SPLC reported to have funneled millions of dollars to offshore accounts

This story, which I’ll excerpt from The Free Beacon, has so far been reported almost exclusively by the right-wing media, but independently by several such sites (for example, the Alabama Political Reporter). Take it with a grain of salt, though there are documents you can look at to check. If it’s true, it should certainly be reported by the press in general. And perhaps this is all normal because I don’t know from taxes.

We all know that the Southern Poverty Law center (SPLC), once a respectable organization, has come into some disrepute because it listed the Islam reformers Ayaan Hirsi Ali and Maajid Nawaz (who’s sued them) as “anti-Muslim extremists,” and, as I noted, they’ve also been faulted for amassing a huge endowment that isn’t much used, as well as paying exorbitant salaries (over $350,000) to its CEO and its Chief Counsel.

Now they may be in a lot more trouble. As the Beacon reports, the SPLC’s filed tax returns show that it appears to have transferred several million dollars to an offshore account in the Cayman Islands. Here is the report with links:

The SPLC has turned into a fundraising powerhouse, recording more than $50 million in contributions and $328 million in net assets on its 2015 Form 990, the most recently available tax form from the nonprofit. SPLC’s Form 990-T, its business income tax return, from the same year shows that they have “financial interests” in the Cayman Islands, British Virgin Islands, and Bermuda. No information is available beyond the acknowledgment of the interests at the bottom of the form.

Here’s that brief entry:

However, the Washington Free Beacon discovered forms from 2014 that shed light on some of the Southern Poverty Law Center’s transfers to foreign entities.

The SPLC’s Form 8865, a Return of U.S. Persons With Respect to Certain Foreign Partnerships, from 2014 shows that the nonprofit transferred hundreds of thousands to an account located in the Cayman Islands.

SPLC lists Tiger Global Management LLC, a New York-based private equity financial firm, as an agent on its form. The form shows a foreign partnership between the SPLC and Tiger Global Private Investment Partners IX, L.P., a pooled investment fund in the Cayman Islands. SPLC transferred $960,000 in cash on Nov. 24, 2014 to Tiger Global Private Investment Partners IX, L.P, its records show.

Here’s that bit:

The SPLC’s Form 926, a Return by a U.S. Transferor of Property to a Foreign Corporation, from 2014 shows additional cash transactions that the nonprofit had sent to offshore funds.

The SPLC reported a $102,007 cash transfer on Dec. 24, 2014 to BPV-III Cayman X Limited, a foreign entity located in the Cayman Islands. The group then sent $157,574 in cash to BPV-III Cayman XI Limited on Dec. 31, 2014, an entity that lists the same PO Box address in Grand Cayman as the previous transfer.

The nonprofit pushed millions more into offshore funds at the beginning of 2015.

On March 1, 2015, SPLC sent $2,200,000 to an entity incorporated in Canana Bay, Cayman Islands, according to Securities and Exchange Commission (SEC) records and run by a firm firm based in Greenwich, Ct. Another $2,200,000 cash transfer was made on the same day to another fund whose business is located at the same address as the previous fund in the Cayman Islands, according to SEC records.

Here’s the reporting of the first $2.2 million transfer:

No information is contained on its interests in Bermuda on the 2014 forms. SPLC’s financial stakes in the British Virgin Islands were not acknowledged until its 2015 tax form.

You can look up the other information yourself through the links.

Now I’m not a tax person nor an accountant, but this sounds pretty weird to me. In fact, when the website contacted Jackson Thornton, the Montogomery, Alabama firm that does the SPLC’s taxes, they refused to comment and hung up. Well, maybe they don’t have to discuss this issue, but some experts have said such transfers are deeply weird:

“I’ve never known a US-based nonprofit dealing in human rights or social services to have any foreign bank accounts,” said Amy Sterling Casil, CEO of Pacific Human Capital, a California-based nonprofit consulting firm. “My impression based on prior interactions is that they have a small, modestly paid staff, and were regarded by most in the industry as frugal and reliable. I am stunned to learn of transfers of millions to offshore bank accounts. It is a huge red flag and would have been completely unacceptable to any wealthy, responsible, experienced board member who was committed to a charitable mission who I ever worked with.”

“It is unethical for any US-based charity to invest large sums of money overseas,” said Casil. “I know of no legitimate reason for any US-based nonprofit to put money in overseas, unregulated bank accounts.”

“It seems extremely unusual for a ‘501(c)(3)’ concentrating upon reducing poverty in the American South to have multiple bank accounts in tax haven nations,” Charles Ortel, a former Wall Street analyst and financial advisor who helped uncover a 2009 financial scandal at General Electric, told the Free Beacon.

Of course this website, and several others who reported these transfers, are opponents of the SPLC’s left-wing agenda, which is why we have to be cautious about these reports. Perhaps the SPLC’s behavior is kosher. Still, I’d like to know why they’reputting money into Cayman Island accounts.