Friday, May 22, 2009

CBO Report: "Tax Preferences for Collegiate Sports"

The Congressional Budget Office has issued a report on whether income colleges and universities receive from athletic programs should continue to be viewed as related to these institutions' educational purposes and so remain exempt from federal income tax.  CBO prepared the report at the request of Senator Chuck Grassley, Ranking Member of the Senator Finance Committee, who responded to its issuance with a press release demanding that colleges explain their use of commercial revenue from athletics. 

The report reaches the following three conclusions.  The last sentence of the third conclusion - suggesting possible taxation of corporate sponsorships and royalties - is of particular interest (emphasis added):

1.  Athletic departments in NCAA Division I schools derive a considerably larger share of their revenue from commercial activities than do other parts of the universities.

2.  In the case of Division IA schools (a subset of schools in Division I that meet NCAA requirements for football programs), 60 percent to 80 percent of athletic departments’ revenue comes from activities that can be described as commercial. That proportion is seven to eight times that for the rest of the schools’ activities and programs, suggesting that their sports programs may have crossed the line from educational to commercial endeavors. Revenue from commercial activities accounts for a much smaller share of athletic department revenue (20 percent to 30 percent) for schools in the rest of Division I.

3.  Nonetheless, removing the major tax preferences currently available to university athletic departments would be unlikely to significantly alter the nature of those programs or garner much tax revenue even if the sports programs were classified, for tax purposes, as engaging in unrelated commercial activity. As long as athletic departments remained a part of the larger nonprofit or public university, schools would have considerable opportunity to shift revenue, costs, or both between their taxed and untaxed sectors, rendering efforts to tax that unrelated income largely ineffective. Changing the tax treatment of income from certain sources, such as corporate sponsorships or royalties from sales of branded merchandise, would be more likely to affect only the most commercial teams; it would also create less opportunity for shifting revenue or costs.



May 22, 2009 in Federal – Legislative, Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Donor Sues Brandeis Over Razing of Named Building

In an article I should have caught last week, the Wall Street Journal reportedthat Sumner Kalman is suing Brandeis Universityto block the demolition of the Kalman Science Building, named after Sumner Kalman's great uncle, Julius Kalman.  The University is building a new science center that will be named after another donor to replace the original building.  The University has said it is working with the Kalman family to make sure Julius Kalman continues to be honored appropriately.  Sumner Kalman apparently filed the suit in Suffolk County Probate Court after the Massachusetts Attorney General's office declined to take action having concluded the university was under no obligation to maintain the original building beyond its useful life.


May 22, 2009 in State – Judicial | Permalink | Comments (0) | TrackBack (0)

FTC and State AGs Crackdown on Fake Charities

The Federal Trade Commission has announcedit is working with 48 states to bring enforcement actions against 76 entities or individuals involved in fundraising solicitations that tricked individuals into making donations to fake charities.  Operation False Charity is targeting 32 fundraising companies, 22 non-profits or purported non-profits, and 31 individuals.  The entities included sham non-profit organizations with names such as American Veterans Relief Foundation, Inc., Coalition of Police and Sheriffs, Inc., and Disabled Firefighters Fund, that were created almost entirely to funnel donations to their founders and for-profit fundraisers.  Media coverage of the crackdown is available from the Los Angeles Times, the Columbus Dispatch, and the St. Louis Post-Dispatch.


May 22, 2009 in Federal – Executive, In the News, State – Executive | Permalink | Comments (0) | TrackBack (0)

Chicago Nonprofit Argues Charter School Is Private Firm So Federal Government Has Jurisdiction Over Union Certification

Chicago Public Radio reported that there is much debate over whether jurisdiction belongs to the federal or Illinois state government to determine the union certification for three campuses of the new Chicago International Charter School (CICS).

