Tag Archive: Hurricane Sandy New Jersey Relief Fund

Is Anyone Surprised About the Christie Fund?

If you Google “Hurricane Sandy New Jersey Relief Fund,” the first entry is the fund itself, the second entry is a direct link to the fund’s donation page, and the third entry is “NJ Sandy Transparency.” The fund overseen by Mary Pat Christie and promoted by her husband continues to seek donations. However the third entry which refers to Sandy efforts in general is replete with irony. We have learned from investigations, Fair Share Housing, Sandy victims, and others about how little Sandy transparency our governor offers. Christie recently even had the gall to conditionally veto (with 150 changes) Senate President Steve Sweney’s “Sandy Bill of Rights” which strengthens transparency.  

Therefore it will probably come as no surprise that 18 months after the Super-Storm, Hurricane Sandy New Jersey Relief Fund has yet to file, as required by law, any actual income or expenses with the Charities Division of the NJ Attorney General’s office. Its initial, and only, filing of 12/31/2012 indicates zero income and zero expenses. (You can access the report here by entering the fund’s full name or Registration Number: CH3558500). The fund is in violation of reporting regulations. The State earlier granted an extension for Sandy-related funds. However, a phone call with the Charities Registration HOTLINE (973 504-6215) confirms the Christie fund is delinquent.

Respected non-profit groups which solicit contributions seek to keep their donors updated with audited financial reports and with timely disclosure to regulatory agencies. The Christie fund does not.  

Hurricane Sandy NJ Relief Fund: Politically-Connected, Delayed and Non-transparent

This fund was started by Governor Christie whose name early on successfully garnered large donations from politically connected donors, including Hess and AT&T. Direction of the fund, rather than being turned over to a non-profit professional, was entrusted to his wife Mary Pat Christie, as Board Chair. She appointed as her first board member Gov. Christie’s political confidante Bill Palatucci. Sloppiness was apparent from the beginning as the fund claimed it was a 501 (c) (3) tax-exempt organization before it had even applied.

HSNJRF was slow in hiring staff. It has been even slower in dispersing funds. New Jerseyans have been desperately in need of relief assistance. However, as of July 8, according to a Star-Ledger interview with Mrs. Christie, HSNJRF had issued awards of only $11 million of its then total funds of $38 million.

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As of today, a year after its inception, HSNJRF has filed no financial reports with either the NJ Charitable Division (file registration #: CH3558500) nor the IRS (E.I.N. #: 36-4745729). There is zero reporting on its fundraising take, its grant awards, and its operating expenditures. While, the State, for example,  extended the financial reporting date of Sandy-related groups to February, 2014, there is nothing stopping HSNJRF from periodically issuing such data. Indeed, other groups have done so. HSNJRF has relentlessly been non-transparent about the $38 million Mrs. Christie says it raised. Only in rare news interviews has she casually mentioned the amount in the fund.

Then on October 22 in a CBS interview she said they had raised $38 million. Surprisingly this is the exact same figure she quoted back in the July interview above, which suggests no money was raised since then, or she not up to date on receipts, or there is some confusion. In the interview she indicates she continues to solicit additional funds. She further says, “$25 million has been allocated to non-profit organizations.” The word “allocated”  is not the same as disbursed (or actually paying out the amount) so it’s hard to know how much has been disbursed. The issue is made more confusing because her website today indicates that as of September 18, there has only been “Total Grant Awards of  $16,295,600.” Furthermore, HSNJRF sends its funds to agencies which in turn disburses monies to individuals and groups. What has actually been received by individuals a year after Sandy is anyone’s guess.  

HSNJRF’s website stated back in July and still today: “Final grant award announcements are expected on Thursday, October 31st.” These announcements are conveniently scheduled to be issued just before the November 5 General Election, which only provides further help to the Governor. Unfortunately, help desperately needed by NJ residents has been slow in coming, politically connected, and remarkably devoid of transparency. We probably will not learn about the inner financial details of HSNJRF until after February at which time the election will be over. Good for him, not so good for Sandy victims nor the general public concerned about management of non-profits.  

Christie’s Disaster Fund Looks like a Disaster

In the wake of instantly launching on November 3 the Hurricane Sandy New Jersey Relief Fund (HSNJRF), Governor Christie and his wife, who serves as Chair of the fund, appear to be on shaky legal ground and to have created a foundation which is not advisable, which is rife with potential conflicts of interest, and which need not provide much transparency.

Legal Status

The legal status of this organization remains in question regarding both State and Federal law. The NJ Charitable Section of the Attorney-General’s office says it is not a registered charity. The IRS has announced an expedited review and approval process for organizations seeking 501 (c) (3) tax-exempt status to provide relief for victims of Hurricane Sandy. The process, nonetheless, requires time for document review and does not guarantee tax-exempt status. The application Form 1023 asks numerous questions regarding different types of conflicts of interest and political activity. An e-mail response from Christie’s relief fund [info@sandynjrelieffund.org] says it is “a registered 501(c) (3) organization,” but does not mention whether it has been granted tax exempt status – important for donors. In fact the IRS database for exempt organizations does not include HSNJRF nor the Employee I. D. number 36-4745729, which HSNJRF is using.

