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RMG investigation leads to Patrick Administration late filing IRS paperwork for junket non-profit

by: Rob "EaBo Clipper" Eno

Thu Jun 21, 2012 at 23:13:14 PM EDT


On May 23, 2012 the Boston Globe wrote  about the Deval Patrick Administration's use of a non-profit to fund international trade missions.  The article stated that the non-profit was funded by businesses in the state.  A Red Mass Group investigation has determined that the non-profit, "Moving Mass Forward",  run by high ranking Patrick Administration officials, had not filed a tax return for the end of Fiscal year 2011.   The tax return was filed yesterday, June 20, 2012, with a plea for relief from penalties.

Upon learning of the non-profit, Red Mass Group sought to understand the corporate structure of the administration's travel funding operation.  A search of the Secretary of State's records turned up that articles of incorporation had been filed listing Economic Development  Secretary Gregory Bialecki as the sole, place holder, officer for all positions at the 501(c)3.  As of March 23, 2012 that was the only document filed with the Secretary of State's Office.  

Red Mass Group then tried further to locate who was running the non-profit and researched the non-profit on the Attorney General's website.  Not seeing the non-profit an email was sent to the Attorney General's division of charities, asking for assistance.  In addition a phone call was made to the press agent for the charities division.  The press agent informed Red Mass Group that as of May 23, 2012 the 501(c)3 was not yet required to file.

Earlier this week, the Division of Charities informed Red Mass Group that the administration's charity was not in compliance with the Attorney General.  This later turned out to be erroneous, as they actually had 18 months from their formation to register fully with the Attorney General.  Between learning of the erroneous "non-compliance" status and learning from those higher up in the Attorney General's office of their communications error, Red Mass Group contacted Secretary Bialecki's office.  

continued after the jump

Rob "EaBo Clipper" Eno :: RMG investigation leads to Patrick Administration late filing IRS paperwork for junket non-profit
The Department of Housing and Economic Development looked into the matter and determined that they had not in fact filed their Form 990 non-profit tax form for Fiscal Year 2011.  The form is due four months from the end of the fiscal year.  In this case, that date was in November of 2011. The tax return was filed, yesterday June 20, 2012 as a result of Red Mass Group's inquiry.  

In addition the administration took the extra step of filing, five months early, the required paperwork with the Attorney General, in addition to coming in compliance, before Red Mass Group's inquiry with the Secretary of State's office.

Jason Lefferts, a spokesman for Greg Bialecki said, ""Moving Massachusetts Forward takes transparency seriously, and documentation filed with the Secretary of State's Office and elsewhere provide details on its structure and financing that are available to the public. During a recent review of Moving Massachusetts Forward documents, some details were updated, including the structure of MMF's governing body. However, through an oversight not all required documents were filed. "  Lefferts continued, "Those documents were prepared as soon as possible to fulfill Moving Massachusetts Forward's filing requirements".

In addition to the statement, Lefferts provided Red Mass Group with the filings made both to the Attorney General's office and the IRS.

Moving Mass Forward Late Filing

Tim Buckley, the spokesman for the Massachusetts Republican Party had the following to say about the late IRS filing, "it is not surprising that the same people responsible for giving Evergreen Solar $10,000,000 would fail in filing the proper paperwork for their supposed non-profit.  Perhaps if they spent more time governing the state, instead of planning the next junket this would not have been overlooked."

Pam Wilmot, the Executive Director of Common Cause Massachusetts, who was very skeptical of the arrangement by which businesses were asked to fund the Governor's travels in the first place, said, "filing is not an option, it's a requirement, and it's distressing to see how many organizations apparently don't know this. Kudos to Red Mass Group, for keeping organizations on their toes and getting the proper papers submitted."

A follow up article will look at the management structure of Moving Forward Massachusetts.

Tags: , , , , (All Tags)
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WOW - While Greg Bialecki was F-ing around blogging on this site (0.00 / 0)
He should have been filing MMF's tax return.  And here I am thinking he's the typical government hack blowing off his day job as Patrick's Economic Development Secretary.

Good work Mr Bialecki!  

Molon Labe


I have never been so proud to be part of RedMassGroup.... (5.00 / 1)
Rob, this is real investigative work!  You made things happen and kept people accountable.  Good on you for the hard work.

The hackerama in the liberal wing of state government have a real person watching their tails now - Rob 'Eabo Clipper' Eno.  Channel 4, 5 and 7 can pack up and go home for all they are worth.  They couldn't break a news story with a sledge hammer and anvil.

Rob, you are quickly becoming my hero....

We are headed for a 'Fiscal Cliff' and the country just elected a dope whose motto is 'Forward'.  


It's nice that they rushed to file the paperwork... (0.00 / 0)
...but did they file the RIGHT paperwork?

While reading I was surprised that this was a 501-c-THREE, as that is a charity.  I would have expected a 501-c-FOUR, which is an educational non-profit.

C-3's are prohibited from political activity, and C-4's have much greater leeway to engage in some political activity.

