Tag Archives: wendt foundation

Wendt Foundation: Bullying WNY Entrepreneurs?

3 Dec

If you’ve been reading WNYMedia.net for a while, you’ll recall that two years ago, I wrote a relatively benign post wondering why Buffalo’s Wendt Foundation was funding anti-casino litigation rather than spending $2 million on funding artistic endeavors in Buffalo – which is its stated mission.  In response, then-Artvoice-columnist, casino opponent, and UB Professor Bruce Jackson accused me of being part of some nefarious local media cabal out to “swiftboat” the Wendt Foundation.

Always game for a good internet fight, WNYMedia.net looked further into the Wendt Foundation, which was (and probably still is) instrumental in funding any and all anti-casino litigation affecting Western New York, had significant multi-year holdings in Harrah’s, a casino operator.  We also disclosed for Bruce that his kids were among the lawyers representing the anti-casino group.

In the wake of these revelations, we tried to penetrate – and expose – the byzantine way in which this financing went from the foundation to the lawyers involved.  We couldn’t, however, because the money was all filtered through the Network for Religious Communities.  Faith-based non-profits such as the NRC are not required to disclose where they get their money, nor how they spend it.  It’s a perfect vessel through which transparency goes to die.

Despite numerous requests, no one from any of the myriad anti-Casino groups agreed to let us see where the money for its lawsuits came from, nor where it went. No one from the NRC ever responded to similar inquiries, and the whole thing ultimately got the Donn Esmonde, “hey let’s ignore all of this – these are my friends” treatment.  The facts are laid out below, and specific questions remain, such as:

  • 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 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.

Why am I bringing this up?

You may recall Michael Caputo – political dirty trickster, the Robin to Roger Stone’s Batman – the guy who ran Carl Paladino’s campaign for governor.  During that campaign, I Googled him and came upon this item.  Evidently, Caputo had decided to move back to WNY even before Carl hired him for his recent gubernatorial run, and he and his wife intend to open a tea shop in East Aurora. They intend to name it the “Roycroft Tea Company”.

That is to say, they intended to do so, until the Wendt Foundation got involved.  In an April post at his personal blog, Caputo writes,

Maryna and I have been working for months to build a small business here in East Aurora – the Roycroft Tea Company – in a building on the historic Roycroft Campus. Our goal: to bring high-quality organic loose-leaf teas to Western New York, then open more stores outside the area.

We traveled to India and looked over some of the finest tea plantations in the world, searching for top notch teas. We’ve visited some of the nation’s finest tea rooms to investigate the business. Now Maryna is nearly done selecting 24 teas we will offer “From Farm to Family.”

Now we are ready to open!

Not so fast. A local group that claims to be a non-profit has decided to oppose our business idea. Never mind that the Roycroft is a part of history. Never mind that there are businesses across the United States that use the name. Never mind that we will employ at least ten local people.

The Wendt Foundation (no Web site – make you suspicious too?) says they own the rights to the name “Roycroft” just because they bought one of the buildings on the historical campus.

We have vowed to fight these bullies to the death

Evidently, the Wendt Foundation claims ownership to the rights and use of the word “Roycroft” because it owns and runs the inn that goes by that name. Yet both the Roycroft Inn and the Caputos’ tea company are sited on what is called the “Roycroft Campus”.

Michael Caputo seemed confident the legal process would result in a favorable ruling for Roycroft Tea: “I’ve been involved in patent and trademark litigation in the past. I was a plaintiff in MercExchange v. Ebay, which lasted 77 months, so I’m quite familiar with that type of litigation.We’ve done our homework. You can’t buy history. It’s been proven over and over again.”

The Wendt Foundation’s lawyer claims that people will be confused over whether they’re going to the big hotel or the little tea place in the town that is synonymous with Fisher-Price and Roycrofters.

