Anaheim Insider here.
More bad news for Coalition of Anaheim Taxpayers for Economic Responsibility, the gadfly faction better known as CATER. Last week, TheLiberalOC.com revealed that CATER, despite claiming 501(c)(4) non-profit status, has never filed the annual Form 990 disclosure reports it is required by law to submit to the IRS.
A few days later, TheLiberalOC.com reported CATER is longer part of the Angels negotiations MOU lawsuit, leaving CATER President Cynthia Ward as the sole litigant, but as an individual. Judge James Di Cesare has finalized the ruling that CATER has no standing to sue the city in this case, and has also dismissed one of CATER’s two claims of Brown Act violations. Judge Di Cesare gave CATER some additional time to make its case on the other Brown Act violation claim, but CATER realized it couldn’t and withdrew that claim.
That leaves Cynthia Ward suing as an individual on her amended complaint that the city improperly complied with a public records act request pertaining to that nearly two-year old Council vote. That means CATER cannot pick up the tab for the litigation through confidential contributions. Cynthia Ward has to pay from her own pocket for the legal services of Greg Diamond, Chad Morgan or whomever is representing her. If those services are being provided pro bono, or if a third-party is paying for them, Ward will have to disclose it on the annual Form 700 she files in her cherished capacity as a member of the Orange County Cemetery District Board of Directors (it’s not available in the “Transparency Section” of the OCCD website).
Is CATER Really A 501(c)(4)?
CATER claims it is a 501(c)(4), which is a federal tax-exempt status. on-profits seeking 501(c)(4) tax-exempt status must apply by submitting a Form 1024 to the IRS. If the IRS approves the application, it sends the applicant a “determination of exemption” letter. Both the letter and the Form 1024 must be provided by 501(c)(4) groups upon written request.
CATER counsel Greg Diamond’s comment to TheLiberalOC.com on the matter of the non-existent Form 700 fillings was “Thanks for bringing this to my attention. I am not sure what’s going on here — ,y understanding had been exactly what I stated to the anonymous person grilling me on AnaheimBlog — but I will check with our attorney handling our incorporation (who is currently on vacation), determine the basis for the problem, and fix it.”
Diamond’s claim doesn’t ring true to anyone familiar with the process of applying for 501(c)(4) status. It’s not just leaving it to a lawyer fill out a form and checking some boxes. It requires submitting a business plan to the IRS, and that requires the substantial involvement by the applicant, which in this case would be Ward, Diamond and Brian Chuchua.
If CATER has never filed its mandatory annual disclosures to the IRS, it’s not unreasonable to question whether CATER actually is the 501(c)(4) it claims to be? If it is not, what does that mean for anyone who has donated to CATER while under that impression, and taken the tax deduction? If CATER has not been approved as a 501(c)(4), it would also mean it would have to pay taxes on any revenues.
If CATER is an approved 501(c)(4), it would be easy to prove by posting on its website its Form 1024 and “determination of exemption” letter from the IRS. Why not walk the transparency talk?
501c4 is not tax deductible. CATER has never made the claim that donations are tax deductible, and we have gone to great lengths to explain that. If anyone has given to CATER under the mistaken impression that donations were tax deductible, we will gladly return that money.
The attorneys handling the CPRA case work on contingency, and will be paid when the CPRA claim is completed, something I trust may be soon since the Judge already made it clear that records I requested were not provided. At least I hope the City stops wasting taxpayer resources and coughs up the records so we can all get our lives back. Working on contingency and taking the brunt of a loss is a standard form for attorneys, it shows their own confidence in their case, and is in no way a “gift” to me, nor is it reportable on a 700 form.
You really do think I am incredibly stupid. I must be, I wander over here.
This comment is ludicrous. She’s claiming the city clerk didn’t turn over all the records and that if somehow the mystery documents are handed over they will stop suing the city. Linda Andal is above reproach. She and her staff bend over backwards to comply with exhaustive record requests from Cynthia Ward. Anyone can check out how exhaustive her PRA requests are on the city’s website under the office of the city clerk. Just her PRAs cost the city thousands in staff time and expense. After two years of suing the city, CATER has been removed as a plaintiff by the judge and the entire case hinges on Linda Andal not doing her job. The safe bet is on Linda that the documents were turned over and Ms. Ward is likely debating semantics on what her request was seeking. End of story.
“You really do think I am incredibly stupid.”
Do you really want anyone to answer that question?
Now that you’re here, a few questions:
Has CATER submitted Form 1024 to the IRS?
Has CATER received a “determination of exemption” letter from the IRS?
