Questions, Questions

30 Jul

Bruce Jackson doesn’t return emails. The Wendt Foundation doesn’t return phone calls. We are mere peons who do not merit a response, as we are little more than reactionary online purveyors of rumor, defamation, and innuendo. The only person who has put himself out there to speak on behalf of casino foes is Joel Rose, who appeared on Bauerle’s show with Kevin Hardwick today.

So far, what we’ve learned is that:

  • The Wendt Foundation has paid about $2 million to fund the legal battle, and this is available at its IRS 990 disclosure;
  • The Wendt Foundation paid the money to the Network for Religious Communities, which as a faith-based organization does not have to disclose to the public where it spends its money;
  • The group that Joel Rose runs, CACGEC, is formed under the auspices of the Network for Religious Communities, and is a registered New York non-profit corporation, but does not have 501(c)(3) tax exempt status. CACGEC is a party to the lawsuit now pending before Judge Skretny against the federal government;
  • The Citizens for a Better Buffalo, the membership of which includes all three Wendt trustees, is not a party to the pending lawsuit, but has been mentioned as being a recipient of Wendt Foundation funds via the Network for Religious Communities in furtherance of the lawsuit (to which it isn’t a party). The CBB is a non-profit corporation that does not have IRS tax-exempt status;and
  • The $2 million-ish has gone through at least one or two organizations before then being paid out to various and sundry lawyers, but no one knows exactly who and how much.
  • I am not an expert on any of this, but it would seem to me that if money is being paid from a non-profit, tax exempt organization to a non-profit but not tax exempt organization, there may be an issue there. At what point, if any, does the money become taxable? Where did the money go once it left the Network for Religious Communities?

    As WNYMind said, every time the Wendt Foundation gets to keep, tax-free, its capital gains, it derives a public subsidy. We have a right to ask these questions, and we have a right know the answers, without regard to whether or not we are anti-casino, pro-casino, or otherwise.

    Also see what Buffalo Geek has to say about his call to Joel Rose on Hardwick today.

    25 Responses to “Questions, Questions”

    1. Prodigal Son July 30, 2008 at 1:49 pm #

      Let me answer your last question. As a guy who has run several non-profits, before and after 501c3 status, I can tell you that a non-profit’s income is taxable, regardless of its source, if you do not have 501c3 status.

      That being said, since getting your 501c3 is an expensive and time consuming (i.e. 6-12 mo.) process, you often get a grace period to attain your status, provided you are actively working towards it. You can make about 26 months of previous income tax exempt, once you get your 501c3. But, if you don’t attain it, or never attain it, you owe tax on all that income. Like $2 million of income. The fact that it came from a 501c3 org doesn’t matter. And the fact that a 501c3 org (Wendt) is giving money to a non-501c3 org doesn’t matter either.

      But forming a non-profit corp, and getting a bunch of income, and just assuming you’ll be a 501c3 eventually, is a bit dangerous. I organized and ran a group that dissolved as a corporation before we got our 501c3. We owed normal taxes on all of our income, and it had to be resolved before we could officially dissolve.

    2. mike hudson July 30, 2008 at 2:16 pm #

      so the people who are against the senecas because they don’t pay taxes aren’t paying taxes either? each and every register member of the seneca nation is now recieving $8,000 a year from the casino revenue. for a family of three, the annual stipend is $24,000 a year. regardless of other income derived from employment etc. this in itself has raised many senecas up from poverty. additionally, schools and clinics have been built on the reservations, and numerous social programs have been instituted as a result of the casino profits.

      the question in all this then being: why would the wendt foundation, allegedly dedicated to improving the lot of the poor and needy in western new york, spend $2 million to fund an effort taht would, without a doubt, put people back into poverty?

    3. Colin July 30, 2008 at 3:22 pm #

      Non-profits who don’t yet have their c3 often get grant money or other donations “passed through” established c3 groups. I know a bunch of examples off the top of my head. It’s nothing nefarious.

    4. Buffalo Rox July 30, 2008 at 4:37 pm #


      Pundit I bet you have a 401(k) or an IRA. Capital gains in those accounts are also not taxed as such. You too are deriving a public subsidy but that doesn’t give me any right to answers from you.

