Carolina Journal News Reports
RALEIGH ó While State Auditor Ralph Campbell's report provides a review of how the John A. Hyman Foundation operated, there are still several issues related to foundation chairman and U.S. Rep. Frank Ballance that have not been resolved. They include:
Internal Revenue Service reporting. The foundation failed to file required IRS forms. Tax-exempt nonprofits that have annual receipts greater than $25,000 are required to annually file Form 990 with the IRS. Information contained on the form includes the names and salaries of officers, the source of funds, and expenditures by category. Copies of the past three years are to be made available to the public on demand, at the organizationís place of business during normal business hours.
According to IRS regulations, a tax-exempt organization that fails to file a required return is subject to a penalty of $20 a day for each day the failure continues. The maximum penalty for any one return is the lesser of $10,000 or 5 percent of the organizationís gross receipts for the year. In late August, the foundation released forms for 1994 to 1997. By late October, the foundation had not released forms for 1998 to 2002.
Federal Election Commission. Two pastors with close ties to Ballance are associated with questionable contributions to his 2002 campaign for Congress.
State Sen. Robert L. Holloman, an Ahoskie Democrat and pastor, exceeded contribution limits by $500. The contribution was given in the name of Robert Holloman, Jr., a person Holloman admits does not exist. Ballance refunded the contribution after it was exposed by Carolina Journal.
Pastor Eddie W. Lawrence and Cathy Alston-Kearny, parents of Martin W. Lawrence, have failed to explain whether two contributions, totaling $1,300, from 15-year-old Martin to Ballance were actually made by their son. Lawrence is pastor of Ballanceís church and is director of the Hyman Foundation.
Federal law prohibits contributions in the name of another person, knowingly allowing your name to be used for that purpose, or knowingly accepting such a contribution. In September, Halifax County Republican Chairman Geoff Hardee filed a complaint with the FEC.
Alice Eason Ballance Foundation. Halifax Community College President Ted Gasper used state government resources to raise money for Ballanceís congressional campaign, minutes of meetings show.
Documents also show that Gasper and others planned to funnel corporate contributions though the Alice Eason Ballance Education and Justice Foundation, another nonprofit organization that Ballance set up in October 2001. Corporate contributions to political campaigns are illegal. State Community College System President Martin Lancaster referred the matter to the SBI.
A report filed recently with the Federal Election Commission also shows that in August 2003 Ballance donated $3,000 from his political campaign to that foundation. An FEC spokesman told CJ that the commissionís regulations permit expenditures for charitable organizations, but that a charitable organization cannot convert the money for prohibited expenditures.
Determining the legality of the contribution is dependent on following the expenditures of the foundation.
Foundationís lease of state property. Ballance helped the foundation obtain a lease on a 35-acre former prison site. The agreement was approved by the Joint Legislative Commission on Government Operations Committee on Nov. 15, 2000. Ballance served on the committee, attended the meeting, but abstained from voting on the matter.
The five-year lease for $1 per year has an option for the foundation to renew for another five years. It is dated May 25, 2001, and signed by Gov. Mike Easley and by Hyman Foundation Vice President Helen Ophelia of Rich Square. The foundation has yet to use the property
Files in the State Property Office show that property officials frequently contacted Ballance about the lease.
In January 2000, Eddie Lawrence wrote Correction Secretary Theodis Beck asking for the property. In October 2000, Beck recommended that the property be turned over to the foundation.
Beck did not respond to phone calls from CJ requesting comment on his original decision to lease the property to the foundation.
State Property Office Director Joe Henderson told CJ that his office will review the lease arrangement because the foundation is not using the property and apparently has no funding.
Carrington is associate publisher at Carolina Journal.