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July 14, 2010 07:44 AM UTC
39 Comments
That passage about McInnis’s work for the foundation sounds to me like it was written in response to the allegations. The last sentence in that first blockquote begins, “In light of recent inquiries about Mr. McInnis’ work as a Foundation Fellow…” I’d love to see what this page had to say two days ago.
Now, we know that they declined to tender him a renewal of his fellowship, so I think your observation that they were disappointed with his work back then is true. But, like in Barron X’s diary where he poses the questions of what Scooter knew and when he knew it, I think it’s fair to ask what the people at the Hasan foundation knew and when they knew it, too. The questions raised here and by other polsters in other diaries are really making me wonder if this won’t result in an investigation of the Hasan Foundation.
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I know little about IRS rules for non-profits. I founded one once, and registered it with the IRS, but it was penny-ante compared to this.
Keep in mind that the purpose of such a foundation is to give money away. Hopefully it results in some good art or some good research or some happy kids or some such public benefit. But even if it doesn’t, it accomplishes its purpose in the giving, not in the outcomes, which it cannot control.
The only way such an organization goes astray, to my thinking, is if they use the Foundation for personal benefit, avoiding taxes on what should be a taxable transaction. There isn’t even a hint of that here.
Bottom line: it’s their money, and they can give it to whoever they want. And if it is given away in a manner that meets legal requirements, it can be done without being taxed.
The Foundation has to file a tax return each year. I think the IRS looks at a non-profit’s charter and looks to see if its activities and funding decisions are consistent with that.
Overall, a charitable or other non-profit Foundation is exempt from federal taxes because it is doing “good work” or contributing in some way to the overall benefit of the community.
Although I see a mismatch between the mission on the website and what McInnis was funded to do, that is a concern for the donors, not the IRS. I assume that the donors are fine with that.
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Point of clarification:
I think that the “relatively recent” changes on the website reflect a reaction to Jason Salzman’s determined pestering, not the plagiarism allegations. To me, it looks like the site hasn’t been updated in over a year, except for that. I don’t think that they responded to Monday night’s news by Tuesday morning, when I checked it out. When I checked this AM, there’s now a link to the Monday night letter.
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If you think that the Foundation was veering off from “doing good/ charitable works” into supporting a political campaign, that would probably call into question their non-profit status, but I haven’t seen any indication that that’s what happened. I get the impression that McInnis was a family friend, just out of work, and I assume he pitched the whole idea of a research grant to the Hasans, not the other way round.
What he proposed sounded worthy and reasonable, and so they agreed.
The $300K, by the way, was not a payment for a certain number of pages of articles, I don’t think. I think it was a $12,500 monthly stipend to do whatever he thought would help Colorado get a better handle on water issues, leaving all such decisions up to him. I assume they expected more along the lines of public meetings, advocacy at meetings involving allocation of available water, and educating state lawmakers. Instead, it looks like not much of that was done, and toward the end of the Fellowship he busily cranked out these articles to give the impression that he had done more than he really had.
Under a federal grant, a recipient is not obligated to produce a certain product or outcome; they are being supported so that they can devote a certain amount of effort to an agreed goal. If they don’t reach the goal, the grant was still earned. I assume its pretty similar for a private grant.
In discussing whether McInnis fulfilled the terms of his fellowship, don’t look at the number of pages. Look at how much effort he put into it. I think that’s what Mrs. Hasan was unhappy about, an insufficient effort, partly because he took a full-time job shortly after the fellowship started.
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The IRS investigates based on tips and complaints. Someone suspicious about the Foundation could notify the IRS about fishy goings-on, but what is fishy on their part in this case ? This is all on McInnis.