Of course, as it is the business 'encouraged' to donate to the C-3 can write off the donations as a charitable deduction (just like it was the Red Cross or St. Vincent dePaul), and with a C-4 they couldn't (as that recognizes the political/lobbying activites inherent in its makeup).  I'm sure making sure the donors get the deduction is more important than the right classification.

Here's a link about the two - http://www.nonprofitlawblog.co...

Yr. Obedient Servant, Peter Porcupine, Republican


Technical points (0.00 / 0)
1: From the linked form 990, Assuming the organization is a 501(c)(3), and recall that a 990 is filed under PENALTY OF PURGERY, the non-profit received $130K during 2011 and spent $12 on expenses.

2: According to the Globe, the sources of the donations were:

The largest donation, $50,000, came from a charitable foundation controlled by John Fish, chief executive of Suffolk Construction,...Fish attended one leg of Patrick's trade mission to Israel and flew the governor's former chief of staff, lobbyist and political consultant Doug Rubin, to the mission on his private jet.

Jack Connors, chairman of the board of Partners HealthCare, donated $25,000 through his family foundation. The state is currently debating fundamental changes to the medical payment system, including controls on spending that could put pressure on the hospital group's high cost structure.

The State Street Foundation, the charitable arm of the Boston-based financial services giant, gave $25,000. State Street, which for many years had a contract with the state's pension fund, could pursue that business again when the state reopens bidding in coming months.

3: At least one of the trade missions occurred in 2011 (trip to Israel).

4: According to the IRS filing, there were no expenses AND the $130K (except for $12) was in the bank.  Get that? The non-profit didn't pay for ANY of the trade missions.  How could it?  It took $130K and spent zero.

5: There are no expenses for accountants or lawyers in 2011.  That tells me that unless someone is doing the application for exempt status pro bono, then the company isn't a qualified charity.  Wonder how the State Street Foundation, Jack Connors family foundation and Jack Fish's family foundation feels about making "tax deductions" which weren't tax deductible or in the case of a charitble foundation, possibly illegal.



Elizabeth Warren: a bankruptcy professor, bankrupt of ideas


[ Parent ]
So check THEIR 990's and see how the contribution was listed. (0.00 / 0)
Were their travel expenses on THEIR 990's?

Who are other non-501 donors?  Did they deduct their donations?

990's are filed in May, but can have the same August extension as other returns.  So bookmark investigating for Labor Day!

Yr. Obedient Servant, Peter Porcupine, Republican


[ Parent ]
Peter (0.00 / 0)
Nope.  It's a FISCAL year thing.  They are due 4 months after the end of the fiscal year. so the end of October

Full Disclosure


http://www.redmassgroup.com/pr...


[ Parent ]
Fiscal Year (0.00 / 0)
I think I'm missing your point on the Fiscal year thing.

My point is this:  Moving Massachusetts Forward took in $130K in the period ending June 2011 and the $130K was still in the bank at June 30, 2011.

The Globe reported that substantial funding for the trips came from the $130K that was contibuted to Moving Mass Forward during period ending June, 2011.

But, the 1st trip happened in March 2011 and Moving Mass Forward didn't spend a penny on the trip according to its filing.

So, who paid for the trip?  It wasn't Moving Mass Forward, OR it was Moving Mass Forward and the filing is wrong.


Elizabeth Warren: a bankruptcy professor, bankrupt of ideas


[ Parent ]
Rob - a 990 is a 1040. (0.00 / 0)
It's what  on a calender year accounting file with the IRS instead of a 1040, and covers the entire calendar year 2011.  Incorporated non-profits file a 990 instead of a corporate form because they don't PAY taxes.  990 filings are due in May (instead of April), althought as I said, they can have an extension until August. A non-profit with revenue over $100,000 must also have an independent examination of their books, and over $500,000 must have a full-blown audit.

BUT - "There is no one date on which all Forms 990 must be submitted to the IRS. Instead, a nonprofit's filing date is determined by the end of its fiscal year (the 12-month period for which the organization plans the use of its funds); each filing organization is required to file "by the 15th day of the 5th month after" its fiscal year ends."  Did Galvin's site say what Moving Mass Forward's accounting year is?  Because a June 31 date would mean a November 15 deadline.

But my question was about the DONORS - did the health care non-profit declare the donation?  did the for-profit 'donors'?

And I am STILL surprised they chose to be a charitiable c-THREE instead of a 'social welfare' c-FOUR.


Yr. Obedient Servant, Peter Porcupine, Republican


[ Parent ]
FY 2011 ended on June 30, 2011 (0.00 / 0)
Peter,

The fiscal year ended June 30, 2011

Full Disclosure


http://www.redmassgroup.com/pr...


[ Parent ]
F/Y 2011 (5.00 / 1)
Israel trip was in March 2011.

Elizabeth Warren: a bankruptcy professor, bankrupt of ideas

[ Parent ]
Adverstise here for as low as $60 per week.








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