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Unlawful Conduct?

Two of Howard Rich’s tax-exempt organizations may be operating illegally in Wisconsin

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Two tax-exempt organizations led by Howard Rich may be operating illegally in Wisconsin, the Center for Public Integrity has learned.

Rich, a libertarian political activist in New York City, has been a driving force behind this year’s eminent-domain and regulatory-takings ballot initiatives in Western states.
 
The Center reported on November 1 that the two organizations — Legislative Education Action Drive, which Rich founded, and Parents in Charge Foundation (formerly the LEAD Foundation), which he chairs — had operated in Illinois without the certificates of authority required to do business there, according to 2004 tax records and records maintained by the Illinois Secretary of State’s Office. The organizations have since moved to Wisconsin, according to their respective Web sites, and now operate from the same address in Madison. According to records maintained by the Wisconsin Department of Financial Institutions, however, neither organization has been authorized to transact business in that state, either.
 
Both tax-exempt organizations were incorporated in Virginia in 2001, making them “foreign corporations” in the eyes of other states. Wisconsin law states that such an organization “may not transact business in this state until it obtains a certificate of authority from the Department [of Financial Institutions].”
 
Jenny Acker, the director of Wisconsin’s Bureau of Corporations, which is part of the Department of Financial Institutions, told the Center that all nonprofit corporations must register with her office if they are going to operate in the state.
 
“It is required that nonstock foreign corporations register with this department to transact business before they actually start transacting business in Wisconsin,” Acker said.
 
As the Center previously reported, the Illinois Secretary of State’s Office is investigating whether Legislative Education Action Drive, its affiliated foundation, and three other organizations connected to Rich have illegally conducted business within that state.