    5. Chris Smith July 30, 2008 at 4:55 pm #

      Is Pundit using the judiciary to affect public policy in a region of nearly 1 million people? With his tax exempt funds?

    6. Buffalopundit July 30, 2008 at 7:19 pm #

      @Buffalo Rox: If I use my 401k money in a way not in keeping with the public policy that grants me the deduction; i.e., I withdraw it before I retire, then I pay tax and a penalty on top of that. By the same token, if Wendt uses its money to fund a lawsuit through one or two non-tax-exempt entities, then that money should be taxable.

    7. Prodigal Son July 30, 2008 at 8:19 pm #

      Colin – I have used pass throughs myself. That in and of itself is not nefarious, but two notes:

      1) You can pass your money through an organization whose mission is significantly different than your own. So while hospitals and art museums may both be tax-exempt eligible organizations, Kaleida can act as a pass through for a new museum downtown.

      2) The original 501c3, that acted as the pass through, is “responsible” for how that money is ultimately used. I.E They lose their 501c3 status if the organization they are hosting screws the pooch.

      I think this is getting close to the line, of both points. This lawsuit has been going on longer than 2 years, right? There should be tax statements from these non-501c3 non-profit corps by now.

    8. Colin July 30, 2008 at 8:58 pm #

      PS —

      Exactly. I imagine that the mission of the NRC is broad enough to include the anti-casino cause under it’s mantle. They’ve been involved in that fight long before the lawsuit was a twinkle in Wendt’s eye.

      Those who think this is somehow fishy should take note. It’s a passthrough. It happens frequently in non-profits.

    9. laughingoutloud July 30, 2008 at 9:55 pm #

      It probably wouldn’t hurt if the IRS took a look. This seems a tad more convoluted .

    10. Colin July 30, 2008 at 10:27 pm #

      I don’t see how it’s convoluted at all. Wendt grants money to NRC, who passes it through to CBB or CACGEC or whoever. I don’t see why it’d have to be any more exotic than that.

    11. WNYMind July 30, 2008 at 10:48 pm #

      It is amazing how the Wendt trustees (with the small exception of Kresse) have been silent throughout the discussions of their activities. They rely on Rose and Jackson to do their talking.

      It seems that they have lost in the court of public opinion for now, so they are going underground and putting their bets back on the courts.

      I am not surprised to see all 3 Wendt trustees as members of the CBB. It’s their baby. Interestingly, they turn up as the board presidents or treasurers of most of the nonprofits that receive large grants from the Wendt Foundation.

      It must be nice to have a big bank account to draw from for all your pet projects, and to pay yourself out of. Although Margaret Wendt didn’t have any children, she managed to set up a trust fund for the three Wendt trustees. They are Buffalo’s version of Paris Hilton.

    12. mike hudson July 31, 2008 at 12:37 am #

      it’s amazing. the anti-casino guy says he can’t see a problem with any of this.

      colin, if the wendt foundation or the cleveland museum of natural history or the masonic lodge were sharing their largess with people favoring even more indian casinos in western new york, would you see a problem in that?

      the state attorney general’s office and the irs should both be called in to examine this blatant misuse of tax-exempt status.

    13. Senecalady July 31, 2008 at 7:25 am #

      what is noble about questioning the treaties that the US made with tribal governments? Is it noble to fight against what is a supreme law of the land? They can buy into a Harrah’s but and make money for themselves, but when it comes to everyone else, Casino’s are bad. I especially find it interesting that ever since the Seneca’s told Harrahs “no”, They all of a sudden become anti-casino??? Mike Hudson makes a good point in his first blog.
      They are just anti-indian NO DOUBTS ABOUT IT.

    14. mike hudson July 31, 2008 at 7:43 am #

      brian, you seem like a pretty smart guy. why hasn’t the wendt foundation spent a nickle over — say — the past 50 years funding groups to oppose off track betting, the state lottery, catholic church bingo etc. if they’re so interested in protecting “the institutions they typically help”? gambling’s gambling, right?

      grow up.

    15. frieda July 31, 2008 at 7:44 am #

      @colin I don’t see how it’s convoluted at all. Wendt grants money to NRC, who passes it through to CBB or CACGEC or whoever????? Sounds like your confused too.

    16. frieda July 31, 2008 at 7:48 am #

      @Brian, What institutions are those???

