Lawsuit against Mary J. Blige’s Troubled Charity Raises the Issue: The Six Warnings Signs of an Irresponsible Charity
Charity Problems for Mary J. Blige
The charity founded by R&B singer Mary J. Blige, the Foundation for the Advancement of Women Now, has been sued for “losing” $250,000 by the lender, TD Bank. Apparently, the Foundation not only defaulted on the huge loan taken out from TD Bank, but it also has other management problems. According to a recent NY Post article:
- The Foundation has now been sued by musicians who were stiffed for their performances at a 2011 fundraising gala.
- The Foundation failed to properly file its proper federal tax return with the IRS.
- It cannot account for $60,000 of perfume sales.
- Is presently going a change in “management.”
Some of the big-dollar donors to Blige’s charity have been Wal-Mart, Gucci, and Jay-Z, who sat on the board for a period of time, along with Jada Pinkett Smith.
The news about Mary’s charity raises some interesting issues, including ones I have dealt with in doing legal investigations of charities-gone-awry. How can you tell if the charity you are giving to is responsible with donations, managed properly, and actually fulfilling the mission it publicizes to the outside word? Here are some warning signs.
Warning Sign #1 – Unusual Tax Records. This is rarely an issue for large, internationally-known charities, such as Goodwill, Salvation Army, or Red Cross. But with smaller charities, including private foundations, taking a peek at the charity’s tax returns and other IRS documents can be extremely illuminating. All public charities and private foundations are required by IRS laws to document their donations, distributions, and other activities, and make those records available to the public. Through the review of IRS documents, donors can gain easy access to the inner-workings of a charity, specifically to identify who actually runs the charity, its members, their contributions, its donations, and its distributions. These documents are publicly available, and can be accessed from various online sites. Unusual tax records, such as insufficient documentation, odd donations, or unusual distributions tend to indicate that a charity is not being managed properly, or has lost its focus. For example, in 2009, Mary J. Blige contributed $25,000 to her charity only, despite having album sale and performances totaling $43.5 million in 2008, according to the NY Post. The donation of such small amounts to a charity by the principle (and named) donor could indicate that the charity or its mission is not serious.
Warning Sign #2 – High Turnover in Board Members. The old saying is that charities are always in need of board members who can contribute the “Three T’s” – time, treasure, or talent. But the relationship is often synergistic – most professionals who serve as board members with prominent, successful charities derive considerable benefits from such affiliations. High turnover among board members, however, tends to be a bad sign. It could mean that board members who get into the charity find themselves looking for a way out. It could also be a sign that the charity operates in a way that does not induce directors to stay long-term. This has bad consequences. Continuity among board members help give charities long-term stability, direction, and vision.
Warning Sign #3 – Incomplete or Unavailable Accounting Records. A solid charity should always be able to give its donors, members, or officers a clear and accurate picture of its incoming donations, outgoing distributions, and expenses, including the percentage of its administrative costs vis-à-vis total donations, and what percentage of donations actually directly benefit the charity’s primary beneficiaries. Bad charities struggle with these basic accounting principles. Money goes “missing,” donations are not tracked properly, it is unclear where funds are going, and it is entirely uncertain whether the charity is even solvent. These are signs that the charity is either being negligently overseen by board members who are not paying attention, or that the charity lacks basic financial management.
Warning Sign #4 – Wasted Funds. Irresponsible charities not only have trouble managing money, they often squander valuable donations. Some classic examples involve the charity using significant funds for projects that are not really related to the purpose of the charity, holding extravagant events that seem disproportionate to the goals the charity seeks to accomplish, or spending funds without the knowledge and approval of board members. In some cases, charities can be managed so poorly that administrative costs end up eating into the bulk of donations. Ultimately, charities are expected to serve their intended beneficiaries. A charity that spends more simply to remain in operation than it does serving its intended beneficiaries could be suffering from irresponsible management.
