D.C. Council member Michael A. Brown is facing a new line of attack, from an opponent who is raising questions about a nonprofit organization Brown once ran.
Independent candidate David Grosso sent a letter to the IRS on Monday requesting an audit of the Ronald H. Brown Foundation, which was established in 1996 and named for Brown’s father, a former commerce secretary and chairman of the Democratic National Committee who died in a plane crash that year.
IRS records show that the organization’s tax-exempt status was revoked in 2010 for not filing tax returns for the previous three years. Also, District records indicate that the group’s corporate registration was revoked in 2006 after failing to submit a mandatory biannual report, making it ineligible to do business in the city.
Brown said in a statement that the foundation has not been active since 2008, when it held a golf tournament fundraiser during the Democratic National Convention in Denver.
Through 2007, nonprofit organizations reporting less than $25,000 in annual gross receipts did not have to file a return with the IRS. Today, those that raise less than $50,000 in a year must file an “e-Postcard” — a bare-bones status report — to maintain their tax-exempt status.
Brown said that to his knowledge, the group has been “in full compliance with all IRS filing requirements.”
“As far as the Foundation is concerned, there are no outstanding issues or matters to be resolved,” he said. “If requested, further information will be provided.”
When the foundation was created, the board included Washington power brokers Tommy Boggs and Vernon Jordan. Later, cable TV mogul Robert L. Johnson joined the group.
In 1998, the foundation reported revenue in excess of $1.2 million. The income, the nonprofit reported, was used mainly to support the Ronald H. Brown Center for Politics and Commercial Diplomacy — devoted to providing “practical training” in international business and political skills.
But fundraising fell sharply in subsequent years. In the latest tax return available through Guidestar.com, an online clearinghouse for nonprofit tax filings, the group raised about $552,000 in fiscal 2001 — less than its $691,000 in expenses. In its most recent corporate status report, filed with the District in 2004, Boggs, Jordan and Johnson were no longer listed as directors; Brown, his mother and his sister held three of four listed board seats.
Brown said that the foundation served hundreds “of young people in the United States and around the world” with internships, scholarships and other opportunities. Other nonprofits, he said, have since assumed the foundation’s scholarship programs.
The focus on Brown’s nonprofit comes as Grosso and other challengers press attacks on Brown’s financial and management skills. Last month, Brown disclosed that more than $100,000 had gone missing from his campaign account and claimed that his former treasurer had stolen the money. An attorney for the ex-treasurer, Hakim Sutton, claims that the money was paid out as salary with Brown’s knowledge. Former Brown campaign aides said in a recent article in The Washington Post that Brown’s management style was dysfunctional and that he was sloppy with campaign funds.
“His lack of transparency, accountability and responsible reporting with respect to his non-profit fits his troubling pattern of financial mismanagement,” Grosso said in a news release.
Brown struck back with his own statement, accusing Grosso of “desperation” and attempting to “denigrate the name of my late father and the important work” of the foundation named for him.
Tim Craig contributed to this report.