The nonprofit management group, Civitas, asserts that the federal government should have jurisdiction over the union certification and filed a petition with the National Labor Relations Board.  A decision is expected this month.  Under federal law, the three charter campuses fighting for union representation would have to hold an election to determine whether teachers want the union. State law does not require an election at the schools, because a majority of teachers have already signed union cards. The Illinois Educational Labor Relations Board says it received 91 signed and dated cards; organizers say that’s about 75% of employees at the three campuses.  

The legal fight has forced Civitas to make a prickly argument: Charter schools have worked hard to emphasize they are public schools, funded with public dollars. But in order to fall under the jurisdiction of the NLRB, an entity must be a private firm, and that is what Civitas is arguing. The Illinois Educational Labor Relations Board has jurisdiction over public educational employers.  Civitas CEO Simon Hess claims Civitas is essentially a private vendor: "just because you receive public funds doesn’t mean you’re a public entity."

There was a similar case a year ago when teachers at Cambridge Lakes Charter School in Kane County, Illinois formed a union. Their employer, the Northern Kane Educational Corporation, also argued that the NLRB should have jurisdiction in the case, using the same private employer argument. But the state IELRB ruled otherwise. In a decision issued in November 2008, the IELRB determined that Northern Kane should indeed be considered a public employer subject to the State Public Educational Employer Act.  The school’s administration appealed the decision to the appellate court, which is where the case remains.

Started in 2002, Civitas is a LLC whose sole member is CICS.


May 22, 2009 in Federal – Executive, In the News, State – Executive | Permalink | Comments (0) | TrackBack (0)

Human Rights Groups Call On Jordan to Scrap Proposed Amendments to Law Regulating NGOs

Human Rights Watch and Euro-Mediterranean Human Rights Network wrote a letterto Jordan's Prime Minister, Nader al-Dahabi, calling upon Jordan to scrap its proposed amendments to a law regulating NGOs and instead propose a new law that would guarantee freedom of association. In their letter to al-Dahabi, the 2 groups called on the government to revisit aspects of the 2008 Law of Societies limiting the activities and membership of NGOs and their ability to function independently from the government. 

In 2006, a coalition of Jordanian NGOs proposed a draft law, but the government rejected it, instead submitting an alternative draft law to parliament that was more restrictive than the old Law of Charitable Societies of 1966. Parliament approved the government's draft with minor changes in 2008, and King Abdullah signed it into law in December 2008. An outcry by local and international NGOs prompted al-Dahabi's government to offer a new round of consultations with NGOs under the aegis of the Social Development Minister, Hala Latouf. But the resulting amendments proposed by the government fell short of NGO expectations. The parliamentary session expected for June is to vote on these government amendments. 

The current law prohibits associations from pursuing any "political objectives" and activities that violate "public order." Both terms are broad and invite governmental abuse. The law also discriminates against non-Muslim religious organizations, by restricting the activities they are allowed to engage in.  Further, in violation of Jordan's international treaty obligations, it excludes non-Jordanians and children from establishing associations in Jordan.  The 2009 proposed amendments would ease the process of establishing an association by describing more clearly the duties of the registrar of associations, but they continue to grant the government ultimate political control to decide whether an association can incorporate. The inclusion of a right to challenge such denials judicially provides inadequate redress, since the law includes no criteria for denying permission and the government could act lawfully by denying permission without reason. The 2 groups argued that the 2009 proposed amendments do not address the 2008 law's disproportionate government control over the work of NGOs, requiring them to submit annual plans to the government in advance, to admit government officials to meetings, and to seek prior approval for any foreign funding. The 2008 law also allows the government to remove an NGO's management and replace it with state functionaries and to dissolve the NGO for repeating minor infractions of the law. The new amendments would actually increase governmental control, allowing it access to an NGO's finances at any time without cause or a judicial warrant. According to the 2 groups, such measures make it difficult for associations to operate independently of government. 


May 22, 2009 in In the News, International | Permalink | Comments (0) | TrackBack (0)

NYT Offers Ways to Make Smart Gifts to Charities In This Economy

The New York Times offers ways to make smart gifts to charities as the economy suffers.

