SPLC’s Sketchy Financial Dealings
SPLC’s Sketchy Financial Dealings
Let’s make one thing clear up front: there’s nothing illegal about using offshore bank accounts to store and move assets. Numerous people have offshore accounts – some in an effort to diversify their assets, some use the accounts for greater privacy, and some want to ensure their assets are stored in a stable jurisdiction. And yes, some of these places are tax havens as well. Hell, I’m all about ensuring maximum privacy while paying as little in taxes as possible! At the same time, offshore banking has often been associated with money laundering and movement of corrupt assets. For example, Latvia has long been viewed as a conduit for corrupt Russian asset movement, and the Organized Crime and Corruption Reporting project has identified Latvia’s capital Riga as “a thriving offshore banking sector that has helped criminals and corrupt officials to siphon stolen money from the former Soviet countries.” But ultimately, there’s nothing illegal about storing your money outside the jurisdiction where you live.
That said, the Southern Poverty Law Center’s business dealings are questionable, to say the least. The hate group “watchdog” – which is little more than an extremist left attack organization whose mission is to smear anyone politically more right than Lenin, and which is in the process of being sued for defamation by one of the victims of its libel – apparently has transferred hundreds of millions of dollars to offshore entities in the Cayman Islands and other offshore jurisdictions. Joe Schoffstall at the Washington Free Beacon examined some of the tax documents the SPLC has filed in the last few years, and found that not only has the non-profit organization dumped millions of dollars into offshore accounts in the Cayman Islands – a known hub used by hedge funds to store assets, including New York-based private equity financial firm Tiger Global Management LLC, which SPLC lists as its agent.
The SPLC’s Form 926, a Return by a U.S. Transferor of Property to a Foreign Corporation, from 2014 shows additional cash transactions that the nonprofit had sent to offshore funds.
The SPLC reported a $102,007 cash transfer on Dec. 24, 2014 to BPV-III Cayman X Limited, a foreign entity located in the Cayman Islands. The group then sent $157,574 in cash to BPV-III Cayman XI Limited on Dec. 31, 2014, an entity that lists the same PO Box address in Grand Cayman as the previous transfer.
The nonprofit pushed millions more into offshore funds at the beginning of 2015.
On March 1, 2015, SPLC sent $2,200,000 to an entity incorporated in Canana [sic.]Bay, Cayman Islands, according to Securities and Exchange Commission (SEC) records and run by a firm firm based in Greenwich, Ct. Another $2,200,000 cash transfer was made on the same day to another fund whose business is located at the same address as the previous fund in the Cayman Islands, according to SEC records.
No information is contained on its interests in Bermuda on the 2014 forms. SPLC’s financial stakes in the British Virgin Islands were not acknowledged until its 2015 tax form.
BPV-III Cayman XI Limited lists its address on the form as a PO Box in Ugland House, South Church Street in Grand Cayman. Ugland House goes to great lengths on its website to explain away why roughly 19,000 companies are registered in the relatively small building. The building was made famous in 2009 by then-President Barack Obama, who said the site is “either this is the largest building in the world or the largest tax scam in the world.”
In Foreign Policy magazine in January 2012, Joshua Keating wrote that in reality Ugland is neither but, “… the building makes a mockery of the U.S. tax system.”
Keating noted that the Caymans have no direct taxes, it only costs some $600 to set up a company address there – while the company does business around the world — and that “the Caymans also allow U.S. non-profit entities like pension funds and university endowments to invest in hedge funds without paying the ‘unrelated business income tax,’ which could be as high as 35 percent if those funds were based in the United States.” He also cited “concerns that the complexity and lack of transparency in Cayman Islands transactions can make tax evasion and money laundering easier, though,” he adds, “… the vast majority of Cayman Islands transactions are entirely legal.” This is what the Internal Revenue Service euphemistically described to the GAO as “the Cayman Islands’ reputation for regulatory sophistication.”
And it’s true that a lot of business being done there is likely completely legal. That said, having done a search on “BPV-III Cayman X Limited,” the company to which SLPC sent hundreds of thousands of dollars, I haven’t seen any record of this company, no officers listed, nothing except the address in a building that hosts a huge number of what appear to be shell companies in a jurisdiction well known for the ease with which you can set up a shell company. This is a company that appears to have little or no indication of business activity on the web or on commercial databases.
Color me suspicious.
High value round figure transaction? Check.
To a company that appears to have no legitimate business purpose? Check
It looks like an attorney where funds move rapidly through an Interest on Lawyer Trust (IOLTA) account, possibly off-shore or for the purchase of property? Check.
Looking like an accountant or financial advisor who took SPLC’s money and quickly moved it to another third party account (especially given SPLC’s negative press over the past few years)? Check.
I don’t know about you, but it certainly smells of illicit finance to me, and with several billionaires and their companies, such as JPMC, Apple, and George Clooney, having recently pledged millions to the SPLC in the wake of the violence in Charlottesville (way to take advantage of a situation, your opportunistic swine!), that certainly strikes me as something that’s about to get worse.
So while the SPLC claims it’s fighting bigotry, poverty, injustice, *insert leftist cause here*, it appears what it’s doing is hiding the millions gullible leftists send it to attack political opponents in offshore accounts.
SPLC is a 501(c)(3), so it’s tax-exempt in the United States. It’s interesting to me that it would need to move assets to a known tax haven. And several tax experts agree.
“I’ve never known a US-based nonprofit dealing in human rights or social services to have any foreign bank accounts,” said Amy Sterling Casil, CEO of Pacific Human Capital, a California-based nonprofit consulting firm. “My impression based on prior interactions is that they have a small, modestly paid staff, and were regarded by most in the industry as frugal and reliable. I am stunned to learn of transfers of millions to offshore bank accounts. It is a huge red flag and would have been completely unacceptable to any wealthy, responsible, experienced board member who was committed to a charitable mission who I ever worked with.”
“It is unethical for any US-based charity to invest large sums of money overseas,” said Casil. “I know of no legitimate reason for any US-based nonprofit to put money in overseas, unregulated bank accounts.”
But hey, it’s the left’s pet attack dog, so we’re not supposed to ask too many questions, right?