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Violation may risk DC Agendaís status

(Published Nov. 6, 2000)


Staff Writer

DC Agenda, a well-known organization involved in a wide variety of community affairs, may have jeopardized its tax-exempt status when it violated D.C. campaign finance laws by accepting contributions to support passage of a referendum that changed how the cityís school board is structured.

An Internal Revenue Service spokesman said he could not comment directly about an organizationís status, but said charitable organizations, such as DC Agenda, are expected to comply with all local and federal laws as well as restrict their activities to their stated purpose in order to maintain their tax-exempt status.

"Itís a gray area that we would have to look into," said Sam Serio, a spokesman in the IRSís Baltimore Field Office, which oversees the Washington region.

Following an investigation, the D.C. Office of Campaign Finance (OCF) fined the nonprofit organization $420 on Nov. 2 Ė the maximum fine allowed under the law Ė and ordered DC Agenda to file a statement of organization as a political committee and a report of receipts and expenditures by Nov. 3. DC Agenda officials, who said they returned the $83,300 in campaign contributions after community activist Dorothy Brizille filed a complaint with OCF that exposed the fundís existence, immediately complied with the order and said they would not appeal the decision.

Originally founded as a project of the powerful and secretive Federal City Council business group, DC Agenda Support Corp. applied to the IRS for status as a publicly supported charitable foundation in 1996. Such status allows contributors to DC Agenda to receive a federal tax deduction for their donations.

The IRS gave DC Agenda preliminary status as a Section 501(c)(3) charitable organization in January 1997, allowing it to function in that capacity. However, a final determination on the organizationís status is not due to be made until after DC Agendaís current fiscal year ends at the end of next month.

In its ruling, the Office of Campaign Finance acknowledged that DC Agenda officials sought guidance from OCF General Counsel Kathy S. Williams regarding the need to file as a political committee in order to expend funds in support of the school governance charter amendment that D.C. voters narrowly approved in a special election on June 27.

Williams said she initially told DC Agenda officials they were not required to file because she thought they intended to use a portion of the organizationís existing funds for the effort, rather than accepting contributions specifically designated for the campaign. Williams said DC Agenda "failed to indicate that it had collected and retained contributions singularly dedicated, and understood by the donors thereof to be solely committed, to favorable passage of" the amendment to the cityís home rule charter.

"The violation is not a major one, so the fine is probably appropriate, but the intended violation is bigger Ė they didnít intend to file at all," said Gary Imhoff, Brizilleís husband who made telephone calls in June to inquire about the existence of such a fund after he was told Mayor Anthony A. Williams allegedly held a meeting at which the use of a nonprofit organization to help finance the pro-referendum campaign was discussed.

Imhoff said he called the office of Terence Golden, then-president and chief executive officer of Host Marriott Corp. and a member of the D.C. financial control boardís Education Advisory Committee, after being told that Goldenís name had come up in connection with the campaign fund at the mayorís alleged meeting. Imhoff said someone at Goldenís office directed him to make checks payable to "DC Agenda" with a notation that the money was intended for the "Campaign for New School Leadership." Imhoff said he was told to send contributions to DC Agendaís 15th Street NW office.

Golden, now retired from Marriott, also has long been a member of the Federal City Council and is shown in documents DC Agenda filed with OCF to have contributed $25,000 to the campaign fund. Host Marriott contributed an additional $10,000.

Among other contributions to DC Agendaís campaign fund in support of the school board referendum were $10,000 from the George Ferris Foundation; $5,000 each from the Eric and Marianne Billings Foundation, Joseph Horning Jr., John B. Mason, Howard P. Milstein, NVR Inc. and William L. Walton; $2,500 from The Bernstein Companies; $2,000 from John W. Hechinger; $1,000 from the John Akridge Companies; a total of $2,500 in five separate $500 checks from companies associated with Hospitality Partners, a hotel management firm that manages several Marriott properties; $100 each from Anthony Clark and former DC Agenda president James O. Gibson; and $50 each from DC Agenda President and CEO John McKoy and from DC Agenda Vice President Carrie Thornhill.

Copyright © 2001 The Common Denominator