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Decision Virginia Archive 8/08- 7/12

Constitutional conflict endangers funding for charities

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It is not something that blogger Norman Leahy enjoyed doing, but in his mind it had to be done.  The conservative blogger at Tertium Quids had long been annoyed at the way Virginia’s government routinely provided funding for non-profits and charities, despite the practice being unconstitutional.

Leahy blogged about the problem shortly after Governor Bob McDonnell announced plans to provide $1 million dollars to two different Virginia charities.

Here is an excerpt of what he wrote:

Individual and corporate giving to charity is a perfectly fine and laudable activity and these two organizations provide essential services to their clients. However, the state is specifically barred from supporting them with taxpayer dollars. And just to refresh our memories, here’s the section of the constitution in question:

“Nor shall the General Assembly make any like appropriation to any charitable institution which is not owned or controlled by the Commonwealth; the General Assembly may, however, make appropriations to nonsectarian institutions for the reform of youthful criminals and may also authorize counties, cities, or towns to make such appropriations to any charitable institution or association.” (Va. Constitution Va. Con. Art. 4 § 16 (1971))

Leahy asked Del. John O’Bannon to seek an opinion from Attorney General Ken Cuccinelli as to the practice and it turns out Cuccinelli agreed with Leahy.

“Because that’s what the constitution says,” Leahy told me during an interview on NBC12 First at 4. ” It’s rather unambiguous about it. The state can’t give money to nonprofits it doesn’t own or control.”

Leahy’s quest has forced Governor McDonnell to step back from plans to donate $500 thousand to the Virginia Food Bank and another $500 thousand to Operation Smile.  In a statement to the Washington Post, the Governor’s office said the Governor “requests the General Assembly join him to ensure that all appropriations and pending budget amendments conform to the Constitution.”

To be fair, Governor McDonnell is not the first government official to attempt to wrangle state money for charitable projects.  Every other year the effort has been met with success, until now.  Leahy believes someone finally took the time to read the document that guides the government’s work.

“It raises an uncomfortable question is that probably because no one has really read it,” he said. “I’ve gone around with reporters, too. Has nobody read this section? It’s right there.”

In fact Leahy and Cuccinelli’s view was backed up by the man the originally crafted that section of the Virginia constitution, Dick Howard.

“He said Cuccinelli got it right. It’s right there,” said Leahy. “It’s of essentially it’s the saving the legislature from itself clause. Otherwise, everybody beats on the door, ‘we want some money’. Who in the legislature does not want to play Santa Claus?”

You can see my full interview with Norm Leahy below. A complete transcript from our conversation can be found on NBC12.com.

Written by Ryan Nobles

January 31, 2011 at 10:29 pm

2 Responses

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  1. The whole 501c(3) definition has been so abused that we now have, every imaginable business masquerading as “non-profits.”

    We need to redefine what qualifies for non-taxable status to only those organizations who directly house, feed or provide medical treatment for the poor.

    Everything else, that owns property and operates various self aggrandizing “programs” must be redefined as taxable entities, including those political organizations referred to as “churches” “synagogues” and “mosques.” They can stay separate from the state, but they must pay their share of taxes based on the property that they own or control.

    J. Tyler Ballance

    February 1, 2011 at 12:10 am

  2. I have no doubt this may adversely affect legitimate charities engaged in valuable public services. However, the Constitution says what it says.

    In addition, the fact of the matter is the doling out [or attempted doling out] of tax dollars has been used as a veritable slush fund at the expense of taxpayers by legislators to reward contributors to their political campaigns.

    Want a prime example? Look no further than VA’s most infamous frauds and White House State Dinner uninvited guests, Tareq & Michale Salahi, who nearly managed to snag $900,000.00 from the Commonwealth for their sham “charity”, Journey for the Cure Foundation.

    The VPAP database shows $18,308 to Brian Moran as an in-kind contribution by Salahi or one of his sham corporations, that is listed on Moran’s Jan. 15, 2007 SBE report as being for “Hosted Redskins game event” on December 3, 2006.

    2006 was a big year for the Salahi-Moran nexus, with $1,000 also going from Tareq to Congressman Jim Moran on May 24, 2006.

    What’s the problem with the Salahis giving money to the Morans? The problem is that that shortly after receiving the Salahi largess Brian Moran was introducing a budget amendment to give nearly $900,000.00 dollars of Commonwealth funds to the Salahi “charity”, a CHARITY WHICH HAD NEVER EVEN REGISTERED TO SOLICIT OR RECEIVE DONATIONS IN THE COMMONWEALTH. A charity which, shortly thereafter, came under investigation, and is still under investigation, by the Commonwealth. The latest financials filed [albeit tardy] show that for CY2008, that “charity” purportedly collected in excess of $19,000.00 and, after the Salahis’ meals, travel, entertainment and professional expenses, donated all of $710 to actual charitable purposes. Gee, sort of looks like a scam to me. Just my opinion.

    And, not surprisingly, the Salahis still have not filed the CY2009 financial statement for their “charity”, even though it was due last spring.

    Thankfully, the earmark Salahi charity give-away budget amendment did not pass upon final approval of the budget, but that does not excuse the gall of legislators to propose such an idiotic waste of tax dollars in the first instance.

    The Salahi polo event [which some have referred to as a “goat rodeo”] was to be held in Leesburg, so one must pose the question why Moran would push this for an event nowhere near his home district. Could it be the campaign contributions, or is that merely an amazing coincidence?

    While Moran was the prime sponsor for Salahi in the House, even though it was well beyond his district, Mark Herring was the prime sponsor in the Senate for the proposed give-away. Tareq Salahi was shown by VPAP to have given a gift to him, that being a gift of $150 for tickets to the Salahi goat rodeo.

    Other Virginia politicians:

    Dave Marsden received an in-kind donation of $864 from Salahi’s Oasis Vineyards in 2005 for “wine for kick-off event”.

    Former governor Tim Kaine reported a payment of $25,000 by the Kaine campaign to Tareq Salahi on January 13, 2006 as a vendor for “Event beverages”, presumably for his inauguration. $25K in beverages? But it gets even more curious. Mr. Salahi personally gets paid $25,000 as a vendor for Oasis wine on January 13, 2006, then Oasis Vineyard, Inc. makes a cash contribution for the exact same $25,000 on January 16, 2006. A rather curious transaction, don’t you think?

    In 2005 Oasis Vineyard received $15,500 from Kaine for Governor as a vendor. Oasis Vineyard also contributed another $23,176 to Kaine for Governor, dating back to 2002, and it also was reported then-Gov. Kaine received a gift of a $300 bottle of “O Rose 1988 Grand Reserve” on February 18, 2006.

    Regardless of the Constitutional questions, it is obvious to this writer that the practice of doling out tax $$ to preferred “charities” was ripe for corruption and political back-slapping. If it was tried once, even if [thankfully] unsuccessful, any reasonable person would conclude it has happened over and over and over again in the past. This is not what tax dollars are collected for.

    My opinions.

    WM. J. ROBERTS

    February 4, 2011 at 11:40 am


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