Thursday, August 8, 2019

NOM failed - It is also corrupt (UPDATED)

Aside from all the failures, Brian S. Brown has benefited personally from companies that NOM did business with.
Ethics questions surround Brian S. Brown
via FoxNews/YouTube
UPDATE (August 8, 2019): Someone sent me an email saying that she could not follow this post. On review, I agree. Allow me to bottom line this.

This was a very limited review of just one (of many) PACs and one 501(C)4 nonprofit entity during just one (of many years). At Brian S. Brown's direction NOM funded ActRight Action with a grant of $200,000. $80,000 of that went back to Brian Brown as additional salary. Another $40,000 went to Neil Corkery.

Moreover, ActRight Action started a political organization (a "527"), ActRight Fund. Some of the money donated to the fund was redirected to for-profit companies controlled by Brian Brown.

There is much more to this but you get the idea. Secondly, I used the term "transient grant." The correct term is reciprocal grant. I have highlighted the change in the text in red.


Some of you have noticed that NOMblog is history and that begs a larger discussion. In my world people are judged by earnings. The best managers try to instill a quality culture into their organizations to ensure that they are collectively planning for long-term results in contrast to instant gratification.

Brian S. Brown's orbit is different. He is judged — I think — for his piety and the supposed importance of his cause, over and above accomplishments. In much of the nonprofit world there is little concern for the quality cycle and management development. Training is task-oriented rather than mission driven.

The best predictor of future performance is past performance. Yet NOM is still around because donors are attracted to the cause which allows them to ignore the lack of results.
The continuing misadventures of Brian S. Brown
NOM

I see that the website of National Organization for Marriage still has a dead link to the now deceased NOMblog. Amazing lack of attention to detail. By the way, according to the Internal Revenue Service, NOM and NOM-Ed are now located in Rockford, IL (the same address as Howard Center — see below).

Information from NOM's tax returns (Form 990) is suspect. There are errors on almost every filing. Furthermore, there might be off balance sheet transactions with offshore sources of money. Someone must be paying Brian Brown.

NOM does not require arcane analysis. The bottom line is that, on a consolidating basis, NOM has burned through $70 million and has nothing to show for it. NOM's one victory was the passage of California Proposition 8 and that was overturned in 2010 by US District Court Judge Vaughn Walker. An appeal was denied in by the US Supreme Court in 2013.

In addition to the $70 million, millions of dollars might have flowed through NOM's PACs (I have decided not to audit them), none of which were successful.

I am reminded that Mr. Brown decided to spend about $600,000 to sue the IRS. NOM received a settlement of $50,000 to compensate for the Service's inadvertent error. If I ever did something like that … Aside from getting abruptly shit-canned I would find it impossible to find another comparable position.

NOM controlled four 527 organizations: NOM California PAC, NOM PAC New York, NOM Rhode Island PAC and NOM Maine PAC. Those are all gone.

ActRight

The ActRight entities were initially funded by at least one $200,000 grant from NOM Educational Fund in 2012. We do not know what expenses NOM might have covered. Nor do we know if there were any reciprocal grants. (NOM provides a grant to XYZ which then uses part of that grant to provide a grant to ActRight). In 2012 NOM paid out grants of $6.3 million. (Those were the days.) I am disinclined to review the tax returns of the grantees.

In 2013/2014 I identified four entities. There could have been others. The four were ActRight Educational Trust, ActRight Action, ActRight Compliance Services (now an assumed name for Omni Compliance Services, a for-profit corp) and ActRight Legal Foundation. In addition I did not see that ActRight Engagement (now an assumed name for Omni Engagement, a for-profit company) was part of the mix,

In 2013 ActRight Legal had revenues of $1.7 million. Some of that was in legal fees from NOM. ALF paid out over $700 thousand in compensation (supposedly none to Brown who was then the organization's chairman). It raises a number of questions that no one seems to have asked.

ActRight Legal Foundation is now Public Interest Legal Foundation. Brian S. Brown is no longer chairman. He is now a board member.

In 2012, Brown received $40,000 from ActRight Action (a 501(c)4) and another $40,000 from ActRight Fund (a 527). In 2013, Brown was able to take a salary of $15,000 out of ActRight Educational Trust and another $15,000 out of ActRight Action — above and beyond the $230,000 that he was paid by NOM. The fact that NOM provided at least some of the start-up money should have caused concerns for some of the adults on NOM's board of directors.

Two ActRight organizations (ActRight Compliance and ActRight Engagement) were for-profit operations. Some of their revenues might have been derived from NOM. We have no idea whether Brian S. Brown was compensated by these companies.

In addition to the 501(c)3, 501(c)4 and for-profit organizations there were four ActRight 527s (political organizations): ActRight Fund, ActRight Non-Federal Fund, ActRight Virginia and ActRight Wisconsin.

I reviewed the 2012 third and fourth quarter reports of just one of these; ActRight Fund (a 527) which, of course, was filed a year late. About $325 thousand (year to date) came from ActRight Action - supposedly a loan repayment. Yet ActRight Fund paid ActRight Action $40,000 as a loan repayment. This payment was at the same time that ActRight Fund was receiving loan repayments.

In those two quarters ActRight Fund (the 527 PAC) paid ActRight Engagement (a for-profit company) about $35,000.

