nonprofits

The U.S. Court of Appeals for the Ninth Circuit has rejected the argument of the Koch brothers' Americans for Prosperity and the Thomas More Law Society that their First Amendment rights were violated by a California law requiring them to turn over their list of donors to the California attorney general, Election Law Blog's Rick Hasen reports. The groups said they should be exempted from the law because disclosure of their donors could cause them to be harassed.

The Ninth Circuit reversed the injunction that had been put in place by the district court. The Attorney General is not disclosing the information to the public.

California charities must disclose the names of their major contributors, the U.S. Court of Appeals for the Ninth Circuit ruled last week. The Los Angeles Times' Maura Dolan reports that the Center for Competitive Politics lost the argument that its First Amendment right to the freedom of association is violated by the reporting requirement.

California Attorney General Kamala D. Harris ordered nonprofits to disclose donors who contributed more than $5,000 in a single year. The disclosures, however, were only to the attorney general's office, not to the public too.

The Association of Corporate Counsel is arguing in the Pennsylvania Supreme Court that nonprofit in-house lawyers should not be allowed to blow the whistle to the state attorney general about the misuse of funds, Corporate Counsel's Sue Reisinger reports. The Supreme Court, in a case titled Redacted v. Redacted, is going to decide if in-house counsel may disclose information about wrongly diverted funds to the attorney general's office, "'“as parens patriae for the public to whom the charity and its counsel owe a fiduciary duty.”'

The ACC argues that if clients will be less candid with their lawyers if they are afraid their lawyers will turn them in to law enforcement.
 

The Pennsylvania Supreme Court has taken up a sealed case to consider whether a lawyer for a nonprofit corporation can break her duty of confidentiality and disclose her concerns to the Attorney General's Office that charitable assets are being unlawfully diverted, The Legal Intelligencer's Lizzy McLellan reports. The anonymous petitioner said the public charity had a fiduciary duty to the public and the charity's lawyer was permitted to disclose the diversion of public charitable resources into private pockets to the attorney general.

Nonprofit practitioner Penina K. Lieber told The Legal that "'attorney-client privilege is not destroyed by the fact that you have a tax-exempt status,'" and the organization itself should approach the attorney general.

The IRS has recently released rules to address aggressive debt collection from poor patients by nonprofit hospitals, ProPublica reports. The rules, required by the Affordable Care Act, will require nonprofit hospitals to "post their financial assistance policies on their websites and offer a written, 'plain language summary' of them to patients when they're in the hospital. If patients don't apply for assistance or pay their bills, then the hospitals are required to send at least one more summary of the policy, along with mentioning it on billing statements. And if hospitals plan to sue patients over unpaid bills, they must attempt to verbally tell the patients about their policies, as well as send notices that they are planning to sue and that the patients may qualify for financial assistance."

The Washington Post's Josh Hicks reports that "an independent review released last month faulted the IRS for scant oversight of charities, saying the agency examined the groups less frequently while its budget and workforce steadily shrank in recent years." The Government Accountability Office found that the IRS audited 0.7 percent of charities in 2013, down from 0.81 percent in 2011. The GAO also said the the IRS has not developed a system to measure the outcome of its scant oversight.

ProPublica reports that the Red Cross had dropped its argument that documents about how it spent $300 million in disaster-relief funds on Superstorm Sandy contain trade secrets. The Red Cross disclosed that the largest Sandy expenditures involved financial assistance, food, other relief items, programming resources and paying for the deployment of staff and volunteers: "More than half the money spent, $129.6 million, went to financial assistance, food, and other relief items. .... The next-largest expenditures were $46.1 million for 'deployment of staff and volunteers (e.g. air travel, rental vehicles, meals, lodging for volunteers)' and $30 million for 'costs of permanent program resources included in Superstorm Sandy response.'" 

New York Attorney General Eric Schneiderman sought details on how the Red Cross spent money on Superstorm Sandy relief, and ProPublica sought the correspondence through a Freedom of Information request, ProPublica previously reported. The Red Cross initially objected to the FOIA request on trade secret grounds.

New York Attorney General Eric Schneiderman sought details on how the Red Cross spent money on Superstorm Sandy relief, ProPublica's Justin Elliott reports. There has been lack of transparency in how the charity spent $300 million raised after the storm, ProPublica reports.

Last fall, the nonprofit and the AG's office struck an agreement on the Red Cross's release of information about future disasters. But that final agreement did not address what has been going on with the Sandy money.

The correspondence was obtained through a Freedom of Information request, ProPublica said.