Tax filings show CAPSLO does not report sales of donated goods

May 6, 2013
Dee Torres

Dee Torres

By DANIEL BLACKBURN, KAREN VELIE and JOSH FRIEDMAN

They’re small items: razors, socks, sometimes tampons. Community Action Partners of San Luis Obispo (CAPSLO) sells those goods, donated by local and national businesses, to the homeless people it serves, current and former employees say. But CAPSLO hasn’t accounted for those sales, either internally, or on its federal tax returns.

CAPSLO and a fund raising affiliate, Friends of the Prado Day Center, report on tax returns that the nonprofits do not sell donated items. And while nonprofits are required to collect sales tax on sold items, sources say and documents show that CAPSLO’s homeless services does not make the collections.

It is the latest question to be raised about reporting requirements for CAPSLO and its supporting nonprofits under California law.

Friends of Prado seeks to raise money to help pay for CAPSLO’s homeless services employees, according to its 2010 tax return. That return was obtained following numerous requests by CalCoastNews to view the document and the nonprofit’s mission statement. Friends of Prado refused to provide the nonprofit’s mission statement for more than a month even though federal tax rules require that the statement be available for review by anyone.

Friends of Prado attorney Ty Green, with Adamski Moroski Madden Cumberland & Green, sent an email saying other than the tax forms the nonprofit is required by law to provide to the public, Friends of Prado would not be opening its books to the public.

The charitable trust doctrine requires that a gift to a charitable organization must only be used for the expressly declared charitable purposes. The restriction applies regardless of whether the donor expressly imposed the restriction or the organizations transfers those assets or dissolves.

But Friends of Prado does not list on its tax return expenses for items purchased for children through the Dambly Children’s Fund, a fundraising arm of the nonprofit operated by local philanthropist Burke Dambly and CAPSLO Homeless Services Director Dee Torres that claims to have one purpose, to buy clothing and school supplies for homeless children. It works under Friends of Prado’s nonprofit tax exemption.

Friends of Prado Board members have not responded to questions about accounting for donated gift cards and money to the Dambly Children’s Fund and instead asked that all questions be forwarded to their attorney — who said no questions would be answered.

Shortly before publication of this report, Dambly agreed to provide an accounting of the Children’s Fund to CalCoastNews. He also said he plans to shift the fund into a foundation “sometime this year.”

In 2008, CAPSLO commissioned a “written assessment” of homeless services conducted by an independent consulting firm. The finished document, according to the 2009 San Luis Obispo County Grand Jury, “described serious deficiencies in each of three homeless services programs: case management; the Prado Day Center; and the Maxine Lewis Shelter” — for all practical purposes, the entire homeless program under Torres.

“The assessment was not distributed externally, not to CAPSLO’s governing board, nor to county or city government officials who provide substantial grants to the nonprofit for homeless services,” the Grand Jury reported.

In the minutes of the Oct. 28, 2010, CAPSLO Board of Directors meeting, former board member Jim Patterson asked why in-kind services were not reported in the audit. CAPSLO’s Finance Director Joan Limov said she had spoken to the Friends of Prado Board who agreed to begin recording in-kind donations as required by law. However, both Friends of Prado and CAPSLO do not account for donated items on their tax returns.

A CalCoastNews series has examined questionable case management practices, a lack of fiscal accountability, and other administrative practices of Community Action Partners of San Luis Obispo and its homeless assistance program.

Now, prominent local attorney and longtime homeless services advocate James Duenow is stepping up his call for in-depth performance and forensic audits of CAPSLO.

A probe “absolutely needs to be done by an independent auditor, a specialist,” Duenow said.

As part of its homeless program, CAPSLO operates two facilities providing aid to needy individuals – the Maxine Lewis Homeless Shelter and the Prado Day Center, the latter being the city’s only day service center.

CAPSLO regularly highlights its alleged success stories; tales that several former employees say are often constructed and accompanied with staged photos. Several homeless sources say they have agreed to be photographed in exchange for gift cards.

In a 2008 email from Lillian Judd, CAPSLO’s director of planning and development, to CAPSLO’s David Lichti, Judd asks Lichti to take some pictures to accompany photos of a man with his children for a homeless services’ success story.

