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Davis Vanguard IRS Disclosure Problem

Door_cropPART II: Obfuscation and Misdirection

By Colin Walsh

Part I of the article series “Vanguard Slams the Door on Required Public Disclosures” discussed information requests made by Rik Keller to the Davis Vanguard seeking in-person inspection of documents required by federal law to be made available and the Vanguard’s refusal to provide these, both figuratively and literally slamming the door in the face of these requests. This information request is directly connected to the investigative work that Keller and others (including myself) have been performing to publicly document possible ethical and legal violations by both the Vanguard and the Davis City Council in relation to a planned upcoming fundraiser that the Vanguard has advertised, Keller and others have also publicly called for the Vanguard to adopt principles/policies/guidelines regarding ethical journalistic practices and funding/donor transparency, including standards and guidelines advocated by the Society of Professional Journalists (SPJ) and the Institute for Nonprofit News (INN).

After the Davisite published Part I of this series, the Vanguard posted some of the tax records Keller requested to www.davisvanguard.org. On the face of it this may seem responsive to the requests and the previous article, but there is more to the story.

Davis Vanguard Attorney Threatens Legal Action to Stop Investigation and Reporting

At 7 PM the same day (5/3) of the in-person document inspection request, Rik Keller received an email from attorney Paul Boylan identifying himself as a representative of “David Greenwald and his family.” Boylan followed up with a series of emails and made a number of accusations against Keller that I will not repeat in this article because they are contrary to what I directly witnessed in person. Boylan used these false accusations as a pretext to demand that Keller, “Stay away from Mr. Greenwald, his family, his place of business and his home.”

 The Vanguard lists two official addresses in public documents filed with the CA Secretary of State—the G Street Vanguard office, and Greenwald’s home in South Davis.   Boylan’s demand, seems to be attempting to preclude Keller from making in-person records requests and reviewing the Vanguard’s records at either of their official locations – something provided for by IRS regulations.

Boylan also commanded, “Do not stalk Mr. Greenwald or any member of his family. If you encounter any one of them in public, do not attempt to approach or speak to them.” This demand is also problematic. It presupposes that the “stalking” accusation is true while providing no evidence whatsoever. It also falsely presumes that Keller is seeking or has sought personal contact with individuals outside of their roles as Vanguard officers and Board members. Boylan’s demand, if legitimate, would among other things seem to preclude Keller’s attendance at the supposedly public May 19th Vanguard fundraiser that the Vanguard previously claimed would be “hosted” by Mayor Brett Lee and that now simply “features” four City Council Members and advertises as “sponsors” Supervisor Jim Provenza, the entire DJUSD School Board, and others.

Keller stated “It was startling to see how hostile Greenwald was to both me personally and to the very idea of following the federal laws regarding public disclosures. Subsequently the Vanguard’s attorney ramped up the hostility further by making a number of reckless, false, and inflammatory accusations against me in a direct attempt to silence my public inquiry into the Vanguard’s activities, policies and finances.”

California-lawyer-boylanStopping public disclosure is an unusual role for Boylan. The Daily Journal and California Lawyer referred to Boylan as one of the “Sunshine Boys” for his role in taking on municipalities over Public Records Act requests and Brown Act violations. A Google search reveals several other similar “sunshine” cases he was involved in, including litigation against the City of Davis in 2012. He has also argued against even the appearance of quid pro quo arrangements involving politicians and funding, and in his run for City Council in 2016 is quoted in the Davis Enterprise in an article headlined “Boylan Urges Transparency in Run for Davis Council”: “…asking for those things [donations and endorsements] creates a quid pro quo.”

Boylan Responds

As of this writing, Vanguard officers/Board members Greenwald (CEO/Chairman), Cecilia Escamilla Greenwald (Secretary) and Robert Canning (CFO/Treasurer) have not replied to an email on Saturday morning, May 4th, asking for comment for this article series. Instead attorney Paul Boylan responded via email in the afternoon of May 4th “on behalf of David Greenwald.” Boylan notably did not directly identify himself as an attorney for the Vanguard, just as he has not in other public forum posts where he has discussed issues directly involving the Vanguard; Boylan repeatedly claimed that he is “not representing either the Vanguard or Mr. Greenwald here for any purpose,” in the comments section of a recent Davisite article regarding the Vanguard fundraiser event that Keller has been writing public articles on and attempting to find further information about.

Boylan makes several claims in his response email that are difficult to reconcile with what I witnessed. First, Boylan’s multiple and differing characterizations of the interaction at the Vanguard office on 5/3—including Keller’s actions and demeanor—do not accord with what I observed. He stated in one email to Keller, “Today you confronted Mr. Greenwald… at his place of business without prior warning.” Keller however provided me with the communications predating the visit that clearly notify the Vanguard that he would visit their offices if necessary, even though such a requirement does not exist under IRS rules and regulations.