NYT suggests that people focus on how to do the most good in this stricken economy.  According to Peter Frumkin, a sociologist at the Lyndon B. Johnson School of Public Affairs at the University of Texas, donors operate from either of two “master theories of giving.”  One theory is direct service to individuals; the other is change through advocacy and public education.  In tough times, people tend to gravitate toward direct service because they want something concrete from their giving.  Direct service is like buying bonds and advocacy is like growth stocks and so in tough times donors re-balance their giving portfolios into safer investments.

According to the NYT, many charities face not just tough times, but disaster. At some organizations, volunteer trustees, especially those on the finance committee, have grown accustomed to monthly projections of income and expenses that are soaked in ever more red ink.  Nationwide, charities are reporting that donations are flat to down sharply, especially for organizations that rely on gifts of appreciated stock. This year, Americans are likely to harvest $426 billion in capital gains, less than half of the nearly $875 billion harvested in 2007, according to Citizens for Tax Justice, which calculated its own figures after the Congressional Budget Office decided in January not to issue its annual estimate.  NYT reports that with tax revenues falling, governments are tightening up on contracts with nonprofits and delaying or canceling new grants even though pleas for help are rising among social service agencies.

NYT provides three techniques to consider: conversion, deferral, and triage.  Conversion is a strategy for those who have a multi-year pledge to an endowment of a charity that needs operating cash now.  Endowments are intended to build long-term stability, but without money now an organization or other agency could be forced to curtail operations sharply or to close.  In a conversion, a person proposes that this year’s endowment gift go all or in part to operating funds the charity can spend immediately.  

Because pledges can be enforceable promises, NYT advises readers who need to make a deferral to get a written agreement that they are either reducing their commitment to the endowment or are extending the payment period.  The article suggests raising the issue by sending the charity a written notification along the lines of “my commitment to you remains intact, but I don’t have liquidity right now; when we have it my gifts will resume.”

Some fund-raising executives may press for a more specific timetable. How long it will take for the stock market to recover is speculation, but Allen Sinai, chief economist at Decision Economics Inc., told clients that he thought the market had begun to recover. He cautioned, however, that “our expectation is for a very muted bull market because the U.S. will not produce much in the way of capital gains realizations,” in part because investors have so many losses they can use for tax purposes to offset future gains.

The third technique is triage: separating out charities that will not survive without your support, and trying to assess whether they are worth saving. Letting some nonprofits go out of business troubles many donors, yet it clears out duplication and inefficiency, as well as organizations whose time has passed.  NYT cautions donors to think carefully about scale because the larger-is-better model isn’t always the best.  Professor Frumkin believes few donors would openly risk letting a smaller nonprofit fail by withdrawing support. Instead, he said, they tend to change larger gifts into small gifts, which he calls “nuisance grants.”


May 22, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

Thursday, May 21, 2009

Russia Creates Working Group to Draft Changes to Federal Law Affecting NGOs

In an order released on May 12, Russian President Dmitry Medvedev createda working group to draft changes to Russia's law on non-commercial organizations (NCOs). Approximately 35% of Russian NGOs are registered as NCOs and the rest are registered under different legal forms.  The working group, composed of representatives of the presidential administration, the Ministry of Justice, the Duma and Federation Council, and civil society, is to submit proposals within three weeks of May 8, the date the order took effect.

A coalition including Human Rights Watch and Russian human rights organizations urged the working group to adopt proposed reformsin order to guarantee the right to freedom of association.  "President Medvedev's directive is a first step toward removing the choking restrictions on Russia's NGOs," said Holly Cartner, Europe and Asia director at Human Rights Watch. "The working group has a chance here to make real changes and to end government interference so Russia's civic life can flourish."

At a meeting with the members of the Presidential Council for Civil Society Institutions and Human Rights on April 15, Medvedev acknowledged the difficulties faced by NGOs, including restrictions "without sufficient justification," and the fact that many government officials view NGOs as a threat.   At the time, Medvedev stated his willingness to review the law.  Thousands of organizations have been denied registration, liquidated and harassed under Russia's existing NGO law.  NGOs are calling for a reform process that takes their experiences into account in a procedure that is open and consultative.