“Perhaps you will find a place that has trash, toilet paper and such strewn around to more accurately display the stark reality of living outdoors,” Judd says in the email. “Or, if necessary, stage it for the photo and then clean it up. The other photo could be a hand pushing open a door that gives a look into a comfy apartment. You are setting the stage to deliver the message that no one has to live like this, and now he is not.”

The wealthy nonprofit has resisted an in-depth, outside audit of its spending and accounting practices despite testimony of numerous former and current employees, clients, donors and others who have alleged financial improprieties. Some of those assertions center around Torres, who reportedly fails to routinely properly account for certain kinds of cash, in-kind and product donations, and has been accused by former employees and ex-boyfriends of appropriating homeless resources for her personal use.

CAPSLO’s public response to the allegations to date has been to hire a prominent international law firm to threaten CalCoastNews sources and to launch a marketing campaign complete with newspaper inserts and promotion videos.

CAPSLO’s moves were not well thought out, Duenow said.

“The biggest mistake they made was to hire that lawyer, and the dumbest thing he did was to serve that letter on people. But what really bothers me,” Duenow said, “is that when this lawyer was hired, he had to have been given instruction from them. They are using taxpayers’ money to hire these guys, and this is a big law firm with offices all over the world. They don’t work cheap.”

In January, newly elected San Luis Obispo County Supervisor Debbie Arnold took a seat on CAPSLO’s Board of Directors and in February asked the board to approve an extensive outside audit. Her fellow board members rebuffed her request and elected instead to send letters to officials of the city and county of San Luis Obispo, asking both agencies to audit CAPSLO’s financials.

Both entities rejected CAPSLO’s request.

The problem with the audit request was that it would have been based on documentation provided by CAPSLO, Duenow said.

“It doesn’t do much good to just look at their books, because they produce the books. It has to be done by an independent person or group,” Duenow said. “It needs to be a good performance audit.”

Performance audits focus on complete examinations of operations, management systems and procedures of a nonprofit entity.

CAPSLO Chief Operating Officer Jim Famalette did not respond to questions on why the organization has not conducted a performance audit.

“It is important that these groups be transparent,” said attorney Duenow, who has devoted four decades to volunteer community homeless service.

Duenow is concerned about the future of a proposed county homeless center that CAPSLO wants to build, he said.

“There is something here that doesn’t smell right,” he said. “And the new homeless center is just dead in the water until CAPSLO settles this.”

Duenow has discussed CAPSLO with a number of large donors, he said.

“I talk to them all the time, they say they’re not going to give CAPSLO a penny more until there is transparency,” he said. “I hope this all gets straightened out. We need CAPSLO, we really do. Who else is going to do it?”

 


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lakerhater

Don’t forget, tax evasion took down Al Capone, you just don’t mess with Uncle Sam and his money.


The Gimlet Eye

The smart ones don’t try to beat Uncle Sam, they JOIN him as partners in crime.


r0y

Well said. Capone’s problem was he was never elected to office.


GalaxyTraveler

It should be clear by now that this is a misguided witchunt. Just yesterday another friend of mine told me she was approached at the Shell station on Madonna Road by a disheveled man who came right up behind her and offered to clean her windhsield. She was terrified. She quiickly got in her car and drove off as the man gave her the finger. Why doesn’t CCN examine the REAL issue which is the invasion of homeless people in our city.


Nevada recently acknowledged giving 1500 one-way bus tickets to homeless people to get them out of their state. The majority of the tickets were to various California cities. I’m all for proper operations by CAPSLO. But in my opinion, the focus should be on the drunks and druggies who are plaguing our town. I have no sympathy left for them


Cindy

A homeless man approached her in a public place and asked to clean her windshield ! Oh no for shame that he asked such a thing, how horrifying, it made her jump in her car and drive away. What the ?? and what does this neurotic woman have to do with a story about misappropriating tax dollars intended for the homeless anyway? Galaxy, which planet do you think you’re on?