If not, is CATER paying taxes on its revenue?
Why hasn’t CATER filed any of the required annual Form 990 disclosures since its formation?
Well said Anaheim Insider. Cynthia- answer the above questions truthfully.
Says the anonymous commentator.
Cynthia’s response tells you everything you need to know. If CATER wasn’t in trouble, she and the CATER Crew would be all over the internet saying there is some sort of conspiracy afoot attacking them. Read her response and you know they are sweating over there.
With this news, the city might actually be able to get back to work, free of pointless litigation threat.
The law is clear that 501(c)(4) groups are to be operated for the purpose of furthering the public good. During the 2012 election cycle 501(c)(4) groups became the target of a scandal because the IRS was doing its job by examining whether C4’s actually were engaging in social welfare, or whether they were using the designation as a pretext for political purposes under the cover of anonymity.
Cater calls itself a Social Welfare (Public Benefit) Organization. The IRS offers four examples of this type of organization and they are:
An organization operating an airport that serves the general public in an area with no other airport and that is on land owned by the local government, which supervises the airport’s operation.
A community association that works to improve public services, housing and residential parking; publishes a free community newspaper; sponsors a community sports league, holiday programs and meeting; and contracts with a private security services to patrol the community.
An organization that tries to encourage industrial development and relieve unemployment in an area by making loans to businesses so they will relocate to the area and
An organization that holds an annual festival of regional customs and traditions.
Exploring further I found other precedents:
An organization that purchases acreage in a stated location, makes arrangement for water and sewage facilities and enters into arrangements for the erection and sale of dwellings to low and moderate income individuals.
A junior chamber of commerce operated exclusively for the purpose of rendering civic services for the promotions of the welfare of the community and its citizens.
An organization formed for the purpose of establishing and maintaining a system for storage and distribution of water in order to increase underground water levels of a community.
And the list goes on.
Section 501(c)(4) defines social welfare organizations as “Civic leagues or organizations not organized for profit, but operated exclusively for the promotion of social welfare, or local association of employees, the membership of which is limited to the employees of a designated person or persons . . . and the net earnings of which are devoted exclusively to charitable, educational or recreational purposes. Treasury Regulation 1.501(c)(4)-1(a)(2)(i) provides that an organization qualifies as a 501(c)(4) organization if “it is primarily engaged in promoting in some way the common good and general welfare of the people of the community. An organization embraced within this section is one which is operated primarily for the purpose of bringing about civic betterments and social improvements.”
Again, the three categories within that definition are: Civic Leagues, Social Welfare Organizations and Local Associations of Employees.
In her own words, this is what Cynthia Ward says that CATER has done to date:
Filed Public Records Act requests, a legal and ethical action.
Warned the City of Anaheim when they refused to provide Public Records as required by State Law, and then filed litigation to enforce our rights to Public Records only after exhausting other attempts to overcome the City’s unlawful refusal to disclose information we had the right to access.
Demanded the City follow Open Meetings laws as required by State Brown Act and remedy the violation when they failed to follow open meetings laws.
Filed litigation to enforce our rights to open meetings as government conducts the PEOPLES business.
Demanded the City comply with the City Charter, which demands the right to vote before leaders obligate our future funds with bond payments.
First of all, most of the examples/precedents listed above have worthy, community oriented causes attached to them. I do not believe that suing the city, losing and costing the Anaheim taxpayers money could be considered civic betterment or improvement. After all, isn’t it the taxpayers that they say they are watching out for? How about filing exhausting public records requests costing the city thousands of dollars? Also, CATER is constantly touting that they are working for “all of the citizens of Anaheim” but the truth is there are folks all over Anaheim, from the Hills to the West, who oppose what CATER is doing. CATER appears to be mostly the lobbying arm for the Mayor and his causes. They support what he supports and protest against what he is against. Lobbying is not considered to be of a sufficiently charitable or nonprofit nature to justify the privileged status of 501(c)(4). Additionally, CATER’s lobbying for its own interests serves to benefit only that portion of the public which sympathizes with its point of view.
Then there’s the money. What is CATER doing with the money they collect? Are their net earnings being devoted exclusively to charitable, educational or recreational purposes?
