September 27, 2009 in Opinion

Don’t be charitable with crimes

By The Spokesman-Review
 

If a criminal busted into a charity and grabbed tens of thousands of dollars, she’d probably see some jail time. But if she quietly pilfered as an employee, she’d be less apt to land behind bars.

Now, which scenario is more devastating to the nonprofit agency formed to perform good deeds? It’s certainly the latter, because an inside job damages the charity’s reputation, which is the coin of the realm when it comes to fundraising. Most of the tough-on-crime talk is directed at perpetrators who hang out on the lower rungs of the socioeconomic ladder, so it’s hardly a revelation that we treat white collar crimes more gingerly.

This seems especially true when a nonprofit agency is victimized. For starters, you have victims who are more compassionate, which is what led them to charitable work. You also have victims who can be motivated to keep crimes out of the headlines for fear of hurting fundraising.

Both reactions are understandable, but then how do we appropriately punish insiders who commit crimes? In 2005, the Association of Certified Fraud Examiners estimated $41 billion in fraud at nonprofits nationwide. Jack B. Siegel, a charity consultant, says society needs to get tougher.

“For some reason, people, including regulators, seem to view theft from nonprofits differently than thefts from businesses and individuals,” Siegel wrote on his blog at charitygovernance.com. “That can be the only explanation why we continue to see these sort of plea bargains and sentencing decisions. What message does it send to those inside nonprofits who may be tempted by poor internal controls and lax board oversight?”

At the time, he was commenting on a 2007 case in New York City where two officials ripped off $1.2 million from a Boys & Girls Club. Both men avoided jail. The former executive director was ordered to pay a $5,000 fine and $38,575 in restitution. The former deputy executive director had to pay $32,363 and a $5,000 fine. That’s 7.5 cents for every dollar that was lost.

So we shouldn’t be surprised that the two women who stole money from Mid-City Concerns’ Meals on Wheels didn’t get a jail sentence or even probation. The charity lost $81,000 because of spending on personal shopping sprees and a vacation. Cheri Mataya-Muncton, the former director of the charity, was fined $10,000. Rachelle D. Solomon, a former employee, was ordered to pay $5,000. She has worked out a $50-a-month payment plan. That’s less than my cable bill.

What can’t be totaled is the hit the charity might have taken in fundraising. Furthermore, many charity officials believe that all nonprofits suffer when an inside job hits the headlines.

It’s not my goal to harm nonprofits or fundraising. Mid-City has taken strong steps to tighten controls and it did the right thing in reporting the crime. But it’s time punishment began reflecting the true damage caused by these crimes.

Czar talk. In case you hadn’t heard, it’s quite a big deal that President Obama has named so many czars – and, say, isn’t that a Russian term? As U.S. Sen. Kay Bailey Hutchison, R-Texas, wrote in a column for the Washington Post:

“Under the Obama administration, we have an unprecedented 32 czar posts (a few of which it has yet to fill), including a ‘car czar,’ a ‘pay czar’ and an ‘information czar.’ ”

The complaint is that these are unaccountable people who aren’t subject to congressional vetting. Well, factcheck.org looked under the hood and found that:

1. The term “czar” is more of a media creation, because the real titles are cumbersome. There’ve always been special envoys and advisers who aren’t approved by Congress. Nonetheless, many of Obama’s czars were confirmed.

2. George W. Bush had even more czars, but there were no complaints from people who are suddenly mortified. He lives in Texas, so Hutchison could easily track him to make sure he isn’t a closet commie.

Smart Bombs is written by Associate Editor Gary Crooks and appears Wednesdays and Sundays on the Opinion page. Crooks can be reached at garyc@spokesman.com or at (509) 459-5026.


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