GalaxyTraveler

You’ve got to be kidding. It’s clear these guys pick on single women to intimidate them for money. If you were standing beside your car and someone came right up CLOSE behind you, violated your space, and started talking to you, what would you do? Be real here.


Cindy

A gas station is a wide open public area. It is an appropriate place to clean windshields and not the same as approaching a woman in a dark parking lot. So to answer your question, if my windshield was dirty, I would give him some change and tell him yes. I know this because it has happened to me in the past and I appreciate that approach more than someone asking me for some spare change for nothing. These are often helpless people and a very small percentage are dangerous, they’re just worn, torn and beaten down human beings who don’t have a clue that they’re scary. Homelessness scares people, can you guess why?


r0y

Do you work for the Democrat party? Your tactics are very familiar…


…always a “war on women” is it?


MaryMalone

For heaven’s sake. All politicians, and all political parties, are whores. Grow up and deal with reality.


There ain’t no Baby Jesus in politics.


kettle

So possibly homeless guy seeks to provide services for money, the American way.


So screw him for wanting to work eh?


scottabeer

Misguided Witch hunt? You mean asking for accounting records because someone made allegations? I’m pretty sure “public trust” “Ethics violations” and “not reporting income or gifts” are simply allegations. there is absolutely NO basis for the complaints so I guess we can all go back to work. As you were.. snap to it.. Schnell Schnell.


But, Every story has at least 2 sides. I’ve been fishing before. it takes awhile but when you catch it, you take care of it properly. The funny thing is, the Fish always stinks from the head down.


GalaxyTraveler

Funny you should use the word “fishing”. That’s what this story is all about.


deanwormer

Ground Control to Major Tom take your protein pills and put you helmet on !


MaryMalone

Funny, I think Richard Nixon tried the “there’s-nothing-to-see-here-move-along” approach with Watergate, and we all know how that turned out.


MaryMalone

Just because a person appears to be “disheveled” and because he “gave her the finger” does not mean that person is homeless.


Nevada’s horrendous act of discrimination was unbelievable. And why one-way bus tickets? Couldn’t they find any cattle cars?


GalaxyTraveler

When the District Attorney finds all this worthy of investigating, I’ll support that. But this is a private investigation by an online news source, searching tax records to find something to write about. I call that a witchhunt.


r0y

The same DA that is so incompetent, she has cost the city millions and is potentially being rewarded with another pay increase? Yeah, that does not seem unusual at all.


Homer

Perhaps you should know that the D.A. is a man and works for the county, not the city. Another highly-informed reader.


kettle

Well Ann Marie gave us a important update on the DA’s office today.


http://www.sanluisobispo.com/2013/05/06/2498488/several-fraud-cases-investigated.html


Perhaps this is what it takes to keep getting………


deanwormer

The District Attorney? How about the Fed’s, the can of WORMS has been opened!


SanSimeonSam

Galaxy,

I don’t know what your mental disorder is but i bet its hard to pronounce. Not sure how your example of the window washer or the one way bus tickets has to do with our county officials attacking the homeless, stealing their money….my god, Dee Torres, John Ashbaugh, Bruce Gibson and the rest are stealing money from the homeless and selling them the gifts and donations that the good people of this county have offered these poor folks (there but for fortune…..) Is there anything more filthy than that ? Everyone wants a solution to the homeless situation and we would like the results to include eliminating the homeless conditions in our county so that we don’t have to endure people rushing to wash our windshields. We have been betrayed by CAPSLO and the others that are perpetuating the situation for personal profit and gratification. I am crestfallen that you cannot grasp this and focus on a solution and quit your whining and red herrings.


deanwormer

I bet their not happy about the Sunny Acres situation, seems like Dan just wants to help people not make a living off them


kettle

It should be clear by now that GalaxyTraveler dislikes the poor, dirty and disheveled.


So is that you who started the slo anti bum blog? So ccn is just hunting the wrong witches for you?


SLOBIRD

Are you saying that Dee Torres, Director of Homeless Services, was at a public wide open gas station and someone approached her regarding washing her windows and she freaked out in the middle of the day?This from the Director of Homeless Services who is supposed to be trained in dealing with these situations is afraid of a homeless person! Really! She is definitely in the wrong profession, but then again, we all know that already from the compassion and care she has extended to the homeless under her leadership.