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No hint of problem here? Are you kidding? Giving money to the son of the funder and president of the Board for something not in their expressed purposes? Giving money to a politician with no real expertise in water who then obviously plagarizes work of another which is not caught by the Foundation and is not in their mission statement? Remember, the Foundation has to tell the IRS what it is going to give its money to. There are very, very strict regulations when money is given to individuals as opposed to government or other 501(c)(3) organizations. Gifts to individuals have to be strictly monitored. These gifts to individuals and especially the son of the funder and President of the Board are subject to very strict scrutiny. The problem here for the foundation is that these gifts, if disallowed, could have significant consequences to both the foundation and the funder of the trust. You may be cavalier about the gift to Ali, but I can assure you that the IRS will not be. You can’t simply make a tax deductible gift to a family foundation and then funnel the money to your kid. There are very strict controls on this.
It seems that the Foundation has done a lot of good work.
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I don’t.
I used to work with grants and cooperative agreements funded by the federal government for scientific research (USGS,) but I’m sure the rules are different for non-profits who are giving away private donor money.
I would benefit if you linked to a discussion, in layman’s terms, of the rules for this sort of foundation. A link to the tax code may not do the trick.
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I have the impression that Ali got his grants several years ago. I think the IRS has had plenty of time to look into those transactions.
Here’s the nub, as far as I can see:
the money in the foundation is still Hasan family money. They earned it; they donated it; they get to choose the recipients.
By routing the money through an established charitable organization, they get some tax benefits. In exchange, they accept some restrictions in how they hand the money out.
Seems to me they probably had an attorney and an accountant advising them on how the Foundation operates, and they probably met all legal requirements to dish some of the cash to Ali.
If you can summarize those legal hurdles that a non-profit foundation has to meet, then I can judge for myself if I think they operated improperly.
Craig, IIRC you are both a conservative and a Republican, (which I see as a bit of an oxymoron.) Would you hold the Hasan’s operation to a different standard than the Gill money tree, or the Stryker cash cow, or the fabled Open Society Institute ? I think that they also work through foundations.
I’m under the impression that most Gill and Stryker and Soros grants go to their friends and supplicants. How is this different ?
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I really don’t know much about this stuff. I think the Hasans can benefit from revealing why exactly they gave Scooter this grant. The press statement they issued was very brief on this point.
“… the Hasans can benefit from revealing why exactly they gave Scooter this grant”.
I think why is becoming increasingly obvious. Why do you pay an exorbitant sum to a pol for something you don’t need? Not much mystery there, if you ask me.
As for the post-plagiarism story outrage it strikes me as the classic “I’m shocked” feigned innocence reaction coupled with real outrage that the moron couldn’t even be bothered to create a semi-plausible cover for that kind of money.
there is more than enough dirt to go around in this story and McInnis isn’t the only who is going to be wearing it when all is said and done.
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$150K pa is a nice salary, but exorbitant ? Not really.
He had just left his post as a Congressman, where he made more than that. He was being considered for President of a college, where he would have been paid more. Shortly after he got this Fellowship gig, he was hired by a law firm who paid him much more than this.
Retiring Congressmen often go to work as lobbyists. Billy Tauzin went right from regulating Pharma to being their lobbyist, pulling down $1.2 M.
It’s a lot, but “exorbitant” is a mischaracterization.
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According to the Statesman, the Hasan Foundation paid McInnis this month because they were competing (they believed) for Scooter’s services. They mention that some college may have been considering him to be their president. (I wonder if that was true – if not, it’s another parallel with Churchill, who got fasttracked tenure at CU based on the rumor that a California college was about to offer him the same thing.) Clearly they expected him to work as a fellow full time.
But what happens next? McInnis takes a job with a DC law firm. Malik Hasan said he “was not thrilled with the news,” which I read as meaning he was fucking pissed. Scooter reassures them that he’ll still do what they paid him to do, but doesn’t.
So here we have another instance of Scooter’s problems with ethics. He must have told the Hasans he intended to do his fellowship work full time, which is why they gave him $300k for two years. But he almost immediately takes a full time job a with a law firm, thereby precluding any reasonable expectation to devote a substantial amount of time – enough to justify that grant – to water rights. (The article doesn’t say what work McInnis was performing for the law firm. Maybe if he was supposed to work on water issues, he expected to get double the mileage on his work. Which, if true, is still ethically questionable. Using the same term paper in multiple classes works in college, but not the real world.)
buying him; just for doing no work on reports for which they had no use. Kind of why I don’t believe it was what they were paying him for in the first place.
would have required him to do real work.