And what about those puzzling connections to the City Hall? Regarding Social Welfare Organizatons, Treasury Regulation 1.501(c)(4)-1(a)(2)(ii) provides that the promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office.” These organizations may engage in some political activities, so long as that is not its primary activity. Every member of CATER was actively involved in Tom Tait’s campaign (as individuals, of course . . . wink, wink). Tom Tait attempted and failed to appoint CATER member Brian Chachua to the Investment, Technology and Budget Commission. CATER member Vctoria Michaels filled in as Tait’s aide after Mishal Montgomery hit her salary cap. Doug Pettibone (Tait’s failed pick for Council) is a CATER legal advisor along with Chad Morgan (Council Member Vanderbilt’s attorney). Helen Meyer (CATER Treasurer) is Council Member Vanderbilt’s assistant. Mayor Tait voted against defending his city from a lawsuit filed by CATER, but voted for defending his city against a lawsuit filed by OCCORD. Cynthia Ward (CATER President) and Mishal Montgomery watch the council meetings together from the Mayor’s Office. Then there are those rumored gatherings at a private residence in Anaheim Hills.
This group has an undeniable political component and is run for the benefit of a private group of like minded individuals. Cynthia has said that anyone is able to join CATER. Cynthia has also said “the benefits of Voting Membership or Board Membership are not being offered at this time to those with openly antagonistic behavior already displayed toward CATER, as it indicates potential bad faith in joining the organization. Please note that we are not legally obligated to accept anyone.” Dan Chmielewski (Liberal OC) was turned down for membership by Greg Diamond because Mr. Diamond felt that Mr. Chemielewski was acting in “bad faith.” It seems to me that an organization that is devoted to the social welfare of the entire community should not be able to discriminate against those soliciting membership for personal reasons. Where is the threat? What is CATER hiding?
Finally, for all of those out there who believe CATER has actually made a positive impact by promoting the common good and general welfare of this community, please tell us what it is. Give me some tangible evidence that this group is not just a mouthpiece for the Mayor’s office and prove to me that they have somehow saved your tax dollars from being squandered. I’m sure with some thoughtful reflection you will find that it is just the opposite.
CATER loves to rail against anon commenters; I’m happy to attach my name to seek CATER membership or ask the IRS for the form 990s; Diamond asked me why I didn’t ask them first. I didn’t trust them to comply and as it turns out, they didn’t have the paperwork filed.
I too have noticed Greg Diamonds conspicuous absence from the blogs (even his own) since the Liberal OC broke this news, I laughed out loud when I read he had thirty something posts overnight this weekend on every outlet EXCEPT the local blogs! That same post postulated the eventual storm that comes when Mayor Tait is exposed as having financially supported (albeit clandestinely) a group who has THRICE sued his city (and lost). That is going to be a tough political pill to swallow.
And where is CATERS “treasuer” on all this? Isn’t Brian an experienced businessman, as an officer whose entire job with the organization is to handle financial matters.
Diamond simply can’t stay quiet for much longer. it’s not in his DNA. His desperation and inability to shut up will conquer all and the world will be back to ignoring 10,000 word essays on gay seals affect on redistricting and why guns are bad, but stealing them and shooting cops isn’t.
Who Is Cater, in case you don’t know this Mr. Diamond’s M.O. . Fling a buch of mindless, unsubstantiated claims, drowned in verbage and the when someone calls you out…….HIDE.
It’s almost as predictable as his baiting commenters of yesteryear. Strangley, one of his greatest advesaries was his current friend David Zenger. Go figure that out…With the only things in common being big mouths and unemployment their shallowness exudes.
Bottom line is Greg is the dog who can bark but can not bite.
CATER’s website now says that it’s 501(c)(4) status is “pending.”
So:
1. They lied about there tax status.
2. They asked people to contribute on the assumption that all contributions would go for their “transparency” purposes instead of corporate taxes.
3. That is fraud.
Adult supervision may be needed.
Their. Lied about “their” tax status. Fraud is deliberate, and needs to offer a benefit to those that lied about “their” tax status. There (proper use now) are plenty of dictionary sites that offer free assistance regarding the use of “their, there, they’re” as well as defining words like “fraud.”
Adult supervision is welcome, are you amusing us all by offering to provide it?
Grammar lesson aside, the IRS told me if they had your Form 990 on file, they’d give it to me. They did not. Both you and your lawyer were evasive about the filing with Diamond saying “we’re good” and you citing language from the IRS letter.
I won’t call it fraud; I’ll call it tap-dancing while you tried to figure out what forms weren’t done. But it certainly wasn’t the truth-telling you claim to be all about.
I’ll try again to get Miss Transparency to answer some very simple questions that she has no good reason NOT to answer:
Do you really want anyone to answer that question?
Now that you’re here, a few questions:
Has CATER submitted Form 1024 to the IRS? If so, when?
Has CATER received a “determination of exemption” letter from the IRS? If so, when?
If not, is CATER paying taxes on its revenue?
