POST UPDATED 7.16.10: See Maureen Halahan’s response at end of post

The interview excerpt above may also be downloaded here.

The Orange County Partnership is a 501(c)6 business league class of nonprofit.  Headquartered in Goshen, NY, OCP provides marketing services for Orange County’s economic development initiatives, including the efforts of the Orange County Industrial Development Agency.

On Wednesday, July 13, I interviewed Maureen Halahan, who is president and CEO of the OCP.  (Video of the full interview is at the end of this post.)

Ms. Halahan briefly described the history of the OCP, and why its creator, former county executive Louis Heimbach, wanted the OCP to be separate from the government in an effort to insulate it from political influence.  She emphasized that it was important to the OCP to not be political.

Which came as a surprise to me, as the OCP had made several campaign contributions over the years, including to a member of its very own board, County Executive Edward Diana.  While the amounts may be modest, arguably a contribution of any amount is a symbolic endorsement of one candidate over any others, especially when the state records disclose no contributions in kind for Diana’s opponents.

According to the New York State Board of Elections, the Orange County Partnership contributed to County Executive Edward Diana’s campaign fund in 2006 and 2008, as well as Citizens for Mills in 2004:

Date                         Campaign fund                      Amount         Campaign contributor name*
August 28, 2008      Citizens for Edward Diana       $100.           Orange County Econ Develop
June 18, 2006          Citizens for Edward Diana        $50.            Orange County Economic Development
December 9, 2004   Citzens for Mills                       $200.           Orange County Economic Development Fund

*The Orange County Economic Development Corporation does business as the Orange County Partnership.

Ms. Halahan had not provided any additional information on these expenditures other than what she states in the video (excerpted above, or in full below) as of Wednesday evening, July 14.

UPDATE BELOW: Ms. Halahan’s July 16 response at end of post

Not illegal, but is it appropriate?

While campaign contributions are taboo for 501(c)3 nonprofits, 501(c)6 nonprofits such as the OCP have more flexible rules regarding campaign contributions and political activities.

However, several considerations raise questions as to whether this particular political expression was appropriate.  The OCP is substantially funded by Orange County, with their 2008 annual report listing $200,000 from Orange County and $225,000 from the Orange County Industrial Development Agency.  So a substantial contribution from Orange County taxpayers supports this “lean and mean” marketing firm (to borrow Ms. Halahan’s self description.)  But the OCP is not any contractor — it was specifically created to serve as “external marketing agency for the economic and employment development of Orange County, New York” (quoting from the 2008EZ 990 form on page 2, part III, line 28.)

Should the “designated marketer” for Orange County advocate for particular candidates?

And then there’s the question of Mr. Diana serving as a board member when the contributions were made.   The March 2, 2008 internet archive stored version of the OCP home page indicates Hon. Edward Diana was a member of the OCP board at that time; the current page lists Diana as well.  He is also listed as a board member on June 14, 2006, just four days before the $50 contribution to his fund by OCP.

Charities Bureau and IRS forms raise questions on grants

The OCP also has some inconsistencies in the way in which it has been filing their required forms with the Charities Bureau of the New York State Office of the Attorney General, specifically form CHAR500.

On the CHAR500 form for 2008, question 4, Article 7-A Schedules, OCP checks the “No” box to question b., “Did the organization receive government contributions (grants)?”

On the 2007 and 2006 CHAR500 forms, this box is checked neither yes nor no.  For 2007 and 2006, however, no Schedule 4b is included, so one must presume the desired implied answer is “No.”

However, the 2008EZ 990 form indicates on page 2, part III, line 28, that OCP received Grants of $425,000, as “external marketing agency for the economic and employment development of Orange County, New York.”

On page 1, Part I, line 2, $425,000 is listed as “Program service revenue including government fees and contracts,” while line 1, “Contributions, gifts, grants, and similar amounts received,” lists only $84,300.

The 2007 990 lists $400,000 as “program service revenue,” not grants, as does the 2006 990.

The OCP Financial Statements (downloaded from the Charities bureau site) dated December 31, 2008, indicate that for 2008, $200,000 was contributed by Orange County and $225,000 was contributed by the Orange County IDA.  See page 5.  This total of $425,000 is described as “Unrestricted Net Assets–Governmental Support.”

When I asked Ms. Halahan yesterday about whether the county funds were grants or contracts, she explained that OCP has contracts with both the county and the county IDA for specific services.

The Attorney General’s Charities Bureau was unable to provide clarification on this issue.

Full video of the interview is below, or may be downloaded here.

UPDATE 7.16.10: Maureen Halahan Responds

In a voicemail left Friday evening, Orange County Partnership President and CEO Maureen Halahan left the following message:

I am calling with some information.  My bookkeeper’s on vacation, but she signed on electronically.  And the $200 check that was written to Howard Mills back in 2004 was a reimbursement to him for tickets that he purchased for our annual dinner, to attend our annual dinner.  And we then, apparently in our notes he was then offered two seats from a business colleague, or something, and we reimbursed him that money.

So the $200 was money that we reimbursed him, not a campaign contribution.

The other $50 and $100 were for tickets to have a meal at one of, one was a $50 meal ticket for Ed Diana’s event for a staff member, and the other one was, I believe, and we don’t have it in the notes, but I imagine another staff or another team member of my partnership, my partnership team.

So that’s what the other two were for.