Warning Sign #5 – Conflicts of Interest. Another nasty trait of an irresponsible charity is its participation in events, transactions, or dealings that pose an unmistakable conflict of interest. These situations usually involve an individual closely tied to the charity who engages in self-dealing or undertakes projects that satisfy the individual’s personal interests at the expense of the charity. For example, a president of a charity that runs his own personal side-business out of the charity’s office, using resources and utilities paid for by the charity’s donations, is engaging in self-dealing. A charity director who hires a family member that is paid wages from the charity’s donations could be engaging in a conflict of interest transaction. There are many other examples. Conflicts of interest among a charity’s leadership can be especially insidious because the individuals involved tend to take steps to conceal their activities, or understate the magnitude of the conflict of interest. This sort of behavior often manifests itself by the individual taking control over certain affairs, and then refusing to let anyone else become involved in them, or whitewashing procedures intended to disclose conflicts of interest.
Warning Sign #6 - Widespread Cluelessness. Finally, an irresponsible charity can usually be identified simply through speaking to its board members, staff, and officers. The governing body of a charity should not be clueless – they should know basic information about the charity, such as its purpose, mission, major projects, upcoming events, and the identities of all other board members, staff, and officers. Charities in which there is widespread cluelessness about these facts are often charities that have de-railed off track. Cluelessness can be a sign that the people involved with the charity are not paying attention or are left in the dark about the activities of the charity. This can be dangerous not only to the charity’s donors, but to the board members, employees, and officers themselves. Board members, officers, and employees that are either admittedly or unknowingly “asleep at the switch” expose themselves to liability, should something go wrong. For some charities, this could mean a lawsuit; for others situations in which significant funds are being funneled, laundered, or misused, criminal charges can result and jail sentences sought.
Mary J. Blige’s charity may be in some turmoil for the time being, but things could turn around. For individuals wishing to give funds, goods, or services to charities, there is no reason to be overly suspicious – there are many reputable charities throughout the country that are well-managed and effectively serve their beneficiaries. But keeping the warning signs above in mind could help identify irresponsible charities that have some growing yet to do.
ACLU Tries to Protect Constitutional Rights of Americans on FBI’s No-Fly List
The ACLU is fighting to get answers for Americans put on the FBI’s “No-Fly” list. Last Friday, the ACLU’s attorneys argued in the U.S. Appeals Court for the Ninth Circuit, representing 15 citizens and permanent residents, including four military veterans, who were banned by the FBI from flying to or from the US. They were never told why or how they ended up on the list, or how to get off the list.
Some of the victims are as follows:
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Ibraheim (Abe) Mashal, a U.S. citizen and veteran of the U.S. Marine Corps, is a traveling dog trainer and father of three. |
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Ayman Latif, a U.S. citizen and disabled Marine veteran. |
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Raymond Earl Knaeble, a U.S. citizen and U.S. Army veteran. |
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Steven Washburn, a U.S. citizen and U.S. Air Force veteran who was prevented from flying from Europe to the United States or Mexico; he eventually flew to Brazil, and from there to Mexico, where he was detained and finally escorted across the border by U.S. officials. |
One victim is Abe Mashal, a U.S. Marine Corps veteran and dog trainer. “I have no idea why I’m on the list,” said Mashal. “I should have the chance to clear my name and live my life normally. This has been a real hardship for me both personally and financially.” There is more to Mashal’s story, according to Wikipedia:
Abe Mashal, a 31-year-old Muslim and United States Marine Veteran, found himself on the No Fly List in April 2010 while attempting to board a plane out of Midway Airport. He was questioned by the TSA, FBI and Chicago Police at the airport and was told they had no clue why he was on the No Fly List. Once he arrived at home that day, two other FBI agents came to his home and used a Do Not Fly question-and-answer sheet to question him. They informed him they had no idea why he was on the No Fly List. In June 2010, those same two FBI agents summoned Mashal to a local hotel and invited him to a private room. They told him that he was in no trouble and the reason he ended up on the No Fly List was because of possibly sending emails to an American imam they may have been monitoring. They then informed him that if he would go undercover at various local mosques, they could get him off the No Fly List immediately, and he would be compensated for such actions. Mashal refused to answer any additional questions without a lawyer present and was told to leave the hotel. Mashal then contacted the ACLU and is now being represented in a class-action lawsuit filed against the TSA, FBI and DHS concerning the legality of the No Fly List and how people end up on it. Mashal feels as if he was blackmailed into becoming an informant by being placed on the No Fly List. Mashal has since appeared on ABC, NBC, PBS and Al Jazeera concerning his inclusion on the No Fly List. He has also written a book about his experience titled “No Spy No Fly.”