The word “Roycroft” was chosen by Elbert Hubbard to describe his arts-and-crafts movement because it was the last name of a pair of London bookbinders in the 17th century, and because it means “king’s craft”, evoking the guilds of yore.

I don’t see any reason why it would be unreasonable for an East Aurora-based business located on the Roycroft Campus to use the “Roycroft” name, provided the wares being sold are made skillfully with craftsmanship, rather than imported teabags in a box.  I may not agree with Caputo’s politics, but I even more strenuously dislike some uber-wealthy local foundation bullying a small-business local entrepreneur.  I don’t think the Wendt people realized whom they were up against.

More on this later.  Stay tuned.

Dear Joel Rose:

30 Aug

If you’re going to close out an email to your anti-casino recipient list with this:

Meanwhile, we do not have the luxury of ignoring the battle for public opinion. The pro-casino talk show hosts and bloggers have been having a field day, spreading lies about our motivations and our sources of funding, along with the usual nonsense about the likely impact of a casino. It is up to us, that is, it is up to all of us including YOU, to set the record straight. Please do what you can to help win the battle for public opinion.

Perhaps you would then like to ask your benefactors at the Network for Religious Communities and allies at Citizens for Better Buffalo to open the books so we can all see who has received Wendt Foundation largesse?

Only then can we really determine who’s been “spreading lies”. And since I’m not aware of another blog that posted about the casino ruling yesterday, I’m assuming you were referring to me, in which case I’d love for you to show me the basis for your charge that I am “pro-casino”.

I know you’re all about the transparency and accuracy, so I eagerly await the Network’s and CBB’s financial disclosures. After all, you brought it up. Thanks so much.

Love, BP

UPDATE: I have pasted Joel Rose’s response in comments because he claims not to be able to post comments.

Skretny Punts

26 Aug

Judge Skretny refused today to issue an order shutting down the Buffalo Creek casino.

The judge instead directed a federal agency — the National Indian Gaming Commission — to “carry out their congressionally mandated obligations” and decide whether the casino should be shut down…

…Today’s ruling comes as construction crews continue erecting the structural steel for the casino project on nine acres of land off Michigan Avenue east of HSBC Arena.

Attorneys for the opposition, Citizens for a Better Buffalo, and the U.S. government, which represents the National Indian Gaming Commission, were originally expected to have arguments before Skretny. But he told both sides on Aug. 15 that he would rule on their motions on or before today.

Today is also the first day that new rules by the National Indian Gaming Commission take effect, which the government says makes the Seneca land eligible for gambling.

Skretny’s anger at the government attorneys for not telling him about the new rules changes while he considered the casino’s future comes through in today’s opinion.

Citizens for a Better Buffalo, you’ll note from the caption of the decision, is not a party to the action, which again brings up the question of why the Wendt Foundation is funneling its funding of this lawsuit through the Network for Religious Communities then through non-party Citizens for a Better Buffalo.

Whatever. No one cares.

Debunking Bunk

11 Aug

Robert Kresse, Trustee and Secretary of the Wendt Foundation in the Buffalo News:

Wendt’s three trustees agreed to finance the lawsuit in January 2006, and the foundation so far has funneled $1.9 million through the Network of Religious Communities, one of the plaintiffs, for legal expenses.

The trustees were unaware of the Harrah’s investment until a periodic review following their decision to fund the suit, said trustee Robert J. Kresse.

Investment advisers Groesbeck Investment Management, based in New Jersey, determined the investment choices. The trustees decided to sell because the holdings were “inconsistent” with their position on gambling in the City of Buffalo, Kresse said.

The Wendt Foundation’s 2005 form 990, signed by Trustee & Secretary Robert Kresse lists and itemizes the Harrah’s investment.

The Wendt Foundation’s 2004 form 990, signed by Trustee & Secretary Robert Kresse, lists and itemizes the Harrah’s investment.

The Wendt Foundation’s 2003 Form 990, signed by Trustee & Secretary Robert Kresse, lists and itemizes the Harrah’s investment.