In his order and public statements, President Medvedev has not committed to specific reforms. Because the effort under way only touches on one subset of NGOs, the working group will not address the regulation of a majority of organizations. Moreover, any reforms that result from the panel's work will not change limitations on foreign grant funding introduced by Prime Minister Vladimir Putin in 2008.

Russia's 2006 NGO law subjects Russian and foreign NGOs to intensive government scrutiny and interference contrary to international standards on freedom of association.  The law grants state officials excessive powers to interfere in the founding and operation of NGOs. Organizations may be denied registration for presenting documents "prepared in an inappropriate manner" or if an organization's activities are considered objectionable. For example, the Ministry of Justice rejected the registration application of the Tyumen-based Rainbow House, whose advocacy for the rights of lesbian, gay, bisexual, and transgendered people was found to undermine the "sovereignty and territorial integrity of the Russian Federation." Other organizations reported having to submit and resubmit registration documents several times because of minor errors identified by the Ministry of Justice in their founding documents. 

Further, under current law, NGOs can be warned for a wide variety of minor violations, including not filing timely activity reports or errors in founding documents. Two such warnings can result in liquidation, the only presumptive remedy for violations prescribed in the law.  NGOs are also required to submit yearly reports, which combined with audits can take up large amounts of time.   Many NGOs are also vulnerable to being targeted under the 2002 Law on Countering Extremist Activity, which designates certain forms of defamation of public officials as extremist.  NGOs and activists that are outspoken on controversial topics of Russian government policy are frequently targeted under this law.  

 Human Rights Watch, the Moscow Helsinki Group, AGORA, the Youth Human Rights Movement, and the Human Rights Resource Center submitted a list of proposed reforms for the NGO law to the Ministry of Justice in April and to the Presidential Council for Civil Society Organizations and Human Rights in early May.  These proposals are based on four principles for regulating NGOs that spring from Russia's domestic and international human rights obligations: government actions should be lawful; authorities should not interfere with the groups' activities; the authorities should presume that NGOs  operate with good faith; and government action should be transparent, easy to understand, and predictable.

The Committee of Ministers of the Council of Europe, of which Russia is a member, adopted a recommendation in 2007 that minimum standards should be respected concerning the creation, management, and the general activities of NGOs. A recent review of Russia's NGO legislation by the Council of Europe's Expert Council on NGO Law, established to evaluate the conformity of member states' NGO laws and practices with Council of Europe standards and European practice, criticized Russia's NGO registration procedure, concluding that it "needs to be seriously simplified and built on straightforward bases."


May 21, 2009 in International | Permalink | Comments (0) | TrackBack (0)

Nonprofit Sues Arizona Claiming New State Law Emptied Government Fund Benefiting the Nonprofit

Faced with budget problems, Arizona swiped $22.5 million from its 21st Century Competitive Initiative Fund, leaving Science Foundation Arizona with $18.4 million in unpaid reimbursements, the nonprofit claims in Maricopa County Court. The nonprofit, which uses research and development to diversify the state's economy, says Arizona Senate Bill 1001, signed into law on Jan. 31, emptied the fund of $22.5 million and dumped it into the general fund. The plaintiff argues that Arizona failed to make payments of $6.2 million and $10.7 million in November and December 2008, noting that the state had a cash flow problem,  forcing the plaintiff to advance "the private portion of grant payments to pay for the research work needed early." 

Science Foundation Arizona seeks a writ of mandamus ordering the state to pay it $18.4 million. The Arizona 21st Century Competitive Initiative Fund was established in 2006 to create "a partnership between Arizona and the business community to fund various research and development programs in partnership with private entities throughout the state, in an effort to diversify the state's economy and create higher paying jobs," according to the complaint. The contract between the Arizona Commerce and Economic Development Commission and Science Foundation Arizona outlined what would happen if the state "needed to either suspend or terminate the contract because of a lack of funding or if the State wanted to terminate for convenience," according to the lawsuit. The contract allowed the state to terminate "for convenience" upon 30 days written notice, but provided that the contractor "[would] be entitled to receive just and equitable compensation for that work completed prior to the effective date of termination." The foundation had $7.6 million from grants that were awarded in 2007 and continued in 2008 and 2009. The foundation says it spent the money but was not reimbursed by the state.