The stories of how some people have ended up on the No-Fly list are, in certain cases, stunning:
- Robert J. Johnson, a surgeon and a former lieutenant colonel in the U.S. Army, who ran as a Democrat against U.S. Representative John McHugh, a Republican, opposing the Iraq War, was put on the No-Fly list.
- U.S. Representative John Lewis (D-GA), widely known for his civil rights advocacy, has been stopped many times.
- Walter F. Murphy, Professor of Jurisprudence at Princeton, reported that he was on the Terrorist Watch list because, in September 2006, he had given a lecture at Princeton that was “highly critical of George Bush for his many violations of the constitution.”
- Jesselyn Radack, a former United States Department of Justice ethics adviser who argued that John Walker Lindh was entitled to an attorney, was placed on the No Fly List
- Nelson Mandela and other members of the African National Congress were on the list.
The No-Fly list was a creation of the Bush administration, following the 9/11 attacks. Immediately after 9/11, the N0-Fly list included 16 individuals. In the time that has passed after 9/11, the list has expanded to include over 1,000,000 names.
The ACLU’s argument is that the No-Fly list violates the constitutional rights of Americans by preventing them from traveling, but without giving them any due process or opportunity to challenge the blacklist.
Maryland Court Rules That Pitbulls Are “Inherently Dangerous,” Increasing Chances of Dog-Bite Lawsuits
Maryland courts have now ruled that pit bulls are “inherently vicious” animals. This means that if an owner’s pit bull bites, causing injury, the injured person does not have to prove that the animal was dangerous – it will be presumed.
This will make it much easier for injured individuals to succeed in lawsuits involving pit bull dog bites.
Samsung Inheritance Family Feud Begs the Question: Is Your Estate Plan In Place and Current?
The Samsung family has been locked in a bitter inheritance feud for the past several months. Photo courtesy of The Star.
The bitter family feud over the Samsung inheritance fortune that has been brewing in South Korea for the last several months should be a stinging reminder of how important it is for individuals to have end-of-life and estate-planning documents in place before death and before they grow too old or ill to do so.
Protecting Loved Ones from Tough Decisions. Planning for one’s own death is not easy. Individuals should look past the macabre elements of estate-planning, not only because death is an inevitable reality, but because it is absolutely required for the protection of loved ones. A death without a thoughtfully-prepared and frequently-revisited estate plan could leave loved ones guessing about how to handle one’s end-of-life issues, such as resuscitation and others raised by advanced health-care directives. Loved ones can be left with lasting trauma when forced to make life-altering decisions for their parents or relatives, assuming they can even reach an agreement. Estate-planning documents can provide necessary instruction and relieve loved ones from the burden of having to guess how to handle tough issues.
"Do It Yourself" Wills can create unintended problems.
Problems with “DIY” Wills. For the past few years, I have been involved in a number of lawsuits involving adult children and relatives in complex families, in which a step-parent is left with virtually all of the assets and control of the family finances after the passing of the biological parent. This is a problem that can be exacerbated by overly simplistic wills. Basic or “do it yourself” wills often do not consider the problems that exist when there are biological children of now-divorced spouses and “new-family” children produced by re-married spouses. On occasions, relationships between “first-family” children and a step-parent are sour at best, and when a step-parent is left in total control of the family’s finances simply because of an overly-simplistic will, there is every risk that the “first-family” children and “new-family” children are not dealt with equally. The “first-family” child often feels hurt by the biological parent’s perceived thoughtlessness, angry at the step-parent, and resentful of step-siblings. Most of the times, the family relationships are never the same. A current and thoughtfully-prepared will on the part of the deceased could have wholly avoided these unfortunate events.
Most Americans incorrectly believe they are too young to be worrying about estate-planning.