Is the existence of this new fund advisable?

The IRS reminds people, “Existing charitable organizations are frequently able to administer relief programs more efficiently than newly formed organizations, since they tend to already have fund-raising and distribution infrastructures in place.” It would seem vainglorious of Christie and his wife to create a new fund when so many other established, experienced non-profits are already delivering services. How can his fund dispense monies better and promptly without experience in the mechanics of establishing needs, who and how much to fund, monitoring the grantees’ performance, determining outcomes, avoiding waste, fraud, and abuse, and complying with extensive legal, regulatory, and accounting requirements?

All too many disaster relief funds have been highly successful at raising money only later to be revealed as incompetent, negligent, self-serving, and even fraudulent. Christie’s own fund is already off to a rocky start by claiming legal status it may not yet have and implying it can accept tax-exempt donations when it appears to lack such authority.

Conflicts of interest

The conflicts are many and the separation between the fund, the Christies, and state government are murky. AT&T and Hess Corp which regularly lobby the State have already made large contributions. The fact that companies may well contribute to this fund to curry favor with the governor and that those who receive monies from the fund may feel indebted to the governor is discussed in more detail here. A 501 (c) (3) organization is not  designed nor allowed to be a political instrument. Announcement of the fund’s launch was made via a release from the governor’s press office, in effect opening the gateway for large corporate donations and enhancing in the mind of the public the image of a concerned, caring, activist governor who also may well run for re-election. The facebook page has a video promoting donations to the fund and paid for by Comcast and Cable Vision which lobby for favorable regulations. People in need are urged to call a state hotline number.

In the email response mentioned above the foundation says “100% of the money donated to the Relief Fund will go towards relief.” Does that mean Christie will pay himself all operating costs or the State will pay the operating costs? An organization which already has $8 million pledged or received like HSNJRF, will have substantial expenses to conduct its business and would typically use a per cent of donations to cover the costs. The conflicts of interest and the lack of separation and independence from political activity seem murky at best and could result in the foundation being unable to claim non-profit status as well as result in unneeded controversy, lawsuits, and even prosecutorial investigation.

Go below the fold for information about the lack of transparency  

Christie’s Hurricane Relief Fund: A Scheme Gone Awry

Governor Christie has promoted Hurricane Sandy New Jersey Relief Fund (HSNJRF), as an organization soliciting donations. It’s website says “HSNJRF is a charitable non-profit organization.” However, it is not registered nor authorized by the IRS nor the NJ Attorney General’s Office of Consumer Affairs as a charitable non-profit organization. Furthermore, its receipts and expenditures are subject to conflicts of interest and could be viewed by the IRS as political activity which is not allowable for a tax exempt charitable organization.

A telephone call this afternoon to the NJ Charity Registration Section –  (973) 504 6215 – reveals that this fundraising group is not registered with the Consumer Affairs Division. A NJ organization is in contravention of the law when it has raised $10,000 or more without registering. Neither does the IRS website data base for exempt organizations have a record for this fund. Without a 501 (c) (3) or other similar exempt status, this organizations is not eligible to receive tax-deductible contributions.

Thus an organization that may have been born out of a desire to do good has already gone awry. Its website solicits contributions, but does not mention any NJ Charitable Registration number, any IRS tax status, board members, treasurer, or statement regarding what organizations it will fund. Because of its statement that it is a “charitable non-profit organization,” people may believe their donations are tax-deductible and the organization is authorized, but such is not the case. It is inadvisable to contribute to such a group until and unless it is in full compliance with the law. Indeed the group may never receive tax exempt status because of the many potential conflicts of interest and the possibility it may be viewed by the IRS as engaged in political activity which is prohibited to tax exempt organizations.

Virtually any contribution to the fund could be viewed as currying favor from the governor. Virtually any expense the fund makes could be viewed as the Governor currying favor from the recipient. Another Blue Jersey diarist elaborates on what makes this look hinky:

  •  Using a natural disaster to make the Governor and his wife look good to suffering constituents.

  •  Allowing people to make unlimited contributions to the Governor outside the normal reporting structure (ELEC).

  •  Allowing the Governor, through the charity, to make monetary gifts to people and organizations that could be politically beneficial to him in the future.

  •  Not being properly registered while accepting contributions in excess of legal norms.

    According to an article in today’s NorthJersey.com this fund has now raised over $8 million from groups including AT&T and Hess Corp. Both companies have substantial financial stakes in State policies, legislation, and regulations. Christie could have urged individuals and corporations to contribute to the Salvation Army, the Red Cross and similar groups. Instead, on the website we have a message from Mary Pat Christie, a post office box in his home town, an organization not recognized by the IRS nor his own Attorney General’s office, and a fund mired in a web of potential conflicts of interest.