LAH

Galaxy – Well if CAPSLO would stop taking the majority of their Social Security funds, leaving these guys without enough $ to feed themselves, they wouldn’t have to ask people to wash their windows! Maybe he was “banned” for not using the right door or not running fast enough away from the shelter being seen within 1/4mile after 11:15?

CAPSLO/Family Ties demands their SS funds, then denies them services, thus leaving them no other choice than to “Ask” the public for $. At least this guy was willing to work (washing window) for it!

IMO the Homeless “problem” rests back in CAPSLO’s lap. IF they were compassionate and helpful to these usually mentally ill homeless guys, then the general public would have less issues with them. Kicking them off the property during the day to roam the streets is obviously not the answer. What’s the point of the Day center if they can’t be there all day?

I agree if Nevada is sending them here on one way tickets, we should send them back! Santa Cruz does the same thing! And I have heard, we do the same! We send them to Fresno! Vicious cycle!

BUT the FOCUS SHOULD be on CAPSLO and the said misappropriations. CAPSLO refusing to be 100% transparent is Not acceptable and raises a HUGE flag on their doings. It is suspicious and just plain Stupid for CAPSLO to deny and hide, then attack those who have concerns. What are they hiding? What more is going on that hasn’t been revealed?


deanwormer

If there is nothing to hide why are they threatening people with Lawsuits? Makes NO sense! I pay A LOT in taxes, and I’m paying CAPSLO to try to cover thier A$$ cus they now the chit will be hitting the fan soon!


LAH

You know Galaxy, your comment contradicts itself. On one hand you think exposing CAPSLO is a witch hunt. On the other hand you have complaints about the homeless being out on the street harassing people, and think CCN should discover why there are so many. It’s CAPSLO who is given thousands of dollars and those homeless SS checks, in return they are to care for their needs, offering services of food and shelter. Obviously there is something lacking in the way the homeless are handled by CAPSLO.

Also, how can it be a “witch hunt” when there are several witnesses and testimonies to the wrong doing? Are you saying you don’t think CAPSLO should be accountable?


Scarlet

Finally! Somebody willing to demonstrate transparency! Thank you, Mr. Dambly. Let’s hope Dee and Biz take a cue from you.


MaryMalone

CAPSLO, its board, CAPSLO’s head of homeless services and her boyfriend, SLOCo Supervisor Adam Hill, have been able to exert terrific influence on those who speak up against the disaster that SLO’s homeless services has become.


I would not be surprised if Mr. Damby changes his mind. He seems a little iffy about starting a foundation.


slomike

This is beginning to feel like Fox news and Benghazi or Kenneth Starr and Clinton’s sex life. Try making things better instead investigating “smells”. Like the man said, “We need CAPSLO. Who else is going to do it?”


scottabeer

there are too many Questions unanswered. when ALL funding dries up because of a “perception” then what? .


From Disneyland

scottabeer, questions will be answered and when “ALL funding dries up” then it is time to have a system like that of ECHO of Atascadero with nothing but volunteers. It has already been reported by, I believe the Grand Jury as a recommended homeless model. How about using the Santa Maria Good Samaritan model. Their night shelter is open during day hours for mothers and their children, however, mothers are required to attend parenting classes, drug or alcohol meetings, etc. How about Casa Esperanza Homeless Center in Santa Barbara: here is their mission statement:


Our mission is to assist homeless individuals

and families achieve self-sufficiency, by helping

as many as possible access the services they

need to transition to stable employment and

housing.


