Archive for February, 2017

SPLC — The “Anti-Muslim” Scam

February 22, 2017

The Southern Poverty Law Center released its latest “Hate Map” fundraising tool a couple of weeks ago and its “Senior Fellow” Mark Potok has been making the usual media rounds and making the usual empty claims.

The “Hate Map” is a highly lucrative fundraising tool that claims to track the number of SPLC-designated (there is no legal definition for the term) “hate groups” in the country for the previous year. As such, the most recent 2017 map refers to the U.S. in 2016.

Here are some of the highlights from the latest map, according to Mr. Potok:

197-percent-hate-map-_-southern-poverty-law-center

We’ll be breaking down some of the other “hate group” claims in future posts, but let’s have a closer look at the big news for 2017:

“Anti-Muslim Groups have exploded by 197%!!”

Ah, Mr. Potok does love his percent sign. It makes the most mundane figures pop with alarm and that brings in the donor dollars. Mr. Potok has been breathlessly announcing that anti-Muslim groups have “nearly tripled” in the past year, by growing from 34 alleged groups to 101, but shies away from the actual details in his media interviews.

We’re not shy at Watching the Watchdogs. We’ll be happy to flip the flat rock and see what scurries away.

The vast majority of Mr. Potok’s alleged explosion, (69% in Potokian terms) comes from one single source. In 2015, Potok added one single instance of something called “ACT for America,”from Virginia Beach, Va., to his Hate Map.

For 2016, Potok counted ACT 45 times! A Potokian increase of 4,400%!!

The group itself has been around since 2007, though Potok only discovered it in 2015. Even more amazing is that the ACT website boasts of more than 1,000 chapters nationwide. That’s a huge discrepancy that Mr. Potok seems eager to avoid.

Another ten groups arrived for the first time in 2016 in the form of “The Soldiers of Odin,” an apparent American offshoot of a Finnish anti-Muslim outfit founded in 2015. Of the ten chapters claimed by Potok he can only put a known city or town to two. The other 80% is part of the 191 “groups” Mr. Potok cannot locate on any map, including his own. Instead, he papers them over with a catch-all label of “statewide.”

We know all 191 of those groups are really, really out there because Mark Potok tells us so.

Most of the remaining “groups” are a rag-tag collection of one-off, one-man websites, something Potok claims he doesn’t count, except when he does, which is frequently, such as the “Sultan Knish: A blog by Daniel Greenfield” “group,””Islamthreat.com” and a couple of yahoos peddling pork-tainted anti-Muslim ammunition online.

It is with great sadness that we witness the passing of our all time favorite Potokian “hate group,” Casa d’Ice Signs, which was actually an Italian restaurant and bar in a K-Mart strip mall on the outskirts of Pittsburgh.

It’s not that we agreed with the crude messages that owner Bill Balsamico would put on the marquee sign outside his bar each week, but Casa d’Ice was the ultimate poster child for just how far Mr. Potok would go to stretch his definition of “hate group.”

The good news, according to Daniel Greenfield, is that Balsamico sold the business and retired, undefeated.

In all fairness to Mr. Potok, though, he never claimed that Balsamico was guilty of anything but “wrong thoughts.” As the stalwart Senior Fellow has proclaimed on man occasions:

“Our criteria for a hate group, first of all, have nothing to do with criminality, or violence, or any kind of guess we’re making about ‘this group could be dangerous.’ It’s strictly ideological.”

And so, there you have it. The suits at the SPLC decided that anti-Muslim “hate groups” were going to be the featured flavor for 2017 and instructed Mr. Potok to show “explosive growth” thereof for fundraising purposes and overnight one “group” becomes 45.

Some may remember that last year Potok swore that “the Klan had more than doubled in size!!” in 2015 by claiming it had grown from 72 chapter to 190 overnight. Potok failed to mention that he himself had slashed his Klan count from 163 to 72 the year before.

This year, as the graphic above notes, the Invisible Empire shrank by 32% to a mere 130 chapters, 30 of which Potok cannot find. And as usual, nobody in the media called him on it.

The graphic does include one truly astounding number, besides the spurious “197%” malarkey. Mr. Potok claims there are 193 Black “hate groups” in the country today, far outnumbering the KKK and every other category, respectively, and he knows where every one of those chapters are but two.

But that’s a topic for our next post.

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SPLC and “Disqualified Persons”

February 12, 2017

Is there a tax doctor in the house? Last week the Southern Poverty Law Center released its IRS Form 990 tax returns for Fiscal Year 2016. The Form 990 is always an informative read because it contains so much useful information.

Page 1, Line 15 notes that the company paid $20,291,678 in “salaries, other compensation, employee benefits,” (11% of which went to the top 9 execs, leaving the other 282 employees to split the rest for an average of $64,000 each.)

We get that. What we don’t get is the entry on Page 10, Line 6 that reads: “Compensation not included above, to disqualified persons.”

disqualified

Who exactly are these “disqualified persons” and are they being paid outside of the $20 million dollar pot listed on Page 1?

Naturally, the IRS website was virtually incomprehensible on the subject, but several other sources defined disqualified persons as:

  • “Disqualified persons” are those who are in a position to exercise substantial influence over the affairs of the organization, during the five years before the excess compensation was made.

