A public-private trust at the center of former D.C. Council member Harry Thomas Jr.'s theft scandal doled out more than $100,000 to other groups not registered as nonprofits and others that don't exist in city records, raising more questions about the oversight of D.C. taxpayer money.
A review of its records shows that the D.C. Children & Youth Investment Trust Corp. disclosed to the Internal Revenue Service paying more than $100,000 combined to several organizations it deemed to be operating as so-called 501(c)(3) nonprofits, but a check of a public Internal Revenue Service database shows no indication that any of the groups obtained nonprofit status.
What's more, D.C. government officials say they have no record of another grantee - the Third Wind Foundation - being registered to do business in the city. Yet another small nonprofit group that received trust funds called the HELP Foundation, while registered with the District and IRS, spent most of its money on staff salaries and a six-figure compensation package for its executive director, IRS records show.
Scrutiny on the trust intensified Tuesday as its former executive director, Millicent D. West, resigned from her job as head of the District's homeland security agency. She was in charge of the trust when Thomas steered money from it. The trust pays more than $100,000 per year to an employee for grants management.
"Whenever you can't find evidence that an organization has registered with the government or has filed an IRS statement, that is a huge red flag," said Philip Becnel, a D.C. resident and managing director of a private investigations firm in Virginia, Dinolt Becnel & Wells.
Mr. Becnel said funders such as the trust should always request corporation registration documents and financial reports for the past three years, or during the duration of the company.
"They should also have a financial questionnaire that asks for details regarding how the organization spends its money and who does what," Mr. Becnel said.
Trust officials declined to respond to questions about specific transactions to several grantees for which The Washington Times found no indication of nonprofit status, despite the grantees being listed as nonprofits on the trust's IRS statement.
Trust spokeswoman Erica Toliver said the organization has been "inundated with requests for information and has limited resources to respond in as timely a manner as we would like."
"That said," she added, "we are committed to ensuring that all information reported by the Trust is reported accurately and certainly will correct any information found to be inaccurate."
According to trust filings, the group gave more than $50,000 to an organization called Youth Legacy Inc., which is registered as a nonprofit with the D.C. government, but the IRS has no record of the group's approval as a nonprofit organization, according to a public IRS database.
Shelvee Casey, the group's founder, said in a phone interview that the organization's nonprofit status is pending. Still, she said, its receipt of trust funds was permissible because Youth Legacy had a fiscal agent through another nonprofit, D.C. CASA. She said the arrangement permitted a group without nonprofit status to still receive funding.
She did not respond to further questions seeking a copy of the group's application for nonprofit status.
A spokeswoman for D.C. CASA confirmed the arrangement but said the two organizations no longer have ties.
Similarly, the trust listed paying $20,000 to a District-based group called Savvy Girl Inc., which, like Youth Legacy, is registered to do business in the city, but a search of the IRS database did not show any organization by that name as a registered charity. The organization did not return phone calls.
The trust also reported spending $15,000 on Ivey 23 Terps, which the trust reported as a 501(c)3 organization on its IRS forms. However, Ivey 23 is not listed in the IRS database, and the city's Department of Consumer and Regulatory Affairs doesn't have an organization by that name in city business filings. The Washington City Paper reported as far back as 2010 on the fact that no nonprofit or city business filings could be located for that group, a youth basketball team.
Ellen London, the trust's executive director, told the City Paper that no groups without incorporation documents or tax records were being given money in 2010, adding at the time that the trust was continuing to work with them to "complete their paperwork."
Nonetheless, the trust also reported paying $15,000 to an organization called the Third Wind Foundation, for which no IRS or city business filings could be located.
Meantime, the HELP Foundation, which describes itself on its IRS forms as a tutoring organization, and which received about $16,000 from the trust, reported spending $140,000 in compensation for its executive director, Mahdi M. Shabazz.
In addition, the group's most recently available forms state that out of the organization's $323,729 in overall revenue, $246,079 went to pay for employee salaries, benefits and other compensation.
In an interview, Mr. Shabazz said those figures are incorrect and that he is working with an accountant to correct the information, but he declined to elaborate, saying "That's between me and the IRS."
"I get nothing," he said of his compensation. "Everything I get goes right back out. I get more poverty-stricken people. Every time I turn around, somebody's in need of something."
In addition, Mr. Shabazz appears on Maryland's sex offender registry and has a misdemeanor conviction, though the underlying charge surfaced after his organization received funding from the trust. He said he is appealing the criminal case and does not belong on the registry because it was never part of his plea deal. He said he was taking leave from the foundation until his appeal is settled.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.