Casa Esperanza is open 24 hours a day, 365

days a year. Offering a wide array of services

for the homeless, with an emphasis on both

emotional and physical health, 10 different

program partners collaborate to bring recovery

to the homeless — all under one roof. There are other shelters who treat the homeless with respect and dignity. I am talking about our neighbors whose house burned down, whose spouse ran away with another woman/man and left hisex and 4 kids without a car and took all the money from their bank account; that highly educated and unemployed homeless because that company moved overseas and now the homeless person can’t find a job because of age and used up all their savings. How about a homeless person who lost loved one to illness, accidents, and can’t handle the emotional stress and can no longer function at their job and gets fired, and now all their unemployment has depleted. How about those homeless who have bachelors, masters and even doctorate degrees who lost their jobs and all of the unemployment extensions ran out and still cannot find a job (sent out hundreds of resumes). Not all homeless are transients, they are our friends, and neighbors and even some of our own loves one.


karma2come

Too many people view homeless as society rejects, thank you Disney for providing the neighbor next door picture we too frequently overlook! I also have a question maybe you can answer, the homeless who are on case management, do they see the case managers at the Prado day center? Do the case managers have offices there or somewhere else? I read earlier that people can not go to the overnight shelter before it opens so I assume the case managers work from the day center, correct?


Reality Check

When there is genuine need and genuine dedication to meeting that need, people step up and help. CAPSLO needs to get out of the way of true humanitarian efforts. Let people with common sense, good management practices and compassion take over the homeless services.


MaryMalone

How is this like Fox News or Kenneth Starr’s tax-funded campaign against President Bill Clinton?


For that comparison to be valid, there have to be significant similarities between the Torres/CAPSLO/Hill debacle and Starr’s tax-funded campaign against Clinton.


kettle

If only CCN had 1/10 of the budget of those two.


To clean house we will get a little dirty first.


tomsquawk

here we go again.


Mr. Holly

Maybe the decisions makers should check into the doings of the Robin Hood Foundation. There was a segment about this foundation that was on 60 minutes last evening. The founder, Paul Tudor Jones, runs the foundation like a business where accountability is required. During the segment he revealed that between 5%-10% percent of the projects that are initially funded are recinded because of non-performance. Our local decision makers should look into how this fouindation is run and maybe learn how to make these local programs successful. There has to be a business plan with goals that are set and those goals have to be met or they are no longer funded or redesigned. Does CAPSLO function under requirements that they be accountable for their actions? Are there goals in place that must be met? Are the people running CAPSLO performing as should be required? With a $60 million budget there should be some answers to these questions. Or, is CAPSLO part of that 5%-!0% that doesn’t achieve what there intended purpose is?


Jorge Estrada

Now that the County and Sunny Acres are at some level of agreement, during this ray of sunshine on fertile fields, I’d divert some of that public money towards this camp where the rules are logical and practical. These people are a the bottom and willing to contribute something for their regrowth, a second chance that has to be earned. I say hurry up and fund it to be done yesterday.


obispan

No, this would infringe on CAPSLO’s monopoly of SSI money.


Bluebird

Has anyone from the public read the 2008 grand jury report? Is it available on line?


Cindy

I have read it, I found it on line. I believe it was on the county website. It was an interesting read to say the least and the report also encompassed the HSOC (Homeless Services Oversight Committee). I believe it was on their site as well, although it wasn’t very favorable to them. Several parties were made to answer and the replies are included with the report. Torres made me laugh at her defensive reply when she was told to take a clue from ECHO since ECHO does a much better job than she does! It’s a must read, in fact I think there are two reports if I recall. One on CAPSLO HS and one on HSOC or HSCC. Don’t have time to look them up right now. Anyone can google them.


MaryMalone

http://slocourts.net/grand_jury/reports/2009_2010

—————————————————————————


The GJ 2009_2010 report, “Homelessness in SLOCounty,” is available, with responses, as follows:


* Board of Supervisors

*Department of Social Services

*Health Agency

*CAPSLO (Community Action Partnership)

*ECHO (El Camino Homeless Organization)

*5 Cities Homeless Coaltion


City Councils:

*Arroyo Grande

* Atacadero

*Grover Beach

* Paso Robles

*Pismo Beach

*San Luis Obispo


scottabeer

Thank God they didn’t issue Plastic bags or Smoke within 20 feet of the place or they would be in real trouble.


Spirit Filled

They would be in more trouble if they put the ten cent bags over their heads and counted to 500. Just trying to help guys. Blessings


Spirit Filled

They would be in more trouble if they put the ten cent bags over their heads and counted to 500. Just trying to help guys. Blessings


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