Attorney General Races Threaten Nonprofit Oversight

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October 27, 2010; Source: Washington Independent |The national preoccupation with the upcoming U.S. House of Representatives and the U.S. Senate elections means that sometimes the public is insufficiently attentive to electoral issues at other levels of government, particularly for governors (some predictions are that the Republicans will come out of the elections holding two-thirds of gubernatorial seats), state legislatures, and attorneys general.

Forty-three out of 50 attorneys general are elected rather than appointed, and 30 of them will be selected by the voters next month. Turnover of AGs could harm the efforts of states that earlier this month unanimously agreed to coordinate an investigation of mortgage servicers for their potentially fraudulent foreclosure practices. Turnover in the AGs offices could also result in shifts in state government oversight of nonprofit fundraising and accountability, as most AGs have charity officers charged with keeping an eye on nonprofit practices.

Not all state AGs have been energetic on nonprofit oversight, but some stand out out. Reasonably strong AGs with consistent, thoughtful—though when needed, muscular—nonprofit track records such as Lisa Madigan (D) in Illinois and Martha Coakley (D) in Massachusetts seem sure to retain their positions. Also Andrew Cuomo’s (D) seat in New York and Richard Blumenthal’s (D) seat in Connecticut seem likely to go to successors with priorities similar to the current office holders.

A number of AG seats could change hands with consequences for nonprofits however. Possible Republican pick-ups are California where current AG Jerry Brown (D) is running for governor and in Arizona where Terry Goddard (D) has come to the end of his term limit. Other seats that may change hands are in Ohio, Iowa, and Michigan—all states where current AGs have devoted attention and resources to issues of nonprofit accountability.

We tend to think of the Internal Revenue Service as the nation’s first line of protection for charitable assets, but it’s often state AGs who take on state-level charity oversight. In this election, many voters seem to hold, at least softly, the Tea Party’s criticisms of government activism. If these limited-government candidates for AG get into office, it could be bad news not just for state action against fraudulent lenders and servicers, but bad news for state enforcement of nonprofit-focused laws already on the books.—Rick Cohen