wrong. “It doesn’t matter, I tax-mansplained, “whether she bought houses with donor money or not, it only matters that donors might even think she did because “it says so right here in the newspaper.” Patrice was also sloppy in awarding other vendor contracts, in one case hiring her brother’s security firm at a cost of about $900,000. Still BLM needed security, physical and in cyberspace I imagine. By this time money was coming from Foundations, not just nickel and dime donations. The river could dry up in the two or three years it might take for Patrisse to recover from character assassination and prove the transactions appropriate. She became a casualty and needed to be left behind. Its not the first time a true believer was shown the door for the good of the movement. The most nuanced media article on this whole topic, including the effect of scandal on fundraising and quotes from our colleague Lloyd, is in this Intelligencer article.
The legal and tax problems with the donations was that BLM was still in its infancy and had no administrative structure to respond to all the money, fame, adulation, hatred, and infamy that fueled donations. The founders governed only by friendly consensus and without much concern for corporate niceties; they were young, black, and passionate civil rights advocates but they weren’t business people. Except Patrisse, who was all that with a little bit of business savvy to boot. Eventually, she incorporated BLM in Delaware to handle under the name Black Lives Matter Global Network Foundation (BLMGNF). In accordance with Delaware Law, it had needed and had only 1 director, and that person was Patrisse. I teach Business Organizations and I was surprised to know that. I guess its another one of the reasons Delaware is the preferred state for business. When Patrisse withdrew from BLM she knew BLM needed professional management. She, in her role as BLM director, hired a guy named Shalomyah Bowers, who has been a social activist since high school and owns a successful “for-profit left-progressive consulting firm” involved in a lot of advocacy campaigns. Good for him.
Bowers became the Executive Director of BLMGNF, managing nearly $43 million in net assets and the rivers of donations, but still reporting to a Board of just one person, Patrisse. And she would soon be leaving. According to the recently dismissed complaint, Patrisse “appointed” Bowers to the Board and then resigned. Bowers, showing more savvy, populated the Board with two more true believers, both black women. BLMGNF didn’t pay Bowers for his service, but it paid “Bowers Consulting” about $2.2 million for its administrative and consulting work just in one year. Not a shocking amount considering that in that same period BLMGNF took in about $90 million and distributed nearly all of that in grants to local BLM chapters over the same period of time.
Bowers and his firm really seem to have straightened things out, if you ask me. BLM is on my list of charities pursuing my favorite charitable cause — protecting me against racially motivated state and vigilante “justice” — but its not my bias making me conclude that Bowers is doing a good job. Bowers ensured that BLMGNF filed overdue 990s, agreeing to pay late penalties for tardiness but requesting abatement, and even self-reported a corrected excess benefit transaction that appears to be hardly more than a foot fault if even that. It seems BLMGNF paid for Bowers’ first class or private jet travel to various places around the country on BLMGNF business. Remember, though, BLMGNF was being hunted by violent right wingers and in 2021 there was an epidemic that made air travel, especially in cattle cars, dangerous. The 990 explains that Bowers needed special travel accommodations to account for death threats, other harassments, and Covid19. Sounds defensible against an excess benefit tax but Bowers, his firm, and by now his legal and accounting consultants decided to report and correct anyway, out of an abundance of caution and no doubt as a public relations strategy. BLMGNF now has a seemingly detailed grant monitoring and reporting process too, something I bet wasn’t even thought about until Bowers came on board and hired lawyers and accountants. They probably gave out way too much money way too fast, but certainly not to themselves, and certainly only in pursuit of their charitable goal.
Incidentally, I have pretty much for concluded for myself that neither Bowers, Patrisse, nor Medina Abdulla, the leader of the splinter group BLM Grassroots — the organization whose lawsuit was dismissed last week — are real charitists and have not succumbed to the temptation common to all wealthy nonprofit fiduciaries to dip into the river of donations for their own indulgence. The BLM Grassroots website doesn’t even ask for donations. Instead it asks donors to give to local independent chapters and provides links to do so. According to BLMGNF’s 990s, two are accessible via GuideStar, BLMNGF made grants to local BLM or other civil rights groups — mostly those fighting a wave of anti-LGBTQ+ legislative sentiment — in big handfuls, so much so that the group apparently ran a deficit in the year of their highest donations.
It just doesn’t look like either group has enough money left for their warring fiduciaries to live high on the hog even if they wanted to. They are all just true believers with real disagreement about how the movement should look. Abdullah’s group, the plaintiffs, apparently want more local chapter representation on the BLMGNF Board and over the money, but BLMGNF is resisting that, at least for now. BLMGNF is only three years old and only one or two years removed from the year of its largest donations. But it didn’t help that BLMGNF changed the passwords to all BLM social media, so that donations and advocacy would be controlled by BLMGNF proper. Before, and consistent with the seriously grassroots nature of the movement in its early years, a much wider group of BLM associates — including local chapters — could just access BLM’s official social media. And then BLMGNF took steps to ensure that no money was paid out as grants until approved by BLMGNF. All that enraged some of the local chapters, many of which support BLM Grassroots’ efforts to oust the BLMGNF board. In any event, in the wake of lawsuit’s dismissal, BLMGNF has pleaded with the prodigal children to come home so both sides can work it out and no doubt stop the fighting that is fueling a right wing campaign against Foundation donors and everybody else. BLM Grassroots appears to want none of that and has promised an appeal. Which makes me wonder if BLM Grassroots is really working for the higher cause. I should mention that BLM Grassroots details a lot of its unsuccessful effort to convince BLMGNF to be more “transparent” and “accountable.” So maybe the group has heard it all before. Still, BLM Grassroots is clearly losing. If there complaint weren’t so poorly written, I would think BLM Grassroots is secretly funded by people who just want the civil war to continue.
Lessons learned: (1) get incorporated early and institute best practice governance measures, its really not that expensive, (2) when money starts rushing in like a Tsunami, get professional help early and don’t spend any money until professional help approves, (3) don’t read your own press clippings and get bigger than the organization, (4) avoid awarding contracts to related parties, except after seriously bullet-proofing the transaction with valuation reports, and independent committees not including the related insider, and (5) plan for inevitable money-driven conflict by adopting conflict resolution procedures. There might be other lessons to learn. I tell my students all the time that you can win the war but lose big battles along the way. I hope BLM survives. Even though it prevailed in court and may well survive the war, it engaged a costly battle that probably could have been avoided.
darryll k. jones