    17. frieda July 31, 2008 at 10:39 am #

      @BRIAN “Where exactly has a downtown casino helped a city”
      Take Niagara Falls for example. lets start with the obvious, 3000 new jobs and a 100 million payroll, a four star hotel, and a 23 milllion payment to the city of Niagara Fallls. “Spinoff development includes a new Crown Plza (accross the street), the renovation of several Hstoric apt buldings nearby into Luxury rentals.” The construction of a worldclass golf course nearby in Lewiston, by the Senecas. Plans to be relase shortly BY the SGC for an additional 500 million development at the site, including the construction of a new hotel tower which will be the tallest hotel between Chigago and NYC. According to Smith travel NF NY experienced the biggest increase in Hotel occupancy in the nation last year. “And lets just not forget the world class entertainment , which otherwise might not be available in WNY. “nd here’s one I know the anti-casino folks will hate, the drop in crime in the area, which NF officials, not me, attribute to the increase in street activity associated with the casino.”

      NOW ITS YOUR TURN. Where exactly can you point to where a casino has hurt a city? Where? UHHM , I thought so.

    18. Senecalady July 31, 2008 at 11:42 am #

      HOOOOOOIE! Thank you Frieda!

    19. Prodigal Son July 31, 2008 at 11:52 am #

      Colin – my fingers failed me. I meant to say “you CAN’T pass through money to an organization different from your own,” and “Kaleida CAN’T pass money to a museum.” Maybe that’s why you think we agree (it would be a first).

      What umbrella could be large enough that a Network of Religious Communities could have tribal sovereignty lawsuits as a mission?

      Here is their mission from their own website:

      “Motivated by the sacred texts and traditions of our unique faith communities, the Network of Religious Communities, Inc., in recognizing a multiplicity of religious beliefs, respects the right to be and to celebrate who we are within out particular religious traditions.

      Because our humanity is deeper than our divisions, we: promote dialogue, facilitate the sharing of spiritual activities and resources, and work for justice and peace.”

      Other activities on their website include supporting soup kitchens, providing chaplains for the boyscouts, and hosting an interfaith women’s group. The things one would expect from such a group with that mission.

      And, oh, yeah, a $2 million lawsuit.

      One of these things is not like the other.

    20. Colin July 31, 2008 at 12:32 pm #

      hudson —

      If Wendt was funding pro-casino activities, I would disagree with their decision. I wouldn’t question their right to make that decision, however.

      senecalady —

      If the Network of Religious Communities is “anti-indian,” someone should tell the Indigenous Women’s Initiative. You’ll find them on the second floor at the NRC building.

      PS —

      “work for justice and peace” is pretty broad. Perhaps they feel that a casino that takes money from the poor and elderly is unjust. You may disagree, but you don’t have to agree with the cause to see that it can fit under the umbrella.

    21. Jon Splett July 31, 2008 at 12:35 pm #

      Saying you’re not against casinos, just against a casino in this city is sort of like saying you don’t hate black people, you just don’t want your daughter to marry one.

    22. Colin July 31, 2008 at 1:03 pm #

      No it isn’t. Casinos make perfect sense in a place like Las Vegas. They make much less sense here. Whether you agree with that analysis or not, it’s rational.

      Thanks for the stupid and insulting analogy, though!

    23. laughingoutloud July 31, 2008 at 3:30 pm #

      @Colin Indigenous Women’s Initiative must be very well funded, since they cannot even afford a phone. You sure that’s not a closet with something written on the door.

    24. Frieda August 1, 2008 at 10:04 am #

      @Brian, Really!! care to point out where you got that 3:1 figure from? Sounds like pure BS to me.

    25. RisingDamp666 August 1, 2008 at 11:28 pm #

      If it’s really the zero-sum game that anti-casino Cassandras believe it is, then you have to examine how jobs might be redirected by the presence of a casino. Fewer people sliding cigarettes under the bulletproof glass at a local bodega in favor of working at a casino in food service, hospitality or card table positions? One less cashier at the Delta Sonic in favor of a pit boss? How should we account for the turnover? At the end of the day, this casino hotel project will reward many of those working there and yes, with local dollars. Too bad those dollars would have been spent across the Bridal Falls otherwise. What a bunch of uptight ninnys.

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