The Southern Poverty Law Center (SPLC), a liberal, Alabama-based
501(c)(3) tax-exempt charitable organization that has gained prominence on the
left for its "hate group" designations, pushes millions of dollars to
offshore entities as part of its business dealings, records show.
Additionally, the nonprofit
pays lucrative six-figure salaries to its top directors and key employees while
spending little on legal services despite its stated intent of "fighting
hate and bigotry" using litigation, education, and other forms of
advocacy.
The
Southern Poverty Law Center is perhaps best known for its "hate map," a collection of
organizations the nonprofit deems "domestic hate groups" that lists
mainstream conservative organizations alongside racist groups such as the Ku
Klux Klan and is often referenced in the media. A gunman opened fire at the Washington,
D.C., offices of the conservative Family Research Council in 2012 after seeing it listed as
an "anti-gay" group on SPLC's website.
The
SPLC has turned into a fundraising powerhouse, recording more than $50 million
in contributions and $328 million in net assets on its 2015 Form 990, the most
recently available tax form from the nonprofit. SPLC's Form 990-T, its business
income tax return, from the same year shows that they have "financial
interests" in the Cayman Islands, British Virgin Islands, and Bermuda. No
information is available beyond the acknowledgment of the interests at the
bottom of the form.
However,
the Washington Free
Beacon discovered forms from 2014
that shed light on some of the Southern Poverty Law Center's transfers to
foreign entities.
The
SPLC's Form 8865, a Return of U.S.
Persons With Respect to Certain Foreign Partnerships, from 2014 shows that the
nonprofit transferred hundreds of thousands to an account located in the Cayman
Islands.
SPLC
lists Tiger Global Management LLC, a New York-based private equity financial
firm, as an agent on its form. The form shows a foreign
partnership between the SPLC and Tiger Global Private Investment Partners IX,
L.P., a pooled investment fund
in the Cayman Islands. SPLC transferred $960,000 in cash on Nov. 24, 2014 to
Tiger Global Private Investment Partners IX, L.P, its records show.
The
SPLC's Form 926, a Return by a U.S.
Transferor of Property to a Foreign Corporation, from 2014 shows additional
cash transactions that the nonprofit had sent to offshore funds.
The
SPLC reported a $102,007
cash transfer on Dec. 24, 2014 to BPV-III Cayman X Limited, a foreign entity
located in the Cayman Islands. The group then sent $157,574 in cash to BPV-III
Cayman XI Limited on Dec. 31, 2014, an entity that lists the same PO Box
address in Grand Cayman as the previous transfer.
The nonprofit pushed millions
more into offshore funds at the beginning of 2015.
On
March 1, 2015, SPLC sent $2,200,000 to
an entity incorporated in Canana Bay, Cayman Islands, according to
Securities and Exchange Commission (SEC) records and run by
a firm firm based in Greenwich, Ct. Another $2,200,000 cash transfer
was made on the same
day to another fund whose business is located at the same address as the
previous fund in the Cayman Islands, according to SEC records.
No information is contained on
its interests in Bermuda on the 2014 forms. SPLC's financial stakes in the
British Virgin Islands were not acknowledged until its 2015 tax form.
Lucinda Chappelle, a principal
at Jackson Thornton, the public accounting firm in Montgomery, Ala., that
prepared the SPLC's tax forms, said she does not discuss client matters and
hung up the phone when the Free
Beacon contacted her in an attempt to get the most updated
forms from the group in relation to its foreign business dealings.
Tax experts expressed confusion
when being told of the transfer.
"I've never known a
US-based nonprofit dealing in human rights or social services to have any
foreign bank accounts," said Amy Sterling Casil, CEO of Pacific Human
Capital, a California-based nonprofit consulting firm. "My impression
based on prior interactions is that they have a small, modestly paid staff, and
were regarded by most in the industry as frugal and reliable. I am stunned to
learn of transfers of millions to offshore bank accounts. It is a huge red flag
and would have been completely unacceptable to any wealthy, responsible,
experienced board member who was committed to a charitable mission who I ever
worked with."
"It is unethical for any
US-based charity to invest large sums of money overseas," said Casil.
"I know of no legitimate reason for any US-based nonprofit to put money in
overseas, unregulated bank accounts."
"It
seems extremely unusual for a ‘501(c)(3)' concentrating upon reducing poverty
in the American South to have multiple bank accounts in tax haven
nations," Charles Ortel, a former Wall Street analyst and financial
advisor who helped uncover a
2009 financial scandal at General Electric, told the Free Beacon.
The nonprofit also pays
lucrative salaries to its top leadership.
Richard
Cohen, president and chief executive officer of the SPLC, was given $346,218 in
base compensation in 2015, its tax forms show.
Cohen received $20,000 more in other reportable compensation and non-taxable
benefits. Morris Dees, SPLC's chief trial counsel, received a salary of
$329,560 with $42,000 in additional reportable compensation and non-taxable
benefits.
The minimum amount paid to an
officer, director, trustee, or key employee in 2015 was $140,000 in base
salary, not including other compensation. The group spent $20 million on
salaries throughout the year.
The
SPLC, which claims to boast a
staff of 75 lawyers who practice in the area of children's rights, economic
justice, immigrant justice, LGBT rights, and criminal justice reform, reported spending
only $61,000 on legal services in 2015.
Following recent violence in
Charlottesville, Va., the group raised a great deal of money.
Apple
CEO Tim Cook told his employees
that the company is donating $1 million to the SPLC and would match employee
contributions two to one. Cook also placed an SPLC
donation button in its iTunes store. The company is additionally providing a $1
million donation to the Anti-Defamation League.
J.P
Morgan Chase vowed to add a
$500,000 donation for the group's "work in tracking, exposing, and
fighting hate groups and other extremist organizations."
The Washington Times reported that CNN
ran a wire story following the Charlottesville events originally titled,
"Here are all the active hate groups where you live" using SPLC's
list of 917 groups.
Brad Dacus, the president of
the Pacific Justice Institute, a Sacramento-based group that defends
"religious freedom, parental rights, and other civil liberties without
charge," was listed on the "hate groups" list.
"Why
is the Southern Poverty Law Center doing this? It's simple. They want to vilify
and isolate anyone that doesn't agree with their very extremist leftist policy
and ideology," Dacus told the Times. "This isn't
about defending civil rights; this is about attacking civil rights."
"I
am shocked that CNN would publish such a false report on the heels of the
Charlottesville tragedy," added Mat Staver,
the founder of Liberty Counsel, a Christian nonprofit that provides pro bono
assistance and representation, which is also featured on SPLC's list. "To
lump peaceful Christian organizations, which condemn violence and racism, in
with the KKK, neo-Nazis, and white supremacists is offensive. This is the
epitome of fake news and is why people no longer trust the media."
CNN later changed its headline
to, "The Southern Poverty Law Center's list of hate groups."
"The SPLC is an
anti-conservative, anti-Christian hate group that the media have given pretend
legitimacy to. One glance at their 990 tax forms is a reminder just what a
fund-raising super-power it is," Dan Gainor, vice president of Business
and Culture at the Media Research Center, told the Free Beacon. "Its
assets are over $328 million in 2015 and went up $13 million in just one year.
It doesn't need new liberal money. It could operate for at least six years and
never raise a penny. It's like a perpetual motion machine for
fundraisers."
The
SPLC has also been hit with
a number of lawsuits over "hate" defamation claims in recent days.
The Southern Poverty Law Center
did not return a request for comment on its foreign financial dealings by press
time.