Nonprofits, law and the Blagojevich scandal

Jail the corrupt politicians, originally uploaded by Labour Youth.

I'm in the midst of preparing the final exam + review for my nonprofit law class, but I couldn't help but get caught up in the Blagojevich criminal complaint. Nonprofit and tax-exempt organizations are central to the indictment, which alleges, based largely on taped conversations, that the Illinois governor sought to enrich himself and punish his critics through deals involving a campaign fund, state finance authority, a hospital expansion program, a union, a charity and a 501(c)(4) social welfare organization.

Really, I could have used the complaint as a springboard for half my course.

As someone who practiced law in Chicago, I find several aspects of the complaint sadly familiar--let's just say Gov. Blagojevich is not the first Illinois public official to cultivate a quid-pro-quo culture for getting permission for nonprofit projects. (See the complaint pages 21-23 and 36 for some killer stuff on this score.)

Also interesting from the perspective of charity history is Blagojevich's attempt to trade his Senate appointment replacing Obama for a well-paid position as head of what Blagojevich calls a "private foundation," but in context meant a nongovernmental charity. (see pp. 57ff). Historians of philanthropy will no doubt recall that the alleged use of charities as lucrative way-stations for politicians between posts was a factor in the enactment of the extensive tax reforms in 1969 that gave us much of the present law regarding so-called private foundations and public charities.