Why hasn’t CATER filed any of the required annual Form 990 disclosures since its formation?
Come on, Cynthia. You have no good reason to stonewall.
Hi everyone.
DANC: to my understanding, we are in compliance with IRS rules. That’s word Alpha and Omega. CATER is certainly not going to be examined by the likes of you. Meanwhile, HAS ANYTHING ELSE HAPPENED IN ANAHEIM WHERE PEOPLE HAVE STONEWALLED AND NOT PROVIDED FORMS AND NOT ANSWERED QUESTIONS EVER CAPTURED YOUR ATTENTION OVER THE PAST TWO YEARS? One wonders why not. (Who am I kidding — no, one need not wonder why not.)
Anaheim Insider: shut up. Even if we were inclined to answer questions from Dan, we’re not inclined to answer them from (1) someone who won’t even their own identity; (2) [personal speculation deleted](3) someone whose existence — hell, I’ll even say [vile accusations deleted], because not actually knowing who you really are there’s no way that I can be libeling you — appears to be devoted to helping THE MOST OPAQUE CIVIC GOVERNMENT AROUND stay in power long enough to drain the City’s future earnings down to the coffee grounds. Why don’t you give a SINGLE GODDAMN about any of the actual important corruption going on under cover in Anaheim?
You don’t get to ask any questions, you crooked freak. You get the general denial you have above — and even that is more than you’re owed. Any other comment other than roundly deserved abuse like the above will be conveyed in a proper venue. If your readers don’t like it, they can easily reach me to express their feigned or hypocritical displeasure.
One exception: I will always (if I see them) answer questions like Steven Caflton’s below that have an impact on whether any elected official would need to abstain from any official dealings regarding CATER — and ONLY for that specific reason.
Bye!
Greg:
My question was directed at Cynthia Ward, not you. Or do you run CATER?
That nothwithstanding, it’s always a treat to watch your hypocrisy and arbitrary standards at work. You denounce anonymous commenters and refuse to answer questions from them…unless they’re on your side! You never throw temper tantrums when it comes to Randy Roddy or BigBoxofRedWine, for example.
You bleat about “actual corruption” in Anaheim. Where? When? REAL corruption, Greg. Not what you imagine in your deluded mind to be corruption.
I’m CATER’s attorney and I can speak for CATER in this respect. There’s no point in dealing with anonymous lying paid political assassins — whcih neither of the pseudonyms you mention appear to be — on a blog that few people other than its anonymous commenters seem to read.
Bye Felicia.
Define compliance please? You lied when you were asked about Form 990 (“we’re good” we’re your exact words.). So I don’t believe a word of what you say. The IRS will send me a copy of your paperwork when it’s filed and recorded. I have nothing from them at all.
I’ll ask all the same questions of you the anon commenters ask and I post under my real name so answer the questions why don’t you? Instead your response is “look. Squirrel.” Not at all transparent are you?
“There’s no point in dealing with anonymous lying paid political assassins …”
“… or with willfully blind dolts,” I should have added.
2:07 am. Those anti-depressants keeping you up or knowing you’re caught lying about the 990s?
Define compliance please. Be specific.
I think that last pejorative is likely to ricochet back at you, Greg.
Thanks for the lecture Greg.
Your week off from commenting did little to settle your moods. In fact, it appears your weirdly placed anger has grown: “Shut Up”….”You Don’t get to ask…” Spoken like a true professional attorney!!!
You can spin your failure to come clean anyway you want, the fact remains, you balked. at was a minor technicality, proving once and for all you are full of c–p.
And, afterr a bunch of requests they claimed all the rules where followed? For a group that is all about accountability and government transperency, they are no more transparent it turns out than a private non-charitable business. And about as honest as one too.
So Cynthia Ward calling me out on the availability of Form 990s was … Wordplay?
I have a question for Ms. Ward:
Has Mayor Tait (directly or indirectly) contributed financially to CATER?
A simple yes or no will suffice.
No.
That’s probably true, I bet the mayor doesn’t contribute financially. From my read, he is more a strategic advisor to this organization committed to suing the city every chance it imagines. Very sad on so, so many fronts
Also no.
Now tell me what you “suspect” is the relationship between Pringle and Murray — and to an extent Brandman — and to a probably pitifully smaller extent Kring.
And there are more names to cover after that, “Jack.”
That is completely irrelevant to a conversation about the mayor and his affiliation with an organization that repeatedly sues the city he is supposed to be leading. If you want to start a new topic, please do so on your own blog. What I am interested in here is getting to the bottom of the incredible coincidences where CATER falls lock step in with Tait yet claims there is no relationship.