In 2012, the two for-profit companies, ActRight Engagement and ActRight Compliance paid ActRight Action (a 501(c)4) a combined $675,000. At the time the two for-profits were listed as subsidiaries of ActRight Action.

ActRight Engagement was a joint venture with someone by the name of Darian Rafie. It's anyone's guess how they acquired $675,000. Meanwhile ActRight Action loaned $40,000 to AR Engagement.

Brown has related entity money flowing to and fro all over the place. ActRight Engagement, for example, was getting money from ActRight Fund (the 527). Some of that ended up at ActRight Action (the 501(c)3) from which Brown received $40,000 and which was initially funded by NOM.

There is much more and my primary focus was limited to 2012.

A considerable effort by a forensic accountant would be required to untangle this mess. Brian S. Brown is not a smart man. I suspect that Neil Corkery was the evil genius behind all of this. Corkery was receiving $40 thousand/yr from ActRight Action and another $40 thousand form ActRight Education. He is, or was, an officer of all of these companies.

I have cordial relationships with a few far-right conservative Christians. They are not all dummies. Okay, Ryan T. Anderson is an imbecile in spite of the PhD. Tony Perkins is a few circuits short of a cyborg. Mat Staver is too damned crazy for anyone to assess his intellect. I'll stop there.

The point is that no one on NOM's board seems to have reviewed all of the possible conflicts of interest. The bottom line is that NOM provided start-up funding and did business with for-profit and nonprofit companies that Brian S. Brown had an interest in and from which Brian S. Brown financially benefited.

Fast-forward to 2019:
  • ActRight Fund (527), gone.
  • ActRight Non-Federal Fund (527), gone.
  • ActRight Virginia (527), gone.
  • ActRight Wisconsin (527), gone.
  • ActRight Engagement (for-profit Omni Engagement) dissolved.
  • ActRight Compliance (for-profit Omni Compliance Services), dissolved.
In case you are keeping score at home, six entities are in rigor mortis plus the four NOM PACs.

Act Right Action and ActRight Educational Trust are still among the living. But (you knew that there would be a “but”) they are now so small (revenues less than $50,000) that they file their tax return by e-postcard. I could bust balls and request copies (Brown is listed as the contact) but I have better things to do. I can also get them from the Service. It's not worth the time it takes. These two entities are in an irreversible coma.

Just to recap; two entities on life support (NOM and NOM-Ed); ten have died and two are in irreversible comas. That is quite a track record.

Howard Center For Family Religion and Society

Howard Center includes World Congress of Families and International Organization for the Family. The principal activity of Howard Center is World Congress of Families. We cannot assess the health of Howard Center because WCF seems to be largely funded by odious Russian oligarchs off balance sheet. I requested an opinion from the IRS about whether or not it is acceptable to hide these transactions. The answer that I received is essentially “possibly” which means “we don't know.” Thanks fellas.

In any event, Mr. Reverse-Midas has been hard at work. Revenues for the Howard Center for the fiscal year ended September 30, 2017 declined about 27% from $739,160 to $577,097. The organization took a loss in the most recent year of $147,309 and has a negative net worth of $164 thousand.

It might not be as bad as it looks due to heavily depreciated land, buildings and equipment. The cost basis of land and buildings was $165 thousand which has been depreciated down to $12 thousand and possibly worth considerably more than cost.

Nevertheless, the cash flow is awful and, without foreign money flowing to WCF, Howie could be in big trouble. Some of that (speculated) money could be covering expenses that would otherwise be the responsibility of Howard Center.

It looks like they filed a three month return for the year ended December 31, 2017 creating a change of fiscal year to calendar year. We do not have the 990 but it looks like they lost more money with assets declining another $30 thousand over three months. Revenues were $200 thousand but there is nothing to compare that to. On average, non-profits receive nearly one-third of annual revenues in December alone. So who knows?

According to available 2017 tax returns, Mr. Brown has no source of income. No salaries. My guess is that he is receiving money from foreign sources, possibly Russians. There are other possibilities including for-profit organizations and nonprofits that I am unaware of. Howard Center is a black hole. My guess is that Brown will muck it up just as he has ruined every other venture that he has been involved in.

As I said, in this orbit Brian S. Brown is being judged primarily on his piety in contrast to his organizational successes. Brown is a zealous Catholic convert. In spite of all his sanctimony there is at least the appearance that Brian S. Brown benefited from improper transactions between NOM and other companies that he had a financial interest in.

Mr. Brown is not alone. As chairman of the board of NOM, John Eastman's law firm received around $600,000 and it would seem that he had undue influence on Brown to chase a lawsuit that was absurd at the outset. Yet Eastman is still chairman of NOM's board. One has to wonder if others benefited from those funds paid as legal fees.

But there is more corruption. NOM is a 501(c)4. Donations are not tax deductible. NOM Education Fund is a 501(c)3. Donations are tax deductible. We know that NOM used NOM-Ed as an improper conduit to have tax-deducted contributions finance unqualified activities of NOM. In spite of all the self-righteousness, all the religious zealotry, NOM is unscrupulous. That falls on people starting with Brian S. Brown, Robert P. George and Maggie Gallagher.

Brian S. Brown lies every day. He misleads donors regarding how their contributions will be used. Holier than thou yet rotten to the core.

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