Viewed in the light of the fact that he didn’t appear to do much for his $300,000, it seems like a pretty sweet deal.
I really don’t know much about this stuff. I think the Hasans can benefit from revealing why exactly they gave Scooter this grant. The press statement they issued was very brief on this point.
Google cache is your friend.
July 4th (yes, many days BEFORE this scandal broke into the headlines).
Some enterprising blogger should go back through the actions of Rep. McInnis while on the Ways and Means Committee that may have benefited a certain business from Pueblo.
that the $300,000 was paid to McInnis to support Ali’s political ambitions. McInnis didn’t come through and the bitterness is a result of, not the plagarism, but of McInnis’s failure to assist Ali.
The timing of all of this coming out is a bit strange….after Ali’s campaign ends at the state convention but before McInnis’s primary.
Seems like it could be a bit of payback for a perceived slight…
And I listen to Coast to Coast.
As for the timing, a dedicated blogger kept bashing McInnis in these pages over his apparently nonexistent (at the time) writings. The writings surfaced months ago. Once the writings were in the public domain, it was pretty easy (that’s a deceptive word; it took hard gumshoe reporting) for the Paper of Record to check.
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I give you credit for creative thinking on this. But I have the impression that the Foundation only released the “Musings” to make Jason stop badgering them. And I seriously doubt that people at the foundation knew that they were plagiarized.
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the plagaism is the larger story right now, but the question remains: What did the Hasan Foundation hope to get for its $300,000? As is pointed out in this diary (and on the Hasan Foundation website) water use and issues is outside of the scope of their interest.
They may as well have paid McInnis $300,000 to study dung beetles. Neither are within their stated mission.
McInnis might have been able …
No: too easy.
The timeline is just a mere 3 years off. McInnis’s fellowship was not renewed when it came up in 2006.
And frankly, there’s nothing strange about the timing here if you’ve been paying the remotest bit of attention to Jason Salzman’s non stop pursuit of the water articles–this has been a story in the making for months.
There’s a second allegation of plagiarism from 1994–a RMN article that McInnis wrote six weeks after a WAPost op-ed piece about South Korea. Like most people who engage in abuse, I highly doubt this is McInnis’s first.
however, the “water articles” still scream of giving the former congressman “busy work” so that it would appear that he was doing something for the 300k they were giving him. As the above post shows, the Hasan Foundation is not in the business of water policy in the first place so, the question remains: what did the Foundation get for its $300,000? The plagaism is what is being focused on, but there is a larger question that needs to be answered.
I would hazard a guess that that is precisely what caught Mr. Salzman attention in the first place as well.
Much more info coming directly from Hasan family that may answer your question. And clearly, they didn’t get what they expected which is why they didn’t renew his fellowship. Where I come from, it’s called getting fired.
hoping to get and how does it fit with their mission?
They lay out pretty clearly what they were hiring him for, what they expected and what they ended up with.
It’s a fascinating read and it has information in it that I haven’t seen anywhere else.
It would be like the Colorado Fourteeners Initiative hiring someone to do research on offshore oil drilling.
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I believe that the mission of any foundation is an instrument for coalescing activities around a theme. I think its main purpose is to help persuade donors to give.
I don’t think that the IRS cares about the mission; I assume that the tax law is focused on whether or not the activities have a charitable or educational purpose.
If you are distressed that this Foundation might have strayed from its mission in a way that you do not approve, then the appropriate reaction would be for you to stop giving money to the Foundation.
You are also free to report to the IRS any violation of the tax laws. I haven’t seen anything to this point that even hints that tax laws were broken, but “show me the money” and let me make my own judgment.
