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So-called cancer charities ripping off the public show a need for oversight

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Published on: Wednesday, June 26, 2013

By Margie Burns

Aside from heinous crime, payday lenders loan-shark desperate people, lawyers cheat their own clients, and foreclosure- and mortgage-rescue rip offs are all lows in human behavior. These all are reminders that Dante devoted circles in the inferno to white-collar crime, fraud and abuse for good and sufficient reason.

Cancer organizations also rip off the public. This column follows the recent CNN news reports played on June 13 and June 14.

To recap: Three cancer charities displayed an egregious disparity between money taken in and money going to cancer patients. The three organizations are Cancer Fund of America Inc., in Knoxville, Tenn.; The Breast Cancer Society Inc., Mesa, Ariz.; and The Children’s Cancer Fund of America, also of Knoxville.

The head of Cancer Fund of America is James Reynolds. The Breast Cancer Society Inc. is run by his son, James Reynolds Jr. The Children’s Cancer Fund of America is run by james Reynolds’s ex-wife, Rose Perkins. The public relations officer at The Breast Cancer Society is James Reynolds Jr.’s wife.

All the officers named are paid six-figure salaries, while only 2 percent of their gross receipts actually benefit cancer patients. The numbers come from the charities' own tax filings. A total of almost $1 million each year goes to the family members who are officers in the three organizations. Two percent of their total haul, two cents on the dollar, goes to recipients.

Much of that is reported as “gifts in kind,” a kind of donation often identified by state attorneys general as questionable. Often times, “gifts in kind” are used goods sloppily dumped on recipients, sometimes without much attention to details like usefulness or condition.

CNN also reported some of the recipients had not heard of these cancer charities.

It may be noted that these particular organizations are headquartered in states — Tennessee and Arizona — that tend to have a red-state attitude about catching corporate bad guys. None of the three has offices in Maryland, nor do their telemarketers. Some of the organizations' main telemarketers, however, do have locations just across the Potomac, or down the Chesapeake Bay, in Virginia. Bee LC is located in Virginia, and it raised $119,179 for Cancer Fund of America Inc in New York in 2012. Corporations for Character LC, also with a Virginia presence, raised $542,225.49 for the same fund in 2012. The Resident Agent for Corporations for Character is Corporate Creations Network LLC, of Virginia Beach. America’s Worst Charities' website reports that Bee LC has been disciplined five times in three states.

The biggest telemarketer for these cancer charities is Associated Community Services. Associated Community Services donated about $5,800 to the American Teleservices Association PAC in 2008-2010. It is listed as “purged” in the Virginia State Corporation Commission rolls. The telemarketer has had 11 disciplinary actions recorded in seven states in more than eight years. It also raised $2.6 million for Cancer Fund of America Inc, another $6.3 million for the Children’s Cancer Fund of America and $11.6 million for Breast Cancer Society Inc, in New York in 2012.

These valuable numbers come from “Pennies for Charity: Where Your Money Goes,” the annual report on telemarketers published by the New York State Attorney General’s office. We could use a report like that in Maryland.

People intent on shrinking government have overlooked the effect on child leukemia patients when bogus charities siphon off genuine contributions.

Watchdogs like Charity Watch (the American Institute of Philanthropy) and Charity Navigator are helpful, but they can’t issue a subpoena.

Along the same lines, it might be nice if resident agents did something besides sign a form indicating filing compliance. Sometimes corporation resident agents seem to be another version of the robo-signers employed by the mortgage-generating industry, adding another layer of paper trail but shedding no illumination and handling no oversight.

Margie Burns is a contributing columnist to The Sentinel. She resides in Cheverly.

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