And
breaks the rules
By
Will Collette
On
Monday, June 1, some small portion of the Charlestown electorate will go to
Town Hall to vote on the town’s budget, which includes the 7th
consecutive CCA-driven tax hike. They will also vote on three additional ballot
questions.
Warrant
Question #1 requests voters to authorize a new $2 million bond exclusively to purchase more open space land. Warrant Question #2 asks voters to
authorize the Town Council to give away a conservation easement on the 75 acres
of land Charlestown just bought, using all of the last $2 million bond issue.
The
third item is Petition #1, which asks voters to approve $1 million in funding
for recreation at Ninigret Park. This petition was necessitated by the
exclusion of recreation from the $2 million open space request.
Historically, Charlestown voters have been asked to fund bonds for both open space and recreation in keeping with the way state bonds are issued. But now, apparently, the ruling Charlestown Citizens Alliance, which controls Charlestown government, has decided to use recreation as a political football.
Historically, Charlestown voters have been asked to fund bonds for both open space and recreation in keeping with the way state bonds are issued. But now, apparently, the ruling Charlestown Citizens Alliance, which controls Charlestown government, has decided to use recreation as a political football.
Entering
into the political fray for the first time in my memory is the private,
non-profit Charlestown Land Trust – which, by the way, is not a unit of town
government, even though they often act that way.
The
Charlestown Land Trust is a private, non-profit, tax-exempt organization
recognized by IRS as a 501(c)(3) organization. They grew out of an older organization called the South County Conservancy. They are headquartered at
the Kettle Pond Visitors Center of the Ninigret National Wildlife Refuge.
The
Charlestown Land Trust just sent a mass mailing to Charlestown households
urging voters to Vote YES on both the $2 million open space bond request and
Warrant Question #2, the giveaway of land rights to town property, the 75-acre
proposed site of the Whalerock wind farm that taxpayers paid $2.14 million to
buy.
Not coincidentally, that land is slated to be given to the Land Trust, so you might say they have some skin in the game.
Not coincidentally, that land is slated to be given to the Land Trust, so you might say they have some skin in the game.
Enough
skin that they are willing to violate campaign finance laws and possibly
jeopardize their tax-exempt status.
Even
though there are some very small loopholes in state and federal laws that
offered some ways that non-profits can get involved in electoral politics, we
always considered them to be too risky. We generally considered electoral
politics to be the third rail of organizing – touch it and die.
Under
state law, advocacy groups are allowed to get involved in some
electoral activity that does not involve campaigning for or against a specific
candidate. However, they still have to follow campaign financial disclosure laws.
Under the IRS code, 501(c)(3) organizations may not campaign for or against any
candidate, but can get involved in political activity on issues, provided it
does not consume a substantial part of their budget.
Based
on the big mass mailing (click HERE
and then click HERE
to see both sides of their mailer), the Charlestown Land Trust may have put
itself in jeopardy both with the state and with the IRS.
For
one thing, according to Richard Thornton, head of campaign finance at the Board
of Elections, the Land Trust is required to file campaign finance reports if it
spent more than $1000 to print and send the mailer.
I know from my past
experience when I was on the Charlestown Democratic Town Committee that a
mailer of that type costs around twice that to print and mail. If someone gave
them the printing for free, then that
person would probably be responsible for reporting the campaign expenditure,
and the Land Trust would still have to report, identifying the value of the
donated service. The bottom line is you can’t do what the Land Trust did
without filing the required disclosure, and they didn’t.
Mr.
Thornton called up the records while I was talking to him and he noted that the
new ad hoc Support Charlestown’s
Ninigret Park group, the one that sent every resident a mailer asking them
to support the $1 million recreation bond, obeyed the rules and duly filed its campaign finance
report. If you didn't get that mailer, click HERE and then HERE to see both sides of that postcard.
Based
on what I learned from Mr. Thornton, I filed a formal complaint with the Board of Elections
against the Charlestown Land Trust. I plan to send a request to IRS asking them
to determine whether the Charlestown Land Trust election mailer and lobbying violated the
terms of their 501(c)(3) tax status.
The Big Score
Apparently,
the Charlestown Land Trust decided that scoring the conservation easement to
the former Whalerock property was worth the risk to their non-profit status. If
they do get the easement to this $2.14 million property (estimated worth of the
easement is $1.7 million), it would be their biggest score yet.
In
fact, it would more than double the reported worth of their land portfolio. According to
the Trust’s filing with IRS, the Trust currently has assets valued at $1,356,921 of
which $1,185,654 is land. Only some of that land is directly held by the Trust;
much of the rest of it is in the form of conservation easements.