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For a classic example of how “charitable” foundations can operate when out of sight of the public, or the small donors, look at the Nature Conservancy. Officers use their positions to enrich themselves and to give themselves, their friends and their biggest donors privileges unavailable to anyone else. They give themselves homesites and homes in exclusive nature preserves, for example, which are worth multiple millions of $$.
They are careful to stay within the letter of the tax law, but they privately scoff at the mission that they exploit to get the unwashed masses to donate.
If you want to know your charitable contributions are really being used for what you thought, give to Catholic Charities or the Salvation Army, who practice 100% disclosure. Anyone else and you’re having to take their word for it.
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For a nonprofit, the mission is very important. It defines the scope of work, the intent of giving and the purpose of the programs offered.
Your example of TNC isn’t appropriate because, personal feelings about their activities aside, they are engaging in practices as defined by their mission.
The Denver Foundation only funds programs and initiatives having to do with Denver. It doesn’t fund programs helping Greeley or Colorado Springs since it isn’t in the mission statement.
One of the most important parts of establishing a nonprofit is the mission statement, since it defines the organization for the present and future. If a mission statement is altered significantly it could affect donations, scope of work and board membership.
The Hassan Family Foundation’s mission is:
The IRS does care about whether a nonprofit gives money or provides programs outside its mission, since they are tax exempt entities. It is possible for non-profits to provide services that fall outside the scope of their mission, the Girl Scouts selling cookies is a good example. If a nonprofit does this, however, the money must be listed as separate than the money received for pursuing the mission. That unencumbered money may then be used for some administrative purposes or some other purposes, but not for furthering the mission, IIRC. If a foundation is allowed to spend their money willy-nilly with no sideboards placed on the intent of that money, there are plenty of opportunities for abuse – hence the importance of the mission.
There isn’t a bright line. The Red Cross, for example, received millions of dollars for humanitarian aid that never reached Haiti and was lost in the bureaucracy.
The Hassan Family Foundation, however, chose to use $300,000 of its money on a recipient and project that fell outside the scope of its mission and could be open to challenges about why and how that money was spent.
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the Mission Statement is important concerning taking money in. I agree completely with that.
The closest you come to arguing that the Mission Statement is important to how money is disbursed:
It appears to me that you circled back to a discussion about the relationship of the Mission Statement to COLLECTING donations, not disbursing grants.
If the IRS really does get worked up over spending outside the mission, but within the charter of the non-profit, you should be able to post a link.
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A nonprofit’s mission determines revenue as well as costs. Revenue, as you know, can be anything from federal grants to unrelated business income. Costs range from overhead to grants.
The mission defines the nonprofit. The mission is the reason for the tax exempt status. If a nonprofit engages in activities outside of its mission, they could lost their tax exempt status, as I understand it.
Just to clarify, I don’t know the Hassan Foundation, nor do I have an axe to grind. I thought it interesting as well that this Foundation would pay out $300K for something outside the scope of its mission, hence this conversation.
As far as a citation, check out
http://www.muridae.com/nporegu…
The Hassan Foundation modified its mission in 2001 to include
Personally, I don’t see anything in their mission nor on their website that would justify $300K for articles on water musings. This doesn’t mean they did something wrong. They could have paid McInnis out of pocket and not used money dedicated to the Foundation’s mission, although, that is still strange.
In addition, I don’t know if the Hassan Foundation is private or public. If it gets revenue from only a few people, it may be private, which means there are even more stringent regulations on it. Even the private foundations are limited to their missions.
I don’t know if the Hassan Foundation is a 501(c)(3) or has a different designation and I don’t know if they elaborated on their expenses when they filed their Form 990 to the IRS for whatever year they paid McInnis. I’m guessing that if the IRS didn’t make a stink about it, then they may not have noticed or the money McInnis received was broadly interpreted as fitting within the scope of the Foundation.
Also, McInnis was a Fellow. I don’t know what the rules are in regards to funding Fellows, but in my experience Fellows traditionally are chosen to advance the nonprofit’s mission.