That “periodic review” took place every year ’round tax time. Just so we’re clear.

Wendt in the Niagara Falls Reporter

4 Aug

Mike Hudson, commenter and agent provocateur on this site, writes up the Wendt Foundation imbroglio over at his paper. Thanks to Mike for the kind words.

Bruce Jackson and Carl Paladino

3 Aug

I was scrolling today through the Citizens for a Better Buffalo website – which hasn’t been updated since 2007 – and found at the very bottom of a loooooong scroll this entry:

Jackson to Paladino: “What’s your interest?”
8/17/2006

In an astounding exchange of e-mails, Professor Bruce Jackson asks developer Carl Paladino why he promotes the Casino so heavily. He does not get an answer to his question. Indeed, the style of Paladino’s response suggests that he surely has something to hide. Citizen for a Better Buffalo, YOU decide. To read this apalling exchange, click here. – Ed

Here is the .pdf of Jackson’s Artvoice piece detailing his email correspondence with Carl Paladino.

Now, when Jackson attacked me, he accused me of being part of a conspiracy to “Swiftboat” the holy, sainted Wendt Foundation. Unlike with Paladino, Jackson did not put fingers to keyboard to ask me about it. That’s shoddy “journalism”, even from a prestigious SUNY Professor who earns $150,000. I have emailed Jackson a total of three times since this whole thing blew up and he has not deigned to respond to me. Typical, as Jackson doesn’t have to answer for anything he says or writes.

Note that Jackson asks Paladino:

I’m trying to figure out why you keep pushing the casino so aggressively

As he has since done with me, Jackson starts off with the assumption that anyone who in some way defends the casino or criticizes its opponents has some personal or financial interest in it. Jackson’s motives, of course, are pure and sweet and taste of honey and roses. Right?

I’m not saying Jackson has any ulterior motive, but what’s good for the goose is good for the gander. He is quick to attack those who do not share his views, yet is slow to admit his own interest in the casino battle. So, if it’s appropriate for Paladino, it’s appropriate to ask the question of Bruce Jackson (here, since he won’t respond to my emails):

I’m trying to figure out why you keep pushing casino opposition so aggressively. I’m also trying to figure out where the money goes.

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.

    WNYM on WBEN with Joel Rose

    30 Jul

    joelrose.jpg

    This morning, Dr. Kevin Hardwick was hosting the “Tom Bauerle Show” on WBEN 930AM and featured as his in-studio guest, Joel Rose of CACGEC, CAGNY Action, LLC., and CAGNY, Information, LLC.

    I called in to ask Joel a few questions about statements he made on the show and in various responses to our questions on the Buffalo Issue Alerts email list, BuffaloPundit’s blog, and in other forums.  I would link to the podcast of this segment, but WBEN still does not save their shows for Internet broadcast and I wasn’t in a place where I could record the call.

    For some reason, the public seems to have accepted as fact that the Wendt Foundation was wholly unaware that their sole $120MM investment fund included $4MM of stock in Harrah’s Entertainment Corporation during a three year period.  I made the mistake in my haste by claiming that this investment represented 10% of the foundation’s holding, but, 3% is still a sizable portion of the fund.  For the trustees of the Wendt Foundation to claim that they were unaware, indicates a violation of their fiduciary responsibility to the fund.  The counter to this argument seems to be that Joel and Dr. Hardwick aren’t sure as to where the money in their TIAA-CREF funds are invested.  First of all, you should know where your retirement funds are invested and the comparison is false anyhow.  If your SOLE paid responsibility (at $1384 per hour) is to manage the assets of a charitable foundation, you have a responsibility to know where and how it is invested.

    Now, through Joel’s protestations that his organizations are not beholden to me or anyone else, my counter is that if his organizations and those which he is affiliated with wish to take legal action which affects a regional population of nearly 1 Million people, they owe us transparency.  Transparency on the sources of their funding, the manner in which that funding is distributed, and to whom that funding is eventually distributed.

    I asked Joel if his organization, which is a not-for-profit domestic corporation registered in New York State, was willing to open its books in regards to the prosecution of this lawsuit.  After all, they are the lead plaintiff in the lawsuit.  He declined.  He says that he is unwilling to open up his donors to inspection from the public and not be “grist for the Chris Smith mill”.  If Julius Olmsted the IX of Woodward Avenue gave $50 to the group, you won’t find that on a Form 990.  If Mr. Olmsted were to have given $50,000, that would be on the document.  We would also know if this person had any personal stake in the eventual defeat of a Buffalo casino.

    When you are a not-for-profit corporation, you need to disclose your funding streams and your activities via an IRS Form 990.  Would this open up his individual donors to the public microscope?  No, we’re interested in the finances of his organization specific to the lawsuit.

    What’s this?  None of his three organizations have filed for tax exempt status in New York State and thus are exempt from filing any reporting documents?   They operate as a program of the Network of Religious Communities in Western New York and due to that organization being faith-based, they are exempt for reporting requirements through the IRS.  While I have been looking into non-profit law to assess how that process should and does work under the proper circumstances, I haven’t reached a conclusion.  However, the people have a right to know how the NRC has managed the funds received from the Wendt Foundation and other donors specific to the prosecution of the lawsuit.

    The public has a right to know about the motives, finances, and structure of the organizations that are creating and affecting policy in our region.  Will the NRC and Joel Rose’s three organizations, open their books for the public?

    So far, Joel says no.  Perhaps that will change as this process continues apace.

    Shorter Esmonde

    27 Jul

    Seriously, though – what “price” are casino foes paying for “telling the truth”? That people disagree with them? That their funding is being scrutinized?

    The litany of negatives that go along with a casino development in Buffalo are often weighed against the positives, and the ultimate balance is somewhat subjective. Even Esmonde acknowledges some positives from a casino project. But what’s often repeated by opponents is how the money will be taken out of the community. Really?

    Aren’t the Senecas part of the “community”? Don’t they spend their money in the same places as you or I? Aren’t they Western New Yorkers just as much as Stan from Lancaster or Johnny from Niagara Falls? Haven’t the Senecas been just as economically downtrodden as any other minority?

    The Senecas and their defenders don’t promote the casino as being the savior of Buffalo, so opponents’ arguments to the contrary are beside the point.

    There are myriad businesses in existence in this community that are probably a net drain on society and the economy. This may just be another added to the list. So?

    One of my biggest problems with the whole Seneca casino deal is that there was no public input. I’d much prefer that the state constitution is amended to permit legal, tightly regulated, taxed class III gaming in New York State. At the end of the day, however, we elected the politicians who cut this deal with the Senecas. No one elected its opponents.

    The Other Side

    26 Jul

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    The Citizens for Better Buffalo’s website has been unearthed. And here is the site for the Network of Religious Communities.

    There’s been a lot of defense and pushback and, in some cases, venom thrown our way in the last couple of days over all of this, so let me pose a question.

    Why, exactly, is it wrong to ask questions about the organizations and charities behind the effort to block the casino? Why is it so offensive to ask them to explain the interpersonal and inter-entity relationships, and their status and programs? All three Wendt Foundation trustees belong to (or have leadership positions) in the Citizens for a Better Buffalo. One Wendt Foundation trustee is a member of the Preservation Coalition. Funds for the battle against the casino are funneled through the Network of Religious Communities.

    All we’re asking is who, why, how much, and to whom.

    We all know how the Senecas get their money and why they fight.

    We all know how the federal government gets its money.

    This is a matter of public concern and interest, and these not-for-profit organizations and charitable foundations can’t just do whatever they want, willy-nilly, without transparency.

    As a personal aside, the funniest part of all this for me is that I never would have followed up on my original post had Jackson not called me out.