FBI Eyeing International Humanities Center Shutdown

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May 14, 2012; Source: Los Angeles Times

The Nonprofit Quarterly’s Cohen Report broke the story (see here and here) about the collapse of the International Humanities Center (IHC), a nonprofit fiscal sponsor based in Woodland Hills, Calif. We detailed several hundred thousand dollars of missing funds and efforts of the small, often unincorporated groups sponsored by the IHC to get public sector oversight officials to pursue the missing IHC leaders. We wrote about contacts with the California Attorney General’s office and the desire of some of the aggrieved groups to get the Federal Bureau of Investigation (FBI) involved.

The Los Angeles Times now reports that the FBI is actually involved, along with the state AG’s office, in looking at what happened to the funds of the approximately 200 groups relying on IHC. The Times suggests that the groups may have lost approximately $1 million in the shutdown, and its efforts to reach the founder and executive director of the International Humanities Center, Steve Sugarman, have been no more successful than ours. Sugarman has reportedly not responded to e-mails from the Times and his phone has been disconnected.

The Times confirms our understanding that the hardest hit group was the Pasadena, Calif.-based Afghan Women’s Mission, reporting a loss of $404,000 which was supposed to have supported schools, health facilities, and emergency relief projects. The co-founder of the mission, Sonali Kolhatkar, says that it used to receive about $10,000 a month in donations, but now donations are “at a trickle.” Peaceful Uprising, which addresses global warming issues, lost $88,000 which it had used to pay for four staff people in its Salt Lake City office, but now the office is run by volunteers.

The groups that used IHC ass their fiscal sponsor are struggling with how to present and communicate what happened to them. Does admitting that they might have been scammed out of donors’ contributions harm their pitches for new funding? What does their association IHC, now the focus of FBI and California AG investigations, do to their reputations? With IHC’s executive director unreachable, and with one of IHC’s senior executives having left the country after what has been alleged to have been “a deceptive email scam,” there is plenty here to trigger the interest of the FBI and the AG. But will that result in funding to replace what the sponsored groups have lost?

The groups who used IHC have done nothing that makes them culpable for what might have happened inside the Center to make it collapse so precipitously. The nonprofit sector—and the nonprofit fiscal sponsors sector—should be doing whatever they can to shore up the positions of these organizations that, through no fault of their own, have lost hard-to-get resources. Moreover, given how small and fragile these organizations are, the FBI and AG, neither of which really confirm their investigations, ought to speed up their reviews so that if prosecutions and/or rectifications are warranted, they can be achieved as rapidly as possible.—Rick Cohen

  • Sharon Simone

    I have an email from the Los Angeles District Attorney (Major Fraud Division), Jeffrey Edwards, that there is an open FBI investigation taking place. It is dated 5/10/12 and is a result of a great deal of correspondence I have had with this office over the last 4-5 months.

    If it is important for anyone reading this to actually see this, write me and I will provide it.

  • Rick Jahnkow

    I belong to another IHC victim, the National Network Opposing the Militarization of Youth, which lost approximately $11,000. It was our entire treasury. As an antiwar organization in a country (the U.S.) that spends almost as much on war as the rest of the world combined, it will be extremely hard for us to restore what we lost.

    Sharon, please send us any information that you have on the investigations. Our contact information is info@nnomy.org.

    Thank you.

  • Arlene Inouye

    I was the project director of three small organizations at International Humanities Center- Coalition for Alternatives to Militarism in our Schools, National Network Opposing the Militarism of Youth and People’s Earthquake Relief Fund. Can you please connect me with the FBI in this case. Thank you. 626-483-6160

  • Arlene Inouye

    Could you please send it to me. I hope that it will us understand what has happened with our money. aginouye@aol.com.
    Arlene Inouye. Thank you very much.

  • Don Yellowman

    I would be very interested in learning what you know about IHC…My organization was one of the victims….

    My name is Don and I am Navajo living on the Navajo Nation.

  • Don Yellowman

    I know the State of California took into custody IHC…perhaps they can link us to the FBI Investigator who is or has worked on this…and or refer us to someone who can answer questions.

    Thank you Don Yellowman

  • Sasha Crow

    It is distressing but not surprising to have run into this information about IHC. We were under IHC’s sponsorship ( Collateral Repair Project – an Iraqi refugee aid project in Jordan) until at least mid-year 2011. We had filed out Articles of Incorporation in Oct 2010 after becoming increasingly frustrated with IHC’s procrastination in sending requested funds, lack of promised financial reports, rudeness when we requested information, and the sudden leaving of a key staff member – and the letter that we do not have any further communication with him. These things coincided with IHC suddenly doubling their fee at end of, as I recall, 2009, promoting us to seek stand-alone 501(c)(3) status.

    Because we left their sponsorship, we were unaware until today that they had folded and with projects’ funds. Now we re concerned that IHC had been skimming off our donations while we were still under their sponsorship.

    Should we contact the FBI or CA Attorney General to report that we were possibly victimized, too?