What’s the Hurry? Most Americans mistakenly believe they are too young to be worrying about end-of-life and estate-planning. This is terribly naïve. Accidents happen, children are born in and out of marriages, divorces result, and family relationships change over time. If an individual is involved in an accident that leaves him or her mentally impaired, it is usually too late. The law requires individuals be fully competent and capable of understanding the nature of his/her actions in taking estate-planning steps – otherwise, the documents could be deemed ineffective and void.
Who Should Be Planning? Any person who has a loved one needs to consider end-of-life and estate-planning issues. This includes not only the preparation of a will providing instructions on the distribution of one’s property, but also self-care instructions, such as advanced health care directives, living wills, and other documents. If substantial assets are involved, individuals should consider how best to place their assets in the hands of those to whom they wish those assets to be given. Sometimes, individuals simply want loved ones to “inherit” their belongings outright – but other times, they would prefer to leave gifts that help pay for college costs, medical expenses, a downpayment on their child’s future house, or wedding expenses – events that could happen many years after the individual’s death. There are countless ways of estate-planning in a manner that comports with one’s wishes.
Avoidance Increases the Risks. Dealing with aging family members and one’s own impending mortality is not easy – it is arguably the toughest issue that individuals face in life. But ignoring the issues simply because they are unpleasant to consider is dangerous – accidents can happen at any time and being left deceased or too impaired to prepare an estate plan can have lasting, irrevocable, and entirely-avoidable consequences for loved ones. It doesn’t take the $613 million at issue in the Samsung family lawsuit for bitter disputes to arise between family members.
Tupac Rising: Who Owns the Intellectual Property Rights to a Dead Musician’s Ghost and Hologram Performance?
The hologram performance of deceased 90s rapper Tupac Shakur at the Coachella music festival last weekend dropped jaws, but also raised the eyebrows of many in the industry, spurring a hot debate about the moral, legal, and intellectual property issues involved with bringing a dead musician back to life for a “digital” performance. In the few days that have passed since then, sparks of discussion have arisen over the possibility of bringing back to stage some the nation’s most famous long-departed musicians – Elvis, Jimi Hendrix, Freddie Mercury, John Lennon, Jerry Garcia, Joey Ramone, and many others.
Shakur’s hologram performance was commissioned by his former colleague Andre (Dr. Dre) Young, from digital producer Digital Domain Media Group (made famous through its work on the virtual version of Brad Pitt in “The Curious Case of Benjamin Button”) and San Diego-based AV Concepts. It was the first-ever live performance of a deceased entertainer.
According to reports, the hologram was stunningly realistic, down to the details of Shakur’s movements, skin-art, boots, clothing, and other details. In fact, the performance created such a buzz that it has been announced the hologram of Virtual Tupac will now be going on tour.
A ph oto of the Tupac hologram, courtesy of Spinner.com
The most dazzling element of Shakur’s post-mortem performance was that it was not borrowed from footage of Shakur filmed during his life, but rather, entirely fabricated and produced specifically for the Coachella music festival. Virtual Tupac performed in front of the audience, addressed them, danced, and pranced around like a living ghost, interacting with the crowd as well as other entertainers. At the beginning of the performance, Virtual Tupac yelled, “What the f— is up Coachella?” even though Coachella was not even founded until 3 years after his death. In the wake of the performance, some commentators expressed uneasiness that words and actions never said or taken by Shakur could be scripted by others and put into the deceased entertainer’s mouth.
Legally, the digital resurrection of a deceased entertainer brings up a plethora of thorny issues, including the appropriation of the entertainer’s publicity, intellectual property rights to the digital software/video that created the performance, rights to the performance itself, and rights to other works depicting the performance, including footage, video clips, sound clips, and other forms of social media – in addition to the huge issue over royalties and who is entitled to them. In this case, it appears that Afeni Shakur, Shakur’s mother and the legal representative for Shakur’s estate approved (and was in fact “thrilled with“) the performance of her dead son, so concerns about the unauthorized uses of Shakur’s image and likeness may be moot. It is unclear who the copyrightholder of the Shakur performance is. Now-defunct Death Row Records, one of Shakur’s former record companies, is already complaining that Shakur’s performance was not sufficiently attributed to Death Row.