May 21, 2009 in State – Legislative | Permalink | Comments (0) | TrackBack (0)

Financier J. Ezra Merkin Agreed to Step Down as Manager of His Hedge Funds and Place Them in Receivorship

The Wall Street Journal reports that financier and money manager, J. Ezra Merkin, agreed to New York Attorney General Andrew Cuomo's demands to step down as manager of his hedge funds and place them into receivership.  Cuomo charged Merkin with civil fraud last month for funneling $2.4 billion from universities and nonprofit organizations into Bernard Madoff's firm.  Cuomo alleged Merkin "betrayed hundreds of investors" by repeatedly lying to them about how he invested their money.  Attorneys from Cuomo's office presented the agreement to Justice Richard Lowe III in New York State Supreme Court on Tuesday morning.  

The agreement means Merkin will no longer control his three hedge funds: Ascot, Gabriel, and Ariel. Two receivers were named to manage the funds.  One receiver will be responsible for managing the remaining money, nearly $1 billion, in the Gabriel and Ariel funds. Another will oversee Ascot, whose entire $1.8 billion in assets were lost in Madoff's Ponzi scheme.  Cuomo is expected to submit a formal agreement next week, giving time to New York University to review the agreement.  NYU, New York Law School, and Mortimer Zuckerman's charitable trust have sued Merkin as well.  

The trustee in charge of recovering Madoff investors' assets, Irving Picard, has also recently sued Merkin seeking the return of about $558 million that his funds withdrew from Madoff's firm.


May 21, 2009 in In the News, State – Executive | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 19, 2009

TIGTA Issues Audit Report on 2004 Political Activities Compliance Initiative

The Treasury Inspector General for Tax Administration has issued an audit reporton the IRS' Political Activities Compliance Initiative for the 2004 election season at the request of the Senate Finance Committee.  The Initiative involved examinations of section 501(c)(3) organizations for possible violation of the political campaign intervention prohibition - i.e., for supporting or opposing candidates for elected public office.  Several interesting points from this report:

*  Most But Not All Exams Closed:  Four and a-half years after the election, the IRS has managed to close 107 of the 110 examinations that were part of the Initiative.  The report does not indicate why three examinations remain open, or how quickly the IRS ended the closed cases.  An earlier TIGTA report criticized the IRS for not meeting its own timeliness standards for processing alleged political activity referrals, although that report focused on the time between receipt of a referral and notification of the organization involved rather than on the entire time period before closure of an examination.

Few Penalties Imposed:  Consistent with previous reportsby the IRS, the IRS resolved the vast majority of cases where the IRS determined political campaign intervention had occurred by issuing a written advisory with a warning and no penalty (48 of 54 cases, based on the 99 cases TIGTA could review and after correcting for miscoded cases (see below)).  In only six cases did the IRS revoke the organization's tax-exempt status, and in no case did the IRS impose the excise tax available under Internal Revenue Code section 4955.

Most Referrals from External Sources:  TIGTA found that individuals from outside the IRS provided the highest number of referrals (approximately half) and with watchdog organization referrals, accounted for 74 of the 110 examinations.  IRS employees were the sole source of a referral in only 17 of the cases.  The remaining cases involved both IRS and outside source referrals.  A previous TIGTA report found that the IRS processing of such referrals was not inappropriate in any way, such as being subject to political influence.

