The “not-for-profit” deception

Political class wealth redistribution (Part 7)

To some, the “not-for-profit” tag on a private corporation may conjure up thoughts of charity, sacrifice and selfless dedication to the public good. That notion couldn’t be further from reality for most non-profits designated as 501(c) organizations by the IRS.  The simple truth is, if you see the non-profit label on a private corporation the chances are it is at least in part a money laundering scheme to redistribute wealth from the citizen class to political class elitists.  The Dayton Development Coalition (DDC) serves as “smoking gun” evidence.  The good news is that non-profits have to file an annual tax return with the IRS to maintain their tax exempt status.  The bad news is you’ll need a forensic economist, CPA and attorney all working overtime just to sort it all out, but here’s what OCGJ learned from reviewing the Coalition’s mandatory tax returns filed with the IRS. (Source: Form 990 Foundation Center)

Actually the DDC keeps three sets of books; their own plus two other non-profits; Miami Valley Development Research Corporation, and Development Projects, Inc. All three private non-profit corporations share the same officers and a staff of 19 paid employees.  The DDC may be the most top heavy organization east of the Mississippi. In 2012 they had a President and CEO (Hoagland), a Chief Financial Officer (Harrison), and four Vice-presidents (Gessel, Zeis, Koorndyk and McDonald).  Those six averaged over $212,000 in compensation for managing a staff of less than 20, who in turn averaged about $66,000 in salary and benefits, the vast majority funded by the taxpayers.  The bottom line…..our elected officials are awarding unbid contracts to private corporations with little or no oversight on services which they are often not qualified to perform, or at best less qualified than other public organizations that may be willing to compete for the job. 

For example, without competitive bidding in 2003 Greene County elected officials sent $1.9 million to the DDC who in turn awarded an unbid economic development contract to The Greentree Group, an IT company with absolutely no expertise in public economic development. You also may find it interesting that Sam Greenwood, President and CEO for Greentree sat on both the DDC’s Wright Patt 2010 Committee and Advisory Board.  Three generations of Greenwoods made over $200,000 in campaign contributions to Dave Hobson, Steve Austria and other Ohio Republicans, including a $2,100 contribution in 2006 to U.S. Senate candidate Mike DeWine by Greenwood’s 12-year-old granddaughter. (Source: fec.gov)

The Dayton Development Coalition recently celebrated their 20th anniversary by parading seven “top-of-the-food-chain” political class elitists out on the Coalition website, singing the praises of the Coalition’s success in creating jobs in the Dayton Region. U.S. Senators Sherrod Brown and Rob Portman, House Speaker John Boehner, Congressman Mike Turner and Lieutenant Governor Mary Taylor fell all over themselves crediting the Coalition with every positive move forward in the Dayton economy since 1994.  That takes silliness to a new level as the business cycle has infinitely more to do with ebbs and flows in the local economy than a couple dozen overpaid feather merchants. OCGJ is not buying what Senators Brown and Portman, and others are selling.  Where was the Coalition from 1994 until 2009 when DHL, NCR, Delco, Mead and others left town or went out of business despite millions in tax abatements handed out by the political class?  And where was the Coalition during the Great Recession when the economy nearly collapsed?  Of course they weren’t held accountable for the devastation suffered by the citizen class, but still collected their $200K + salaries funded by the taxpayers.

There’s another interesting back story related to the testimonials on the Coalition’s website. The last two were offered by former 4-star generals Michael Moseley and Les Lyles.  This not only connects the dots with the military-industrial complex, but in the case of General Moseley destroys the credibility of anyone naïve enough associate themselves with the Coalition in a positive way.  Moseley and the Secretary of the Air Force, Michael Wynne were simultaneously asked to resign because of two serious nuclear surety incidents, but even before that General Moseley was implicated for improperly  influencing  a $50 million contract awarded to Strategic Message Solutions to promote the U.S. Air Force Demonstration Squadron, the Thunderbirds. (Source: Air Force secretary takes action on DoD IG report, Official website of the USAF, 10/8/2009)  Secretary Donley commented after he issued General Moseley a letter of admonishment, “Everyone is accountable for his or her actions.  This is especially so for our senior leaders who must also create an environment where subordinates respect established standards and are willing to engage when things are not right.”  OCGJ agrees.  It’s time the DoD IG or the FBI re-open the investigation on the 2003 BRAC Initiative Agreement just as they did with Gen. Moseley’s role in the Thunderbird Airshow Production Services contract.