But the digital performance also raises significant issues for living entertainers. When Shakur passed away in 1996, the digital revolution had just begun. There would have been no way for Shakur to have known that 15 years later, in 2012, his “ghost” would be brought back to life for a live digital performance. Frequently, entertainers, who already have very little leverage when negotiating with big record companies, are asked to sign broad assignment of their rights. The broad release of rights allows record companies and their representatives to use, re-use, and manipulate nearly every conceivable likeness, depiction, and work of the artist, in all venues and channels, irrevocably, in perpetuity, and exclusively. Many artists and entertainers are often unaware of how much of their rights they assign over to record companies when they sign a deal.
Should artists and talent be made aware that the release of their rights could extend to new mediums of expression that do not exist today, but could be made possible through advances in technology? Certainly, it’s very possible that artists would find the new forms of expression unsavory. For example, would a 55-year old Justin Bieber be comfortable with a 15-year old digital hologram of himself waking young schoolgirls from sleep each morning and kissing them goodnight?
Then there is the most important issue – the integrity of the deceased artist himself. Not all deceased musicians end up with responsible representatives managing their affairs in the afterlife. If it becomes profitable for the legal representative of a deceased entertainer to approve new projects involving the entertainer, there could be virtual performances and other activities attributed to the entertainer that the enterainer may never have agreed to in his or her lifetime. Imagine Johnny Cash promoting a commercial for Starbucks. Who should be charged with maintaining the integrity of a deceased entertainer’s unspoken wishes? Unfortunately, because technological growth so exceedingly outpaces legal rules, there are no easy answers to these questions.
While it is true that individuals can leave instructions in their wills and other estate planning documents, the representatives entrusted with carrying out those wishes are sued all the time for failing to uphold them. But unless someone takes that legal representative to court for failing to honor the deceased’s wishes, there is no one to stop them for doing something the deceased would not have agreed to.
Further, although the law provides for the protection of unborn voices by permitting for the appointment of guardians who must act in the best interests of unborn children, the dead are sadly left on their own. Unfortunately, performing in front of a packed crowed at Coachella does not sound like resting in peace.
Blagojevich, Muppets, and Goldman Sachs: How Rod’s Incarceration Magnifies The Deep Flaws in America’s Justice System
Rod Blagojevich
A few days ago, Rod Blagovich was taken into custody for incarceration in the Englewood, Colorado federal correctional institution for a 14-year sentence, closing the chapter on the ongoing saga involving the former Illinois governor. The crimes for which he was convicted? Bribery and political corruption. Taking advantage of his political office, for self-aggrandizement and for profit, at the expense of his constituents. Around the same time, an open letter was published by Goldman Sachs departee Greg Smith in the New York Times, accusing Goldman Sachs of corruption and “losing its moral compass,” which made ripples throughout Wall Street. According to Smith, over the course of his career, Goldman Sachs changed from being a respectable institution into one he could no longer bear to be affiliated with. Smith accused Goldman Sachs nurturing a culture that promoted greed and gleefully ripping off clients. The path to success at Goldman Sachs, said Smith, usually involved persuading gullible clients to buy worthless securities, making financial decisions based on how much money it would make Goldman Sachs (not the clients), and selling cooked-up financial products to clients that did not align with their financial goals. Perhaps the most telling portion of the letter was Smith’s admission that behind closed doors, Goldman Sachs associates (and managing directors) called their clients “muppets” - wood-headed inanimate playthings whose every moves would be controlled by the puppeteers, Goldman Sachs. Continue reading
Just a Reminder: No Using Names and Photos For Publicity Without Consent
You would think that it would be clear by now – it is not permissible (nor legal) to use celebrities’ names, pictures or likenesses to sell your products or services, unless they consent. Last week, there were two fresh “Right of Publicity” allegations that surfaced:
Photo of Billboard, Courtesy of TMZ
In the first, Hollywood gossip website TMZ reported that a local Mexicali plastic surgeon, Victor Ramirez, decided to promote his services by putting up a billboard of Kim Kardashian wearing a bikini, without her knowledge or approval.
