LOS ANGELES (AP) — California is suing a nonprofit that sends care packages to combat troops, accusing it of misleading donors about its affiliations, engaging in political activity and paying fees to its directors' for-profit companies.
The lawsuit alleges the charity Move America Forward invaded the privacy of injured veterans by using their names and stories to solicit donations without their permission and falsely claimed to have a partnership with the Walter Reed National Military Medical Center.
"Our troops and their commitment to our country should never be exploited in deceitful solicitation gimmicks, but unfortunately they are," state Attorney General Xavier Becerra said Wednesday.
The lawsuit alleges the charity violated IRS rules by providing free office space for the political action committees Move America Forward PAC and Tea Party Express.
The charity also is accused of using charitable donations to endorse the political campaigns of former Republican U.S. Rep. Michael Grimm, who ran unsuccessfully for Congress in New York last year after pleading guilty to tax evasion, and Josh Mandel who briefly ran for the Republican nomination for a U.S. Senate seat in Ohio.
Becerra said federal rules ban charities from backing political candidates.
Move America Forward said the organization has always been completely transparent and provides proof of tax filings and independent audits on its website.
"Shame on Attorney General Becerra for his unrelenting harassment," Melanie Morgan, chairwoman and co-founder of Move America Forward, said in a statement. "We look forward to our day in court for all the facts to come to light and for our opportunity clear our name so that we can continue with our business of supporting our brave men and women of the military."
Becerra said charity directors Salvatore Russo and Shawn Callahan also operated several separate for-profit entities that charged fees for marketing and other services provided to Move America Forward.
For example, a Russo-owned entity called The Campaign Store LLC intercepted online donations and charged fees ranging from 7.55% to 10.06% to transfer the remaining funds to the charity's bank account without adding any value to the transaction, the lawsuit says, calling it a vehicle to "skim" off a percentage of donations.
The attorney general said the lawsuit seeks to remove Russo and Callahan as directors and ban them from operating charities in California. Becerra said his office will pursue further penalties but that they wouldn't be criminal because it would be hard to prove intent.
Senior Assistant Attorney General Tania Ibanez highlighted the number of military or veterans charities that are operating as unregistered or delinquent, meaning they failed to supply their annual reports to the state.
An investigation from June 2018 to June 2019 revealed that over 1,000 charities in California have names relating to the military and 554 were found to be delinquent, Ibanez said. Only half have fixed the problem. The office sent cease-and-desist orders to 498 charities that have not registered with the state.
Ibanez said veterans are the group most likely to be exploited, followed by firefighters and police officers.
Read the full statement below:
Attorney General Xavier Becerra has filed suit against one of America’s major and most successful pro-troop charities in keeping with the disgraceful effort of far-left politicians to attack every conservative they can.
The attacks on Move America Forward began when we criticized Illinois Senator Dick Durbin for comparing US troops in Iraq to Nazi concentration camp and Soviet gulag guards, an outrageous statement. Instead of just apologizing, Senator Durbin, joined by several other Democrats, wrote a letter to the IRS demanding a tax audit. MAF was then subject to two IRS audits, which we passed with flying colors.
But the assault on Move America Forward and its founders has continued in the left-wing press, whose articles spurred on the investigation by left-wing Attorney General Becerra. AG Becerra then implied that this is a recent action cracking down on military charities, but the truth is that this harassment had been going on for five years. Despite pointing out, item by item, the inaccuracies in the reports, MAF has been subject to almost 5 years of harassment in the guise of investigations and discovery, wasting our time and resources. All of the accusations have been TOTALLY FALSE and misrepresent the truth.
Now, the AG is resorted to a politically motivated and highly negative public relations campaign to demean and destroy an organization that has sent over 450 tons of care packages to the troops in harm’s way throughout the world and into the war zones of Iraq and Afghanistan. We have invited the AG to come to our office and review all of the relevant documents, much like the IRS did to give us a clean bill of health, but they have refused.
Founded in 2004, Move America Forward is an IRS approved 501(c)(3) non-profit organization that has regularly received the highest charity ratings from the leading charity rating organizations. Recognized for having exemplary business practices, transparency, and serving the military community with distinction. Move America Forward spends 91% of contributions to directly support the troops. Anything over 80% is considered excellent!
We have received the Top Nonprofit Award six years in a row from Great Nonprofits, are platinum rated by Guidestar and are certified with “Our Promise: California State Employees Giving at Work” and United Way among others based on our work and ratings and that remain committed to supporting our military families and deployed troops.
We have always been completely transparent and our 990 tax returns along with an independent certified audit of them are posted on our website for anyone to review.
Shame on Attorney General Becerra for his unrelenting harassment. We look forward to our day in court for all the facts to come to light and for our opportunity clear our name so that we can continue with our business of supporting our brave men and women of the military.