Heat and Headaches Shutdown Detroit Nonprofit

January 5, 2011; Source: Detroit News | Detroit City Council President Charles Pugh is following advice from an old country western song about "knowing when to hold them and when to fold them." After taking what the Detroit News called "heat" for questionable operations surrounding a nonprofit he started in March, Pugh is shutting it down.

Since setting up The Pugh & You: Move Detroit Forward Fund to raise money for staff travel and community outreach, Pugh has been criticized for his group's $5,000 a table fundraiser last August to celebrate his 39th birthday and for what the Detroit News says was his refusal to "disclose donors that a staffer confirmed included a strip club operator who gave $500." Because the group operated as a 501(c)4, it doesn't have to release expenses or names of donors.

But after former Detroit Mayor Kwame Kilpatrick's indictment last summer for allegedly using his Kilpatrick Civic Fund to fund his personal lifestyle, Pugh has come under increased public scrutiny. Pugh claimed the group was set up to cover expenses not in his $900,000 budget, such as trips and other activities resulting from his city duties.

Although not disclosing how much they cost – or how much he raised, other than to say there's nothing left – Pugh said funds from his nonprofit paid for work-related trips to Washington, D.C., Los Angeles and Pittsburgh, as well as a part-time staffer's salary, among other things.

While perhaps starting his fund on a charitable impulse, the only one immediately benefiting from shutting down the nonprofit is Pugh himself. "It was just a freaking headache," Pugh said. "I am not going to have anything that would give the impression that something was created to fool people. That is not why I got into this."—Bruce Trachtenberg