Boylan also falsely claims “Mr. Greenwald did not refuse to provide the public with access to Vanguard records.”

Boylan goes on to state that “Mr. Keller insisted on his "public right" to examine the records he requested and demanded that Mr. Greenwald produce them for Mr. Keller's immediate inspection - another fact that Mr. Keller admits. Apparently, this is the pretense that Mr. Keller used to excuse his sudden appearance at Mr. Greenwald's place of business to demand an immediate inspection of the records he wants.”

Boylan then states “I am aware of no right for anyone to conduct a surprise inspection of these records at any 501(c)(3) corporation's place of business.” Boylan’s assertion is contrary to well-established and publicized IRS guidelines and rules in their webpage cited in Part I that reference the following statutory requirements in the U.S. Code:“[required documents] shall be made available by such organization for inspection during regular business hours by any individual at the principal office of such organization.” and “The request... must be made in person or in writing. If such request is made in person, such copy shall be provided immediately and, if made in writing, shall be provided within 30 days.”

Keller’s earlier communications clearly show that he stated that he would prefer to receive records via email if it could be done in a timely manner and that he would visit the office for the records only after this request was ignored.

Keller stated “I am deeply concerned with these violations of disclosure laws and principles of transparency, and the threats and accusations made by the Vanguard’s attorney intended to chill public speech and discourage public participation in public issues, including legitimate public and journalistic information requests. It is important for organizations like the Vanguard be accountable and to live up to their public and civic responsibilities. And this is especially true when such an organization has attracted broad community attention for ethical lapses in its involvement with our City Council.”

 

The Vanguard Attempts a Cover-Up

Greenwald’s refusal to share IRS records and allow an immediate public inspection of records as required under federal law is even more puzzling considering much of what Keller requested was subsequently posted on a website. In his email sent in the afternoon May 4th, Boylan claims, “The records that Mr. Keller requested that the IRS makes public record can be accessed at https://www.davisvanguard.org/about-us/irs-filings/.” It is very notable that Boylan’s email providing comment for this article series is the first mention by anyone of a place to find the IRS filings. If it had existed at the time of Keller’s emails, messages, or in-person request Greenwald could have easily directed Keller to the website.

On further investigation the link Boylan references for the IRS documents was actually set up on 5/4/2019 immediately before Boylan sent the email that afternoon as is indicated in the metadata for the webpage (see the screen shot). Additionally, several of the PDF files that were posted on that page also contain metadata indicating they were last modified mid-day on 5/4/2019 just a couple of hours before the email was sent. Looking the Vanguard website, for several days there was no link, but as of 5/7/2019 there was finally a link on the site to the new page that contains IRS documentation. It is clear the Vanguard has only posted this information after Keller requested it in-person, yet Keller was not notified of the secret webpage. Date published

Even if the Vanguard IRS records were publicly available on a website, IRS guidance states that this does not circumvent the requirement for nonprofits to also make these documents available for immediate public inspection on premises. In apparent violation of IRS rules, the Vanguard failed to produce them, denied a public inspection and indeed stated that the documents weren’t on the premises at all. As the IRS website states: “Making documents widely available satisfies the requirement to provide copies of the documents. This requirement is separate from the requirement to make the documents available for public inspection. There is no exception...from the requirement to make documents available for public inspection.”

Vanguard 2018.05.04_Cropped
It is yet to be determined whether the Vanguard will comply with IRS-mandated in-person inspection of documents in their offices. And further analysis will be required to determine what the Vanguard has just posted on the website to determine if it is now complying with non-profit disclosure laws to provide copies of certain documents. Part III in this series will offer analysis of the IRS documents the Vanguard has just posted on the davisvanguard.org. It should be noted that one piece of information that had been previously obscured and not made public is the current (as of April 2019) identities of the Vanguard’s Board of Directors – notably this is different than the Editorial Board published on the Vanguard website.. Another piece of information is the identity of a large donor who provided approximately 12% of the operating budget of the Vanguard last year.

 

Comments

Ron

Looking forward to the analysis of the documentation provided, including who is providing approximately 12% of the Vanguard's operating budget.

Thanks for the efforts to ensure that the Vanguard provides such information, online. (Seems strange that they didn't provide it prior to Rik's involvement.)

It doesn't take much imagination to envision the type of questions that might be asked of council members at the upcoming Vanguard fundraiser, if Rik attends it. (Assuming that the council responds to questions.)

Rik Keller

Ron O.: I plan to attend the Council meeting on Tuesday to ask more questions. However, they won’t be able to answer for the same reason that they can’t have a Q&A session at a private fundraiser (Brown Act).

Spoiler alert: in addition to the ethics, integrity, access, and pay-to-play problems of the fundraiser, there are some new questions raised by provisions in the California Nonprofit Integrity Act of 2004 (codified in CA Govt. Code) that I will bring up that would seem to warrant an investigation by the California Attorney General’s office.

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