Note
that the property assets reported by the Land Trust to IRS does not line up with the
assessed value of the land as it is carried on the Charlestown tax rolls. The Trust tells IRS it holds $1.2 millon in land while the Charlestown Tax Assessor values that property at roughly $2.8 million. I'd sure like to know why there is a 133% difference.
Many
of Charlestown’s shrewd and wealthy people have used the provisions in the tax
code to give the Trust conservation easements on their property while they
continue to live on it or farm the land, allowing them to take huge federal and
state income tax deductions as well as huge decreases in their town property
taxes. That's entirely legal.
Oddly,
the Land Trust contends that conservation easements are actually worthless even
though they are a major part of their assets, not to mention the source of huge tax breaks for their donors. Indeed, the Land Trust actually
says these easements represent a liability.
Here's a screen shot from their latest Form 990 filing showing exactly what they told IRS:
That’s
probably a very impolitic thing for the Charlestown Land Trust to say because,
under the law governing non-profit corporations, the board of trustees has a
fiduciary responsibility to properly manage the non-profit’s finances.
According
to the Trust’s latest filing with IRS, the Land Trust had income of only $40,195 (half of
which was spent on the part-time salary of executive director Michael Maynard)
while running up expenses of $60,061, incurring a deficit of $19,866.
If
the Trustees intend to exercise their fiduciary responsibility, they might want
to consider shedding some of those conservation easements that they consider to
be liabilities. That's something for the pushers of Warrant Question #2 to consider - the Trust can and just might sell the easement to someone else.
Incidentally,
that low revenue reported by the Land Trust to the IRS makes it all the more
possible they may have exceeded the threshold for spending on politics.
This isn’t our
first rodeo
The
June 1 ballot measure is actually the second time in three years that the
Charlestown Land Trust has attempted to make a big score at the expense of
Charlestown taxpayers.
The
Land Trust put us all through the wringer during the 2012 “Y-Gate
Scandal.” This was the long-running scheme to use state and town money to
buy the busted-out, abandoned Westerly YMCA camp on Watchaug Pond which was
loaded with junk and had very little value except as a free extension of the
backyards of the mostly non-resident colony of Sonquipaug.
The
idea then was for the Town to put the money together to pay the Westerly Y way
more than the camp was worth (Planning Commissar and CCA leader Ruth Platner
actually called the excessive price a town “donation” to the Y) and then give
the land to the Charlestown Land Trust, for which the Land Trust would give
Charlestown one of those conservation easements that the Trust says are
less than worthless.
The
Y-Gate scam was blocked initially by the lawsuit
of Dr. Jack Donoghue and then beaten down by public protests. Secret
deals, bogus
appraisals and dishonest conduct, plus the amazing
sworn testimony of Providence resident and Charlestown Land Trust Treasurer
Russ Ricci, sparked widespread outrage.
Pay to Play - CCA's favorite kind of corruption
The
2012 Y-Gate deal involved the town using public money (town and state) to buy
the land which they would then give away to the Land Trust in return for a worthless
conservation. That was clearly an over-reach, one that I believe led to this new, somewhat re-structured deal for the Whalerock land.
This
time, we have already used town money to buy the land. But instead of giving it
away to the Land Trust in return for a conservation easement, this time the CCA
Party wants to give the conservation easement to the Trust. For nothing in
return. It’s another scam that would take publicly-owned property and turn over the control to a private corporation that, frankly, disgraced itself
and betrayed the public trust through its conduct during the Y-Gate scandal.
I
am convinced that these deals are driven by personal relationships, overlaps
between the CCA Party and the Charlestown Land Trust Board of Trustees. And
let’s not forget the kind of campaign donations that allowed the CCA Party to take and
hold control of this town since 2008 and stay in power.
The
Charlestown Land Trust has, in its heyday, done great service to Charlestown, but
not this time and not during the Y-Gate Scandal.
I suspect there is a problem
with the Trust’s leadership and its unfortunate incestuous relationship with
the CCA Party. But that is for them to address, perhaps with a prod from the
state Board of Elections and IRS.
But
on June 1, Charlestown voters should examine the facts and the documents and
decide for themselves whether they trust the Land Trust. I don’t and plan to
vote NO on Warrant Question #2.
I also plan to vote NO on Warrant Question #1
because as long as Planning Commissar Ruth Platner controls land use decisions
in Charlestown, I believe those decisions will be made based on cronyism and not
the needs of the community. Oh, and I will be voting NO to the town budget proposal because I am sick of seven years in a row of unjustified tax rate increases.