  • “Disqualified persons” would include, for example, voting members of the governing body, and presidents, chief executive officers or chief operating officers, treasurers, and chief financial officers.

  • Also included as “disqualified persons” are certain family members of a disqualified person, and 35% controlled entities of a disqualified person.

  • Other people could also be considered “disqualified persons,” depending upon the relevant facts and circumstances that show substantial influence over the organization, such as a founder, substantial contributor, or manager of a substantial portion of the organization’s activities.

So, apparently, for a 501(c)(3) public charity like the SPLC, “disqualified persons” include founders, presidents, and other top executives, who are already got paid on Page 1, Line 15.

It can also include members of the Board of Directors, who, according to Page 10, receive no compensation for their efforts.

Or, it may include family members of all of the above.

Sadly, the Form 990 does not disclose the identities of the people who are receiving that $14.4 million compensation. Surely somebody has this information. Perhaps the Freedom of Information Act could help?

We ask these impudent questions because the SPLC has a habit of hiding expenditures from the donors. For example, the company routinely makes the claim that “During the last fiscal year, approximately 68% of our total expenses were spent on program services.”

History has shown that this figure relies on the use of legal but ethically dubious gymnastics on the part of the bookkeepers. For example, Page 1, Line 16b of the Form 990 states categorically that “total fundraising expenses” for the year came to $9,689,461, or 21% of expenses for 2016.

Page 10, Line 26, however, notes “joint costs” of $6,989,987. What are “joint costs”? According to the SPLC’s own auditor: “The Center incurred joint costs of $7,983,475 for educational materials and activities as part of fundraising appeals during the year ended October 31, 2016.” (p. 14) Note that the auditor’s figure comes in at nearly a million dollars more than the Form 990.

Translation: “Joint costs are fundraising costs assigned to other departments.” For example, “Management” spent $737,711 on postage last year. That’s more than 1.6 million first-class stamps. Don’t the employees have email? Who else would “Management” need to contact on such a scale?

As Charity Navigator notes on its website: “Although the use of this accounting “trick” is often perfectly in line with the accounting rules for the reporting of joint solicitation costs (AICPA SOP 98-2) these rules allow for many interpretations and judgments that can produce questionable results.”

Add the auditor’s joint fundraising costs to the fundraising costs listed on the Form 990, ($17,672,936) and we’re already looking at 38% of last year’s budget, not the 32% claimed by the SPLC.

As it turns out, compensation to disqualified persons is also spread out across several departments, including another $2 million to fundraising, not listed above. That brings Fundraising’s grand total to $19,834,444, or 43% of the budget, not the 32% claimed by the SPLC.

disqualified2

Long story short, if the Southern Poverty Law Center is willing to obfuscate its fundraising numbers to hide reality from the donors, why wouldn’t it use the same kind of accounting prestidigitation concerning what it pays its all-white executive suite?

Does anyone out there know how Watching the Watchdogs can obtain the names of these mysterious “disqualified persons”? If so, please contact us as soon as possible.

SPLC — 2017 Telemarketing Scam

February 4, 2017

The Southern Poverty Law Center has released its IRS Form 990 and Audited Financial Report for F/Y 2016, and as predicted, it was a very profitable year for the company.

Part of of that success comes from the SPLC’s use of third-party telemarketers who convince first-time donors that their money will be used to somehow “fight hate.” In reality, their money, and that of thousands of existing SPLC donors, will be used to fight poverty — for the telemarketers, that is.

As we’ve reported in years past, the SPLC pays these telemarketers far more than they raise over the phone. Last year the company paid telemarketers $2,266,887 donor-dollars to raise only $1,271,287 donor-dollars, for a net loss of $955,600 (p. 40).

2017-telemarketing-numbers

As usual, the big winner was Grassroots Campaigns who were paid $1.8 million to raise just over $600,000. Telefund only pocketed 62% of the $340,000 it raised, while Harris Marketing kept 83% of the $256,800 it took in.

Since 2011, the SPLC has paid Grassroots  $5,828,603 more than they received in donations. While it seems incongruous that a company like the SPLC, which is forever sending out fundraising letters, as “the need has never been greater,” would be able to survive such financial hemorrhaging, the truth is they’ll make a fortune from it.

In essence, the SPLC is paying the telemarketers for the personal information of thousands of proven first-time donors, which they will feed into their own uber-efficient in-house fundraising machine. They take a loss on the first year but make it up with years, or even decades of successive donations down the road, at a sweet 100% profit.

The company isn’t even taking that much of a hit, as all of the first-time donations go straight to the telemarketers and any deficit is made up out of the existing donor pot, without any of the donors being the wiser.

How many long-time donors does it take to make up a $955,600 “shortage”? At $100 a pop, just under 10,000 donors. At a more reasonable $25 donation rate, just under 40,000 well-meaning suckers.

Granted, the use of third-party telemarketers for such purposes is not illegal and is practiced by many of the largest non-profits in the country. It’s up to the potential donor to ask the solicitor how much of their money will actually reach the SPLC.

Since Grassroots is paid a flat fee, they can even tell Grandma with a straight face that all of her donation will go to “fight hate.” That the SPLC is only going to triple the amount and send it back to Grassroots is merely a minor detail.

We’ve only just made our first pass over the SPLC’s latest financials. Stay tuned for more information on where the money goes.


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