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IIRC, when I chartered my penny-ante non-profit, I did it online, and the space for the mission only let me enter about 250 characters.
If the Hasan Foundation mission on file with the IRS is that short, it’s probably pretty generic. Mine sure was. And I had drafted a Mission Statement that was about a page long.
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when he was allowed to keep the job…and the pay…after accepting a full-time position with Hogan and Hartson.
or to buy your kids way… Form a foundation, give money to every group that could help w/ political ambitions, then when the favored son is ready… Oh wait, that’s CD2.
I’m no expert in foundations either, but I have looked into forming one in the past. Basically a foundation is granted an IRS Tax exempt status under 501(c)(3) and the purpose of the entity is that it is established for “charitable or educational purposes”.
Although as stated on the diary that McInnis’s work appears out of scope of what the Hasan Foundation’s purported mission is, the McInnis Fellowship probably doesn’t rise to any IRS issues because of the rather broad wording “educational issues”, and the purpose of the Fellowship was to educate the public on water issues.
Although much has been said about McInnis getting $300,000 for the paper, the paper was only part of the deal. As the Hasan statement says, McInnis was also expected to travel the state and participate in public forums discussing the subject and advocate water policy issues through the media, and it was expected he do this over the two year Fellowship. The statement makes clear the Foundation assumed McInnis would be able to access these public forums and the media by virtue of his standing as a former Congressman and State Legislator.(If some no name Joe Blow had written the article, presumably he would not have the platform to promote awareness of water policy that McInnis did. Just like a former president might get a $50,000 speaking fee while you and I might be lucky to get gas money).
So the question is now, what efforts did McInnis actually make? How many public forums or discussions did he appear at? What was his speaking schedule for that two years? How many articles did he write or advocate through other media the water policy views of his paper?
Since McInnis was expected to do these thing, one presumes there would be a record or log that is available.
Subpoena duces tecum.
I’m not saying the Foundation, or McInnis for that matter, may have violated the law. I’m just saying that, given the Foundation’s public mission statement, and the nature and size of its other contributions and grants, the grant to Scooter stands out as rather odd.
Why would a foundation dedicated to the arts and expanding Muslim understanding spend such a major sum on water policy – and why would they pay someone like Scooter, who had no academic training in the subject (and who obviously saw the need to hire an anonymous researcher and plagiarize other articles to make up for his lack of independent knowledge and experience)? It just seems very odd.
I think it would be appropriate for the Foundation and McInnis to simply release ALL documentation they have on this subject so that everyone can satisfy themselves as to whether the transaction was above-board. Maybe there’s a perfectly logical explanation.
And while he’s at it, McInnis could release his tax records and charitable contributions as well. This secrecy is not helping McInnis’ campaign at all at this point.
Muslims drink water.
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After all, he’s asking us to vote for him, and for the authority to run our state government. We need relevant info to make our voting decisions, and what you ask seems relevant. Accordingly, as soon as he drops out, this stuff is no longer any of our business.
But I don’t get why the Hasan Family Foundation should have to forfeit their privacy. Is it because conservatives should not be able to spend their money as they choose ?
Do you also demand that the Stryker Foundation open up their records to public examination ? They are responsible for far more harm to this state: the legislature is now blue, due in no small part to their interference.
If your problem is with the “mission statement,” maybe I can help you with that. Like any organization, the Hasan Foundation has at least 2 different missions. One is posted on the website, proclaiming what good things they hope to do for the community. It is not a straightjacket; it’s a general guide, intended to engender goodwill from the community. It is unrelated to tax compliance, so it can be changed – or broken – at will.
But each member of the board has their own private goals for the Foundation. When these are aggregated, the de facto mission is usually different than what is published.
You raise a stink because water research and education are not explicitly listed in the mission statement, but you acknowledge that these objectives would be perfectly acceptable if only they were listed ?
That’s silly.
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about the mission statement and whatever goals foundation boards might have. It’s a guideline, not a hamstring. A family foundation can do whatever it wants, so long as it stays within the law.