SADOW: There’s Even More To Yvonne Dorsey-Colomb’s Fraudulent NGO

In the wake of Treasurer John Kennedy’s announcement that his office would demand compliance about reporting requirements for nongovernmental organizations that receive state money, the one of the three dozen cited that has received the most attention as it is connected to a state senator he may have trouble in getting accurate information from it any time soon – because it appears that group for nearly a decade has been in violation of Internal Revenue Service rules and misrepresenting itself to the public while existing only to spent nearly $1 million taxpayer dollars.

While state Sen. Yvonne Dorsey-Colomb frets that The Colomb Foundation, founded by her husband, surely should not be on this list, blaming a lack of documentation provided – that was first requested 18 months prior – on “office moves,” in fact the organization has a history of failure to provide proper legal documentation regarding what it holds itself out to be. According to its corporate filing with the state, it began in 2004, predating her marriage to him, and currently is in good standing with the state.

But the problem is, if we take it at its word, it never has been in good standing with the Internal Revenue Service. The group solicits donations and on its website at the appropriate page states, “We are a 501(c)(3) non-profit, meaning that your contribution of time or money will be tax deductible.” In order to achieve this, a group must secure from the IRS a letter of determination, and then to stay in good standing must follow a regular schedule of reporting.

Yet according to Guidestar, a nonprofit organization that tracks nonprofits with particular attention paid to section 501(c)(3) charitable organizations with its collection of these groups’ various kinds of Form 990 submitted to the IRS, not once in its history has it done so. This reporting is not optional. Unless the organization files in a consolidated fashion as a subsidiary of a larger one, regulations dictate that it must file this statement that covers income, expenditures, assets, liabilities, officer and organization information, and donor statistics and information about large donors. Smaller groups in terms of resources may have to report only the most basic names and numbers.

Guidestar also has access to whether a letter of determination has been issued and its date. It also does not report any of this information for the Foundation. That does not necessarily mean that no letter of determination once had been issued to it. IRS regulations state that a group must have this available for public inspection, and this may be available upon request from it, while Guidestar may not have picked up on it if the group never filled out some kind of Form 990 at any time.

It is possible that Guidestar, which gets from the IRS every single 990 submission, somehow missed getting a form from this group, or that the IRS somehow neglected to include a form from it. But this happening nine years in a row seems beyond chance, and IRS records indicate as such.

That’s because failure to file for three consecutive years means revocation of any charitable status. As IRS records show, on May 15, 2010 the Foundation had it tax exempt status revoked for this very reason. This means that any individual donor to the group who claimed a tax write off beyond the standard deduction, or any corporate donor using donated funds to it as a tax shield, did not do so legally. Of course, without having filed a Form 990 of some kind, there’s no way of knowing about specific donations.

But information about donations in the aggregate can be deduced, for the Foundation did, even if belatedly almost every year, file reports with the Louisiana Legislative Auditor because it was receiving money in line item appropriations from the state. In these it lists for fiscal year2005 it received $60,000; in 2006 $2,107; in 2007 $100,000; in 2008$300,000; in 2009 $137,389 (with all but $1 spent on capital outlay for a building); in 2010 $117,511 (all spent plus the previous dollar asset on capital outlay for the building); and in 2011 $361,588. The Foundation is late again in violation of statute by not having a FY 2012 report yet submitted. In the last year, money for operating expenses ($86,514) came from a line item while the remainder came from the Treasury and Baton Rouge. And in all of these, it asserted that 100 percent of its funding directly or (as in FY 2011) indirectly came from the State of Louisiana.

So this perhaps explains why the group seems to have felt it never had to file IRS reports: it never seriously worked as a charity and existed only to siphon off money from the state. Yet the group still publicly holds itself out as a legal tax-deductible charity, which it cannot legally do, even as it never had accepted apparently a single donation. It also continues to assert its charitable status in the latest documents filed with the LLA. Note also that its neglect to file IRS reports from 2004-09 leaves it open to a fine of $30,000 for the IRS, but its LLA statements, which show is has spent every cent ever received, do not show a fine payment nor the possibility of a fine as a contingent liability.

It seems the least of the Colomb Foundation’s problems is getting a report to Kennedy, considering its failure to follow federal rules in the past and the misrepresentations it continues to make today. Taxpayers should question seriously the wisdom of the $978,595 it claims to have received and spent, with over a third plowed into a building and the vast majority of the rest going to “salaries” and “other charges,” and legislators should question whether this was worth it when that amount of money over the period would have paid for five New Opportunities Waiver slots for the developmentally disabled.

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