Thursday, July 15, 2010

Should charities have a preferred status in this situation?

The New York Times reports that U.S. Wants Recipients to Return Nemazee’s Donations. Nemazee pleaded guilty to running a $300 million Ponzi scheme, and those who received the fruits of the scheme must return the money. Two charities argue that they didn't know about the fraud, and they already spent the money (even though they have plenty of cash on hand to make good), so they should be excused.

Private parties could make the same argument, but apparent lack the nerve to do so. I don't see why the charities should get special treatment. Stolen property doesn't stop being stolen because it is donated to a nonprofit.

But political campaigns do get special treatment, because they are temporary. The government has given up on collecting some $376,600 that was given to Edwards for President, Gephardt for President and the Gore-Lieberman Recount Committee, because those entities no longer exist.

UPDATE:  JLM properly notes in the comments that most of the affected charities have agreed to return the money, these two are the exception and not the rule.   I should have given credit where credit is due.

1 comment:

JLM said...

The Asia Society and Spence School (quibbling over $15,000!) are the exception, not the rule.

Give it up for Brown, Harvard, The Whitney Museum and the Council on Foreign Relations, all of whom who are returning their ill-gotten donations from Nemasee.