Miscoding, Missing Records, and Missing Determinations:  Perhaps most troubling is the fact that TIGTA discovered a number of recordkeeping and communication problems.  These problems included 14 cases that were improperly coded as involving prohibited political campaign intervention, when the actual finding was of no such intervention, the inability of the IRS to locate 19 of the closed examination files (although it found some information for 11 of those cases), and the failure by the IRS to state whether prohibited political activity had occurred in 15 of the closing letters sent (out of the 99 cases TIGTA had sufficient information to review).

While TIGTA did not evaluate the conclusions of the IRS examiners, it did note that most (75%) of the examinations involved only a single possible infraction, most (70%) of the examinations involved local as opposed to national or international organizations, and approximately half (47%) involved churches with the rest focusing on other types of charities. 


May 19, 2009 in Federal – Executive, Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Senate Finance Committee Considers Modifying Tax-Exempt Hospital Requirements

The Senate Finance Committee has published a description of various policy options for financing comprehensive health care reform.  Among the many options listed is modifying the requirements for tax exemption of hospitals.  Here is the full text of the proposed modification options (citations omitted):

"The Committee could consider a policy option that would codify organizational and operational requirements for determining whether a hospital is a charitable organization for purposes of section 501(c)(3) tax-exempt status.

Such requirements include, among other things, that section 501(c)(3) hospitals regularly conduct a community needs analysis, provide a minimum annual level of charitable patient care, not refuse service based on a patient's inability to pay, and follow certain procedures before instituting collection actions against patients.

Certain hospitals that are critical to the communities they serve or which have an independent basis for tax exemption (e.g., as an educational or scientific research organization) are excluded f

rom the minimum charity care requirement. The proposal includes provisions designed to ensure proper reporting and transparency of operations. In addition, the proposal provides for excise taxes, or 'intermediate sanctions,' designed to encourage compliance with the operational requirements. These intermediate sanctions could be imposed, for example, in situations where revocation of tax-exempt status is viewed as inappropriate."


May 19, 2009 in Federal – Legislative, Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Folkerts: Do Nonprofit Hospitals Provide Community Benefit?

Laura J. Folkerts (J.D. 2009, Iowa) has published Note, Do Nonprofit Hospitals Provide Community Benefit?  A Critique of the Standards for Proving Deservedness of Federal Tax Exemption, 34 J. Corp. L. 611 (2009.  The full text of the article appears to be available electronically only through Westlaw, but here is the conclusion (citations omitted):

The community benefit standard has been an ineffective measure of the deservedness of nonprofit hospitals to receive tax exemptions. For at least 17 years, many nonprofit hospitals have received tax exemptions greater than the value of the community benefit they provided. The Senate Finance Committee's staff, keenly aware of the ineffectiveness of the community benefit standard, has proposed reforms in this area. The IRS, also aware of the need for improvement in the reporting requirements of § 501(c)(3) hospitals, recently redesigned Form 990 for the first time in nearly 30 years. These actions do not go far enough. Congress needs to enact legislation, substantially based on the Committee staff's proposals, that will ensure § 501(c)(3) hospitals are deserving of their tax exemptions. This legislation needs to define all critical terminology, as recommended in Part IV.B. The IRS needs to strictly enforce this legislation and impose sanctions on all hospitals that violate the standards. Additionally, the IRS needs to refine and strictly enforce its redesigned Form 990. Together, these recommended actions will promote transparency, accountability, and--most importantly--deservedness of tax exemptions.

(Hat tip: Tax Prof Blog)


May 19, 2009 in Publications – Articles | Permalink | Comments (0) | TrackBack (0)

Monday, May 18, 2009

Dallas Museum of Art Refuses to Disclose Contract for King Tut Exhibit

The Dallas Morning News reports that in January, the Dallas Museum of Art (DMA) refused its formal request for a copy of the "Tutankhamun and the Golden Age of the Pharaohs" exhibit contract because the DMA promised exhibit organizers absolute confidentiality.  The Dallas Morning News made its request based on a state law requiring most nonprofit organizations to make their financial records public. However, the museum refused to discuss basic contract terms and will not say how many people saw the exhibit for free.  The DMA said it does not compile statistics on ticket sales or average price per ticket; that's under the organizers' control.  DMA lawyer Gary Powell asserted that the state law on nonprofit groups applies only to those with "a specific problem – lack of accountability," and according to him the museum DMA was not such an organization.  "The DMA's Board of Trustees provides a very appropriate and vigorous oversight of the DMA's actions and ensures that the revenues and donations the DMA receives are used wisely and appropriately," Powell wrote in a letter to the Dallas Morning News.

