Doing Well By Doing Good, Part 2

As the fallout continues over alleged misspending at the Democrat-connected nonprofit Community Action of Minneapolis, we should take a step back and look at how we got here.  [See Part 1 for more.]

Community Action is usually described as an anti-poverty agency.  In fact, its two biggest programs involve weatherizing (insulating) the homes of low-income households and signing up low-income households for energy assistance (utility bill subsidies).

During the early days of the Obama administration, these programs received huge additional funds from the 2009 Federal stimulus.

According to the nonprofit’s IRS Form 990 income tax returns, from Fiscal Year 2009 to 2010, the nonprofit’s revenue nearly doubled, from $9 million to $17.3 million.  Of that 17.3 million, a total of $13.2 million came in the form of government grants.  The 2010 revenue of $17.3 million fell to $15.8 million in 2011 and fell further to $11.1 million in Fiscal Year 2012 as the stimulus money was phased out.

Reporting in the Minneapolis Star Tribune indicates that problems at the nonprofit date back years, perhaps even decades.  If the propensity for alleged misspending was there before 2009, the opportunity certainly grew during the Federal stimulus years.

In the 2010 Fiscal Year, the group paid CEO Bill Davis (a former treasurer of the state Democrat party), $236,445 in total compensation.  That amount rose to $245,088 in 2011 and to $273,060 in Fiscal Year 2012.  As of 2012, the nonprofit is carrying $264,000 in deferred compensation on its balance sheet.

In 2010, the group spent more than $285,000 on travel, conferences and meetings.  That amount rose to $294,000 in 2011 and fell to $233,000 in 2012.

The Federal stimulus funds came and went, but the overhead costs that built up during these years remained.

According to its Federal tax returns filed during these years, the nonprofit lists a number of elected Democrats among its board members—Congressman Keith Ellison, state Sen. Jeff Hayden, and Minneapolis city council members Barb Johnson and Bob Lilligren—and not their designated alternates.

One of the less publicized aspects of the 2009 Obama stimulus was how it steered billions of dollars—not toward urgent infrastructure projects—but toward Democrat-favored constituencies and causes.  As day follows night, that sudden influx of money created opportunities for misspending of taxpayer funds.

In Part 3, I explore the origins of the nationwide Community Action movement.