Monday, March 28, 2011

SALF's Year of Zeros: Did the CDC executive who moonlighted as Save-A-Life's treasurer submit false information in a sworn report to the IL Attorney General?

As reported last October by The Hill, Douglas R. Browne was corporate treasurer of the Save-A-Life Foundation (SALF) from 2004-2009, when the Chicago-area nonprofit went belly up. That was a side gig for Browne. His full-time job has been working for 25+ years at the US Centers for Disease Control and Prevention (CDC) in Atlanta where he's now a Deputy Director.

Re: Browne's relationship with SALF, according to this November letter, the Inspector General of the Department of Health and Human Services has referred concerns about "potential misconduct" to the CDC for "further review and appropriate administrative action."

The "further review" may include questions about what happened to the $3.33 million awarded to SALF by the CDC. They may also be asking about Browne's signatures on SALF's AG990-IL reports. That's the financial report Illinois charities are required to submit each year to the Attorney General's Charitable Trust Bureau (CTB).

SALF has been under investigation by the CTB since last July. Unreported is that SALF's most recently-submitted AG990-IL triggered the investigation. CTB accountant Trudy Motyka rejected it as "incomplete."

Here's a series of demand letters sent over the months from Ms. Motyka to SALF founder/president Carol Spizzirri requesting missing financial records. (These letters are the most recent available documents associated with the investigation. Until that's completed, the barn door on FOIA requests has been shut as provided by IL state public records law.)

Calling the AG990-IL "incomplete" is something of an understatement. In fact, it's completely zeroed-out.

Whoever signed the report - presumably SALF founder/president Carol Spizzirri and Browne (whose names and signatures are on the sworn document) - claims SALF had no income or expenses from July 1, 2008 through June 30, 2009. Not a penny earned nor spent during 12 months, a period which shall herein be deemed SALF's Year of Zeros.

Here are but a few contradictory records.

An October 11, 2009 Chicago Tribune article reported, "(Carol) Spizzirri, 63, has quietly closed the foundation's headquarters in Schiller Park." Sounds like the description of a recent event, doesn't it?

Here's a snip from an independent auditor's report that accompanied SALF's previous AG990-IL for FY07/08, also a sworn document, also signed by Spizzirri and Browne, and also signed by SALF's accountant, Steven D. Garrels.

If you don't have your reading glasses, it says SALF signed a non-cancelable lease for their Schiller Park offices for the year ending June 30, 2009 (the last day of the Year of Zeros) agreeing to pay a total of $33,030 "paid in monthly installments of $2,753." Some might consider rent to be what professionals in the financial industry refer to as "an expense."

Before moving on, please note the last sentence: "Rent expense was $278,914 for the year ended June 30, 2008." That comes to...wait a second, let me get my calculator...divide by 12 and...WTF??? $23,242 per month one year, then $2,753 per month the next??? (Don't ask me, I'm lousy with numbers. Try CPA Steven D. Garrels.)

Since SALF apparently paid $33,030 rent during their Year of Zeros, the company may also have had phone service, utilities, and other common office expenses including salaries and employment taxes for employees and members of the board.

For instance, here's a screen shot from the minutes of a 2007 meeting of SALF's corporate board, in which Treasurer Browne and Corporate Secretary Rita Mullins motion and second $40,000 salaries for one another:  

In a May 9, 2007 article about a defamation lawsuit filed by her organization, Mullins told the Daily Herald reporter : "I know (SALF) to be a very well-run organization.”  

What about legal fees to pursue their lawsuit? According to news reports and this Harvard Law web site that tracks Internet free speech cases, the case was active through the Year of Zeros and beyond. Unless SALF's attorney was working pro bono, that sounds like an expense.

What about travel expenses, like this trip to the White House, extended to SALF as a valued member organization of FEMA, and attended by Corporate Secretary Mullins?

How 'bout income? Per this screen shot, SALF was soliciting donations for a September 19, 2009 fundraiser, waaaayyy past Day One of the Year of Zeros which was July 1, 2008. According to the YofZ AG990-IL with Spizzirri's and Browne's signatures, their organization didn't raise a cent from this event or from any other income sources - not even interest from money in their bank account(s).

That weird squirrel/rat character was SALF's mascot, "Perry Medic." Ha, ha, get it? Probably paid for with your tax dollars. Maybe not so funny. 

Also SALF must have incurred expenses designing and uploading this solicitation page for the 5K Perry Medic Rat Race and co-hosting the September 19, 2009 event with Anderson Hospital in Maryville, IL. SALF also had to pay for their website in Year Zero. At this writing, someone still owns their domain. Avast me hearties, another expense!

What are the potential consequences for providing false information on an AG990-IL? According to a representative of the AG's office, this amounts to perjury which falls under Illinois criminal statute 720 ILCS 5/32-2, making it a class 3 felony, punishable by up to three years in prison and up to a $25,000 fine. Presumably those who signed documents with false information might be held accountable.

Here's a screen shot from the bottom of page 2 of SALF's Year of Zeros AG990-IL: