A Tucson mom uses public records to shed light on state lawmakers' conflicts of interest
Besides looking through 990s—records filed by nonprofit organizations with the Arizona Corporation Commission—Darland examined Maricopa County Recorder's Office records. That's where Darland found a deed that showed [Arizona Representative] Yarbrough owned the building where SCA [School Choice Arizona] and ACSTO [Arizona Christian School Tuition Organization] are located.
Yarbrough purchased the 2241 E. Pecos Road property in Chandler for $275,000 from Bruce and Wendy Dunn, who happen to be listed as the president and director of ACSTO and SCA. Yarbrough charged ACSTO $44,981 in rent in 2007. SCA listed its rent as $4,000 on the organizations 2007 990 filing.
Darland put together a timeline that shows in 1998, Yarbrough and his partner, David J. Harowitz, co-founded ACSTO. Using the 990s, Darland determined that from 2001 to 2007, Yarbrough earned an average annual salary of $96,571.43 to serve as the executive director of ACSTO.
In 2002, Yarbrough was elected to represent Legislative District 21, but he kept his job as executive director of ACSTO. In October 2005, Yarbrough and Harowitz started HY Processing, a private company that processes tax-credit scholarships and grant applications from ACSTO and SCA. In 2006, ACSTO paid $363,620 in administrative fees to HY Processing; in 2007, it paid $426,895.
Besides rent and processing fees, Yarbrough and partner Harowitz also collected $171,171 in legal fees paid by ACSTO in 2007; they also garnered $1,181 from SCA that year.
Darland estimates that Yarbrough has earned at least $1,116,238 (in salaries, legal fees and rent) based on his work in the tax-credit industry.
Unbelievable! Representative Yarbrough authors bills every single year in the legislature to increase the amount of money that can be funneled to these back-door voucher schemes. Governor Brewer just called a special session of the legislature-- during a $3.3 billion budget crisis-- to create a new way for Yarbrough, I mean kids, to get more vouchers. The legislature responded by quickly passing a new law for more corporate tuition tax credits. Every Republican legislator except for Carolyn Allen (R- Scottsdale) voted for the tax scheme. Every Democrat opposed it.
Without seeing the records, I won't address the rent issue. Aside from that, has there been something illegal done? Has there even really been something unethical done? The Dunn's didn't elect Yarbrough, his constituency did. They elected him to perform a duty based on his campaign issues and voting record while in office. It is not only legal for him to have a day job, it is expected.
ReplyDeleteI also fail to see the relevance of the end of your post. Republicans and Democrats have polarized ANOTHER issue? Is this really even noteworthy?
Your posts all seem to come from the angle that vouchers are evil and we just understand this. Unless we're evil too, like the Republicans. I would ask you if you could explain to me, an evil Republican, why I shouldn't support vouchers?
In Arizona, vouchers and tax credits take money from an underfunded public education system (we are ranked 49th or 50th every year) and give them to private entities-- with no oversight, no accountability, and no peer-reviewed research showing private schools produce better results. This runs counter to normal Republican/conservative principles.
ReplyDeleteThe Arizona Constitution also forbids public money from going to private schools. Our Supreme Court recently ruled one of their voucher schemes as unconstitutional.
Tax credits are a loophole they use to get the same effect as a voucher. It's a money laundering scheme. Instead of paying your taxes to the state, you send that money to a private school and then are reimbursed, dollar for dollar, from the state.
It's pretty amazing that an average "mom" was able to find out so much doing a public documents search. Imagine what a real audit could do. Oh... current law says audits are not necessary for school tuition organizations. I'll give you one guess who authored that legislation. Instead, they say, the market will regulate itself.
Blade, I don't think Republicans are evil. The vote tally is what it is. I do believe that the current GOP legislators are turning public education into a partisan issue. That is alarming. Hopefully, the rank and file Republican who has kids in public schools will take notice.
There seem to be many questions here. But first and foremost illegal and unethical activities by an ARIZONA Representative affects all of us and not just the voters from his neck of the woods.
ReplyDeleteThere is no means test for the vouchers so we are left with any and all income streams siphoning my tax money for private education. When you are 50th in the nation in per pupil fuunding (conservative leaning ALEC)you cannot afford to cut public education and increase funding for private.
Next, to Rep. Yarborough, it may not be illegal (may) but it is definitely unethical. Every other STO's legal fees COMBINED does not equal the $60,000 he (we) paid himself in just last year. In 2005, his STO paid $24,000 in processing fees. The next year he had his STO go to his other company and the cost jumpeed to $375,000. Then last year it was $425,000. Is this how vouchers are supposed to work? I thought that the capital market forces was to reduce expenses?
I did say it MAY be illegal. I am copying this from another blog:
"501 c 3: http://www.irs.gov/charities/charitable/article/0,,id=96099,00.html
To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.
501 c 4: http://www.irs.gov/charities/nonprofits/article/0,,id=96178,00.html
To be tax-exempt as a social welfare organization described in Internal Revenue Code (IRC) section 501(c)(4), an organization must not be organized for profit and must be operated exclusively to promote social welfare. Pursuant to changes enacted as part of the Taxpayer Bill of Rights 2, the earnings of a section 501(c)(4) organization may not inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any managers agreeing to the transaction. See Introduction to IRC 4958 for more information about this excise tax. For a more detailed discussion of the exemption requirements for section 501(c)(4) organizations, see IRC 501(c)(4) Organizations. For more information about applying for exemption, see Application for Recognition of Exemption.
Seeking legislation germane to the organization's programs is a permissible means of attaining social welfare purposes. Thus, a section 501(c)(4) social welfare organization may further its exempt purposes through lobbying as its primary activity without jeopardizing its exempt status. An organization that has lost its section 501(c)(3) status due to substantial attempts to influence legislation may not thereafter qualify as a section 501(c)(4) organization. In addition, a section 501(c)(4) organization that engages in lobbying may be required to either provide notice to its members regarding the percentage of dues paid that are applicable to lobbying activities or pay a proxy tax. For more information, see Lobbying Issues.
So my questions...
How is Yarbrough's STO a 501(c)(3)"