Earlier in the week, True Blood star (Sam Merlotte’s shape-shifter girlfriend) and “The L Word” actress Janina Gavankar sued a LA clothing company, claiming that the company used her image to promote its plus-sized clothing line, without her permission.
All of this is, of course, entirely unauthorized if the actresses did not agree to have their names and likenesses promoted in this manner. In California, individual privacy rights include the “right of publicity,” and makes it illegal for companies or individuals to use the names or likenesses of others, without their permission.
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Janina Gavankar, as "Luna Garza" in True Blood
To be successful, claimants must generally demonstrate that there was a use, for profit, of the individual’s identity, without consent, that resulted in injury to the individual. There are several exceptions, such as the use of or likeness to report news-worthy events, or a use that is so “transformative” that its primary value is not derived from the celebrity’s fame.
The Plastic Surgery billboard does not appear to make the cut (no pun intended). Although TMZ reported that KK was considering whether to bring suit, the big issue is probably going to be whether it is worth the time to pursue Dr. Ramirez thorugh the Mexican court system.
For Gavankar, on the other hand, it may be too early to tell. Her lawsuit against Jasmine USA and its CEO, David Youshouafar, is underway LA Superior Court for now, and it will be seen whether the allegations are fact or fiction.
Apple iPhone 4 Settlement: A Roadmap For Consumers
For purchasers of the original Apple iPhone 4 who survived “Antenna-gate,” there is good news: Apple has agreed to settle the class action brought over the poor antenna reception of the iPhone 4 and will be offering consumers a $15 cash payment or a free bumper/case to rectify the problem. Affected consumers will have four (4) months to file claims under the settlement to receive their cash payment , once Notice has been provided.
Sandra Bullock Sues Watchmaker Over Unauthorized Use of Her Identity
In today’s news, Sandra Bullock is suing watchmaker ToyWatch and several others for using her name and photograph to advertise their watches without seeking her permission. A visit to the Christine Jewellers’ website does seem to display a picture of Bullock with a “ToyWatch” that she supposedly “wore in her recent movie Blind Side.”
- Snapshot of Sandra Bullock from Christine Jewellers’ Website
In California, individual privacy rights include the “right of publicity,” which provides individuals with an avenue of recovery if their names or likenesses are misappropriated by others.
To be successful, claimants must generally demonstrate that there was a use, for profit, of the individual’s identity, without consent, that resulted in injury to the individual. There are several exceptions, such as the use of or likeness to report news-worthy events, or a use that is so “transformative” that its primary value is not derived from the celebrity’s fame.
However, those defenses may not be vailable to ToyWatch – after all, Sanda Bullock seems to be displayed in a number of sites on the internet and used to promote the ToyWatch “Plasteramic” Collection.
SOPA Post-Mortem: The Independent Autopsy
The much-maligned Stop Online Privacy Act (SOPA) and its senatorial sibling, the Protect IP Act (PIPA) have, at least for now, met an abrupt demise. The huge public protests by internet trailblazonaires and activists, accompanied by “blackouts” staged by Google, Wikipedia, and other major sites, turned the tides against lawmakers almost overnight. As some reports noted, the rare display of public participation took lawmakers by surprise, and once anti-SOPA sentiments rippled through the country, the Congressional representatives who originally introduced the bill found themselves alone, without support, and abandoned the bill. By last Thursday, SOPA and PIPA were declared DOA, well in advance of the vote that was previously scheduled to take place today. In the end, the death of SOPA/PIPA was by some reports attributed to the power of public participation in the democratic process. These idealistic commentaries, however, may be ignoring the reality that the fight over SOPA/PIPA was very much a brawl between powerful corporate giants with strong conflicting interests. Caught in the fray, Americans would be wise to mute the rhetoric advanced by both sides when the next incarnation of SOPA/PIPA arises, and take a careful look at the true motivations fueling the debate, as well as the practical effects that stronger copyright enforcement laws would actually have for ordinary netizens.
Attorney Rabeh M. A. Soofi
Phone: (213) 632-9390
Fax: (213) 986-3485
Email: rsoofi@sb-lc.com
Twitter: @rabehsoofi