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D.C. nonprofit can’t say how it spent $25M
Former council member Thomas stole money from same youth group
Question of the Day
A D.C. government-funded nonprofit group entangled in a theft scam that saw a D.C. Council member go to federal prison reported receiving $25 million in a newly filed report with the Internal Revenue Service, but officials won't say how they spent all of that cash.
The D.C. Children & Youth Investment Trust Corp. failed to identify any grantees in its latest annual tax filing with the IRS. In the past, it had identified dozens of community groups it funded each year from across the District.
What's more, the organization also withheld from the IRS figures detailing how much money the group spent overall, making it impossible to draw conclusions about the finances of the children's organization.
Earl Hamilton, senior director of finance and operations for the trust, said the organization plans to file an amended report with the IRS when outside auditors finish reviewing the trust's finances. He said officials are working on two years of audits.
"The trust is under new management and new leadership," Mr. Hamilton said. "At the completion of those audits, all interested parties will have full disclosure and full details."
The audits come as the trust seeks to rebound from the federal investigation into former D.C. Council member Harry Thomas Jr., who is serving a three-year federal prison sentence after pleading guilty to steering grant money intended for local children to himself for, among other things, trips, clothing, a sport utility vehicle and fancy shoes.
The scandal raised questions about the trust's oversight of grant funding apart from the Thomas theft.
Based on a review of previous IRS filings, several grantees funded by the trust in recent years lacked nonprofit status or basic incorporation papers. And The Washington Times reported last year that the group had paid out more than $400,000 to rent a giant, heated tent during festivities for President Obama's 2008 inauguration.
The trust's newly appointed executive director, Edward Davies, signed the latest IRS form Wednesday, and the group provided a copy of the filing to The Times after repeated requests in recent weeks.
While reporting $25.7 million in funding for the latest reporting period, spanning October 2010 to September 2011, the trust leaves blank entire sections regarding annual expenditures, including compensation, fundraising fees and grant payouts.
The lack of information makes it impossible to tell, for now, whether the trust saw its finances improve or worsen compared to the nearly $3 million deficit reported for the previous year.
Marcus Owens, former director of the IRS' Exempt Organizations Division, said the lack of such key information should prompt the IRS to reject the filing as incomplete.
He said that the trust should amend its return, but that it is likely taking outside auditors a while to sort through the paperwork.
"Obviously something was going on with the organization so I've got to believe the records were a mess," said Mr. Owens, a partner at Caplin & Drysdale in Washington.
Among the few expenditures it did disclose, the trust reported paying $150,000 to Ellen London, its former chief executive, and $100,000 more to three other executives.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Jim McElhatton is an investigative reporter for The Washington Times. He can be reached at firstname.lastname@example.org.
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