And please include in any response the answer to the questions Anaheim Insider posted about your status with the IRS. I fear mentioning this might mean you return to radio silence but it’s important to know if CATER holds itself to its own “standards.”
Mayor Tom Tait has never contributed to CATER, and I have no reason to believe he has contributed indirectly (how does one do that? Like giving money to friends to give to a group?) Mayor Tait has also not ever advised CATER nor discussed CATER business nor litigation. Period.
While you are busy looking at connections between Tait and CATER, did you happen to notice how many people shared the same position on the Angels deal? Did Tait go out and recruit those sports writers to mock Murray and company for their extreme gullibility in caving in to Moreno’s non-demands for goodies others WANTED HIM TO TAKE? Did Tait somehow arm twist the Grand Jury into posing the exact same objections as the Convention Center lawsuit? You want to believe that Tait is out of step with the people of Anaheim and only CATER is in agreement with him, but the election told us an entirely different message.
Could it be POSSIBLE that the vast majority of Anaheim agrees with Tait’s positions, CATER agrees with the majority of our neighbors, and it is YOU here at this icon to group-think that are out of step? So far this blog MISSED COMPLETELY on the District Elections, the popularity of Mayor Tait, the love affair of Anaheim with the Angels sustaining any and all insane demands for outrageous benefits, and the public’s view of Disney.
Oh, and I love that you want to claim Murray can go to Europe with the head of Disney’s Government Relations department and NOT discuss Disney’s upcoming greed festival, but Tait and CATER agree with the majority of Anaheim’s public and we are somehow in cahoots. Do you even hear yourselves? I am busy and you are wasting my time. I won’t be back.
Promise?
Hush, child.
What exactly is this supposed to mean?
Greg Diamond’s narcissistic tendencies have crossed with his self described “clinical depression”.
This guy seems to know no limits, I suspect, that the “Kitchen Table” lawyer has more serious concerns at home, given his underemployment.
Bottom line is Greg’s weird little world seems to be shrinking. Facebook, OJB, obscure blogs. Wouldn’t it be easier to apply at Farmer Boy’s Greg. Your family would appreciate the work example and the employee discount.
Calm down Cindy!
The guy asked a legitimate question. Mayor Tait seems to be on the side of CATER on every issue your organization brings up.
Some of which may or may not be laudable, but it’s fair to assume given your relationship, his political prowess that he might be involved somehow in a group that largely exists (however coincidentally) to support his views and agenda. This is not an unreasonable assumption, you should know that. Instead you get horribly defensive, which leads to suspicion.
Nobody brought up the Red Herring that you do about Murray and her friend. The commenter asked PURELY about CATERS relationship wit the mayor, you responded in a paranoid, vitriolic manner fitting your attorney.
You, I will say are an expert at deflecting and lying. It’s only fair, however legal that you disclose who is behind your organization. Is it simply you and Brian? Greg can not be a part as he lives in Brea. So shouldn’t the public know who is SO AFRAID of political retribution because in your words: “THEY HAVE MUCH TO LOSE” that smacks of special interests.
“Oh, and I love that you want to claim Murray can go to Europe with the head of Disney’s Government Relations department and NOT discuss Disney’s upcoming greed festival, but Tait and CATER agree with the majority of Anaheim’s public and we are somehow in cahoots. Do you even hear yourselves?”
The question, Cynthia, is whether you hear yourself? You’re engaging in the exact same accusatory game which you’re condemning. You are a towering pillar of virtue and rectitude while those with whom you disagree are venal and corrupt. The act is getting old.
So, between Cynthia’s grammar lesson and Greg’s ranting we are not any closer to the answers to the questions being posed on this blog. Anonymous or not, folks here have opinions counter to those who call themselves members of CATER and, believe it or not there is a large contingency of long time residents who disagree with CATER’s so-called mission. You are a rightous pair, aren’t you, Cynthia and Greg? Prior to your becoming “involved” there were many relationships formed that still have a long reach into the political arena and allow for a certain dissemination of privileged information which makes so many of your comments about the Mayor laughable. It is a small world, after all. We all know that you “hang out with Tom and Julie” and then try to convince us that you don’t discuss CATER business with the Mayor. Yet, Kris Murry cannot take a vacation with a friend (in fact, a group of friends) without being accused of impropriety. It’s ridiculous! Then you talk about this supposed deep rooted City Hall corruption and cannot prove any of it by actually winning one of your frivolous law suits represented by a group that is acting outside the law (aka out of IRS compliance). Your claims of doing “the people’s work” have no foundation in truth.