Lawmaker wants audit of two groups’ finances
Posted on Saturday, February 25, 2006
State Rep. Booker T. Clemons has asked the Arkansas Division of Legislative Audit to review financial statements of the Arkansas Legislative Black Caucus and an affiliated nonprofit, the Arkansas Legislative Black Caucus Foundation, while they were under the simultaneous leadership of state Sen. Henry Wilkins.
In an interview, Clemons, a Pine Bluff Democrat, said he filed the request partly out of concern about what happened to money raised at a foundation gala March 20, 2004, featuring U. S. Rep. Jesse Jackson Jr., D-Ill., at the Statehouse Convention Center in Little Rock.
In his audit request filed Thursday, Clemons wrote, “Senator Hank Wilkins has been in control of the income, expenses and handling of business of both of these organizations.”
Wilkins, also a Pine Bluff Democrat, said in an interview that he welcomed the audit and that a review of financial documents will “vindicate” him.
“Neither me nor my staff have done anything wrong with caucus or foundation funds,” Wilkins said Thursday. “I would be glad for an audit to be done.”
Wilkins is co-chairman of the Legislative Joint Auditing Committee, which would have to approve a motion authorizing the audit. If that happens, the audit would likely be “outsourced,” Legislative Auditor Charles Robinson said.
“We work for the Legislature,” Robinson said. “We don’t audit ourselves.”
At the time of the 2004 fundraiser, Wilkins was both foundation chairman and caucus president. His term as president expired in December 2004, and he resigned as foundation chairman Feb. 17.
Clemons said Wilkins never showed him and other caucus members how much money was raised at the Little Rock event, despite repeated requests for the information.
“I’m concerned about how the income and expenses have been handled by him,” Clemons said Thursday. “We want to know the truth.”
Billed as a fundraiser for the William H. Townsend Scholarship fund, the gala drew about 400 people. Some seats sold for as much as $ 100, said Vivian Flowers of Pine Bluff, who organized the event.
But Clemons said no scholarships have been awarded.
“We had students to apply but, as far as I know, no one ever received a scholarship,” he said.
Flowers, however, said one $ 600 college scholarship was awarded in November 2005. She said only one of five scholarship applications received by the foundation was complete.
She and Clemons also differed in how much money the gala raised. The legislator said it was $ 45, 000, but Flowers said the net, after expenses, was $ 18, 000.
“All the money is there,” in an account at Regions Bank in Little Rock, said Flowers, who was executive director of both the caucus and the foundation at the time of the fundraiser. She has since resigned both posts to concentrate on her own education, she said Wednesday.
The Arkansas Legislative Black Caucus Foundation was registered as a nonprofit corporation with the Arkansas secretary of state’s office March 9, 2004. That was 11 days before Jackson’s speech at the fundraiser. But the foundation didn’t receive its notice from the Internal Revenue Service classifying it as a 501 (c )(3 ) nonprofit organization until earlier this month.
A nonprofit can accept donations between when it registers with the state and when it is formally recognized as a tax-exempt entity by the IRS. Once IRS approval is given, tax-exempt status is retroactive to when the organization registered.
Nonprofits have 27 months to file for tax-exempt status from the time they are organized at the state level. The Arkansas Legislative Black Caucus Foundation received its tax-exempt designation four months before the 27-month deadline expired.
The foundation is not obligated to file financial statements with the Arkansas attorney general’s office unless it raises more than $ 25, 000 in a calendar year. Arkansas Code 4-28-404 establishes that threshold.
Flowers said that the foundation didn’t have any fundraisers after the 2004 event because it was awaiting 501 (c )(3 ) status.
Currently, the foundation is without an executive director, and two of the nine seats on its board are vacant. The seven board members are Elijah Harris of Hot Springs, Marshall Kelley of Pine Bluff, former state Sen. Bill Lewellen of Marianna, former state Rep. John Lewellen of Little Rock; state Sen. Irma Hunter Brown, D-Little Rock; former state Rep. Steve Jones of West Memphis; and Gary Tubar of West Memphis.
Wilkins said Clemons’ audit request was about the 2006 elections, rather than the 2004 fundraiser.
“I’m not really sure what he’s after, but since it’s election season, I guess he’s mounting a negative campaign against me and my integrity,” Wilkins said.
Wilkins expects to face former state Rep. Lindbergh Thomas of Grady in the May 23 Democratic primary for the District 5 state Senate seat. In 1998, Wilkins defeated Clemons in a state House race. Wilkins was elected to the state Senate in 2000 to a two-year term and in 2002 to a four-year term.
“There aren’t any politics here,” Clemons said. “I’m not doing anything for Lindbergh.”
Prior to Clemons asking for an audit, the Arkansas Legislative Black Caucus issued a memorandum of understanding Jan. 4 distancing itself from the foundation.
“The Arkansas Legislative Black Caucus Foundation is forbidden to raise money in the name of, or use the name of, the Arkansas Legislative Black Caucus in any manner or function,” the memo states. “Again, this letter serves as notice of the understanding that the Arkansas Legislative Black Caucus is totally disassociated from the Arkansas Legislative Black Caucus Foundation.”
State Sen. Tracy Steele, DNorth Little Rock, vice president of the caucus, said Thursday that caucus members approved the memorandum “to be clear that the two agencies are separate.” He and the caucus president, state Rep. Kevin Goss, D-Wilson, signed the memo.
“We needed clarification for the public,” Steele said Thursday.
The caucus comprises 15 members: 12 state representatives and three state senators, including Wilkins. Registered as a nonprofit corporation in May 1998, the caucus, among other things, monitors legislation that affects members of minority groups.
State Rep. Stephanie Flowers of Pine Bluff, a caucus member, said she was aware of concerns about the Little Rock fundraiser since before she was sworn into her House seat in January 2005. Shortly after the November 2004 election, Stephanie Flowers, a Democrat, said she and other newly elected legislators met with the caucus.
There was informal discussion about the fundraiser and what happened to the money, she recalled.
“That was the topic,” Stephanie Flowers said Thursday. “That’s what people were talking about.”
Stephanie Flowers, a second cousin to Vivian Flowers, said if the money raised was still in a bank account, and if the foundation was using the caucus’ name, then caucus members are right to be concerned.
“If you’re going to use the name Arkansas Legislative Black Caucus, then disclose to me what you’re doing,” she said.
Vivian Flowers said that anyone who was “trying to pretend like they don’t know what’s going on [with the money ] is being disingenuous.”
Clemons said that one of his chief concerns is that the foundation board never met and never reported to the caucus on the fundraiser and scholarship campaign.
Former state Rep. Joe Harris, who was on the foundation’s board from its inception in 2004 until his resignation in December 2005, said he wasn’t sure if the board had met.
“I didn’t attend any meetings,” Harris, who lives in Osceola, said Thursday. “I’m not aware of a meeting, but there could have been a meeting.”
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