The California Department of Justice on 31 January informed the Black Lives Matter Global Network Foundation (BLMGNF) that it is delinquent with The Registry of Charitable Trusts for failing to submit financial reports for the fiscal year ending 31 December 2020, according to a letter obtained by the Washington Examiner.
The California DoJ requested a copy of the BLMGNF's annual registration renewal fee report as well as its 2020 IRS tax forms and threatened to hold its "directors, trustees, officers and return preparers" personally liable if they fail to disclose what has happened to $60 million in donations within two months. On 2 February 2022, the BLMGNF, the front organisation of the Black Lives Matter movement, halted all its online fundraising streams, according to The Epoch Times.
Something is Very Rotten in BLM Charity
"The $60 million is based on a BLMGNF pro-forma IRS non-profit application," says Robert Bishop, a retired Certified Public Accountant (CPA) and business executive. "The BLMGNF's impact report issued in 2021 showed it raised approximately $90 million in 2020. Total lifetime donations are probably substantially higher."
The Associated Press broke on 23 February 2021 that the BLMGNF had raised more than $90 million in 2020. Out of this sum, $21.7 million was disbursed in grants to more than 33 organisations, while the foundation's own expenses amounted to approximately $8.4 million in 2020, according to a financial snapshot shared by the BLMGNF with AP.
However, the entity has long been subjected to criticism from both conservative observers and left-wing racial activists due to its financial non-transparency. Reports of BLMGNF co-founder Patrisse Cullors's real estate buying spree have added to suspicions that BLMGNF donations could have been used for personal enrichment, something that Cullors has vehemently denied. However, in May 2021 Cullors resigned from the charity, while Alicia Garza and Opal Tometi stepped away from the group months earlier.
Makani Themba and Monifa Bandele – BLM activists named by Cullors as her successors – announced in September 2021 that they never took the job of leading the charity. It is unclear who has been in charge of the BLMGNF's finances since Cullors stepped down. It later turned out that Cullors is tied to several other fundraising organisations whose finances have raised "potential red flags," according to The New York Post's 31 January report.
"BLMGNF is a criminal enterprise, given the massive diversions by Cullors," the retired CPA says. "Also, the Trustee Board failed to meet the IRS requirement of having a minimum of three trustees with only Raymond Howard remaining, resulting in the BLMGNF failing the IRS's organisation test (Reg. 1.501(c)(3)-1(a)(1))."
On 5 January 2022, the state of Washington ordered the organisation to “immediately cease” fundraising until it provides details of its financial activities. The attorneys general of California and Indiana followed suit. Meanwhile, the BLMGNF's charity registration is also "out of compliance" in Connecticut, Maine, Maryland, New Jersey, New Mexico, North Carolina, and Virginia, according to the National Review. Speaking to Fox News on Saturday, Indiana Attorney General Todd Rokita vowed to get to the bottom of the BLMGNF's "scamming" patterns.
The Decline of Black Lives Matter
"For much smaller offenses, charity con artists have gone to jail and been subject to substantial financial penalties," says Charles Ortel, a Wall Street analyst specialising in charity fraud.
Ortel praises Washington, California and Indiana's scrutiny of BLMGNF even though he considers it long overdue. The analyst explains that the California attorney general's assertiveness towards the charity's alleged scam is quite understandable: the Golden Bear State, as well as New York, has high income tax rates which make the values of purported donations to charities substantial, compared to states with low or even no income tax rates.
"Normally, [California and New York] are more vigilant and aggressive in making examples of charity con artists," Ortel says, adding that he expects New York State Attorney General Letitia James to take action against BLMGNF soon as well. "Good that the process has started finally and that, for now, Democrats are leading the charge."
Bishop is less optimistic about the initiative targeting the BLMGNF: "It is doubtful the states will do anything with the midterm elections coming in November," the retired CPA says. He does not rule out that the charity will just wither away with Cullors and others quietly evading responsibility.
At the same time, it appears obvious that BLM won't play any role in the 2022 midterm elections, according to Bishop. Previously, American observers openly praised BLM for "galvanising" African American voters during the 2020 presidential elections and to some extent contributing to Joe Biden's victory. However, this time, they are most likely to focus on the Capitol protest and use the "insurrection" narrative as a tool, Bishop forecasts.
"Also, in-play is the false narrative of Russia's pending invasion of Ukraine to bolster Biden's pathetic poll numbers and serve as a distraction from the morbid economy caused by his incompetent and corrupt administration," the retired business executive remarks.
BLM's Shady Finances Have Long Raised Concerns
Robert Bishop and Wall Street analyst Charles Ortel have been warning about the BLMGNF's apparent scam since early summer 2020.
Speaking to Sputnik on 24 June 2020, they drew attention to the fact that the charity has never been registered with the IRS. On 6 September 2016, the BLMGNF concluded a fiscal sponsorship with an International Development Exchange (IDEX), a 501(c)(3) tax-exempt nonprofit, later renamed as Thousand Currents. However, according to the observers, Thousand Currents never made fiscal sponsorship agreements with the charity public and never provided details on how solicited funds had been spent by the BLMGNF.
To complicate matters further, a heated debate erupted in 2020 about Thousand Currents' Vice-Chair of the Board of Directors Susan Rosenberg, who was sentenced to 58 years in prison on weapons and explosives charges in 1985 and pardoned by President Bill Clinton in 2001.
In July 2020, Thousand Currents stopped providing services to the foundation and assigned its BLMGNF fiscal sponsorship to the nonprofit Tides Foundation. Speaking to Sputnik in March 2021, Ortel and Bishop explained that either the Tides Foundation or the BLMGNF itself must disclose information about the foundations' multi-million earnings by 15 November 2021 in accordance with IRS rules. However, it never happened.
The observers also questioned the BLMGNF's tax-exempt status, arguing that the violence which accompanied BLM's summer demonstrations as well as the foundation's political activities, including its WhatMatters2020 campaign and slogans, contradicted the very idea of a "charitable organisation".
Scandals surrounding the BLMGNF have continued to pile up over the past few years, with local Black Lives Matter activists growing disenchanted and frustrated with the charity. Despite amassing considerable wealth, the BLMGNF has nevertheless repeatedly failed to support African Americans across the country, according to New York Magazine's Sean Campbell.
"Particularly during Black History Month, it is shameful to learn how so many persons and profit-seeking corporations would support fake BLM charities when legitimate needs of minorities in America still could be served by real tax-exempt organisations," Charles Ortel says. "The BLM cases prove that donors are not careful enough checking to see whether 'charities' actually exist and whether they have lawfully been operated as tax-exempt entities in each jurisdiction where they solicit donations."