Tom Kelley, a spokesman for the Texas Attorney General's Office, rejected the museum's legal interpretation.  "Nonprofits must comply regardless of the level of board oversight," he said. But he also noted that the law does not say whether a contract constitutes a financial record.  To assess the oversight issue, the Dallas Morning News asked to review minutes of DMA board meetings at which the Tut exhibit was discussed. The museum again refused, saying that they were confidential.

The Dallas Morning News also asked the city of Dallas for a copy of the Tutankhamun contract. City officials said they did not have one and had no right to see it.  The newspaper argued that the city had such a right because the DMA receives extensive public support.  The taxpayer-financed Convention and Visitors Bureau, for example, says it spent about $2 million to promote the exhibit. The city owns the museum building, the land and some of the permanent collection. It charges no rent. It spends millions on DMA utilities and other bills.  City lawyers referred the newspaper's request to the state attorney general's office. In April, lawyers there sided with the city, claiming that the  government has a right of access to private contractors' records only if the documents are maintained on behalf of the government.


May 18, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

World Bank Extends $540 Million to Ethiopia and Says Country Should Ease Regulations on NGOs

Nasdaq reports that the World Bank extended $540 million to develop basic services in Ethiopia and stated that the country should ease its regulations on NGOs.  Ethiopia adopted a controversial aid law early this year, under which any local group drawing more than 10% of its funding from abroad would be classified as foreign and subjected to tight government control.  The classification would effectively ban such associations from working on issues related to ethnicity, gender, children's rights, and conflict resolution. The $540 million is meant for basic services covering education, health, agriculture, water, and road projects under a three-year scheme.  The World Bank replaced its former scheme of direct budgetary support to Ethiopia soon after the disputed 2005 parliamentary elections there, which foreign observers said fell short of international standards. 


May 18, 2009 in In the News, International | Permalink | Comments (0) | TrackBack (0)

Former Albanian Minister of Labor Indicted for Mishandling Funds Aimed for NGO

Former Albanian Minister of Labor, Kosta Barka, has been indicted on charges of abuse of power for  the mishandling of public funds for Albanian children caught in family vendettas.  Prosecutors accuse Barka of mishandling funds and donations aimed for an NGO that ran a school for children of families caught in blood feuds, in the town of Polican, close to the city of Berat.  The ancient vendetta code of the Kanun still holds sway in some remote areas in Northern Albania, producing conflict between families, often resulting in them barricading themselves in their houses for years.  The center in Polican hosted children from these families in order to provide them with an education.  An investigation by local media in January showed that children hosted in the rehabilitation center were malnourished and badly fed.  A subsequent government investigation showed that the NGO running the center was not licensed. The ex-minister is accused of granting public and donor funds to the unlicensed NGO, which mishandled them.

Barka is the third minister of the centre-right government of Prime Minister Sali Berisha, indicted on abuse of power related charges.   Although voted in by the current centre-right majority, Albania’s General Prosecutor Ina Rama has come under almost daily attack by government officials or pro-government media, for investigating high level corruption within the government of Prime Minister Sali Berisha.  


May 18, 2009 in In the News, International | Permalink | Comments (0) | TrackBack (0)

Sunday, May 17, 2009

IRS Political Activities Ruling on Gov. Perry Supporter Funded Foundation

Following up on an earlier post, the IRS ruling relating to the Niemoller Foundation is available on the website of Liberty Legal Institute, the group that defended the foundation. 

(Hat tip: John Pomeranz)


May 17, 2009 in Federal – Executive | Permalink | Comments (0) | TrackBack (0)