Assets from scam trooper charity placed in receivership

The Texas Highway Patrol Association - a scam charity bilking donors by supposedly raising funds for the families of state troopers who died in the line of duty - has been basically wiped off the face of the planet in the wake of a settlement with the Texas Attorney General, we learn from a report at Texas Watchdog. Their assets have been placed in receivership and, according to the AG: "Under the settlement, donations that the defendants falsely solicited for the benefit of fallen troopers’ survivors will be distributed to the victims’ families."

I'd like to imagine that this blog played a small role in drawing attention to this scandal. Regular readers may recall that, just more than a year ago, Grits published a post titled "Of buzzards, road kill, charity scams and the Texas Highway Patrol Association," reacting to a solicitation call where the THPA misrepresented themselves as raising money for the "Texas Highway Patrol." That post received quite a bit of attention and led to an excellent investigative feature by the San Antonio Express-News, shining a lot more light on the subject. Then, in December of last year, the Attorney General "charged the defendants with illegally soliciting charitable donations, falsely claiming that donations to the organizations would benefit the survivors of fallen state troopers, and breaching their fiduciary duties as trustees of a charitable organization." (See the final judgment.) According to the AG:

The State’s enforcement action named the THPM, the Texas Highway Patrol Association (THPA), THPA Services, Inc. and several senior officials as defendants. Court documents filed by the State show that the defendants claimed to provide death benefits to slain law officers’ families and fund scholarships for state troopers’ family members. However, state investigators found that few survivors actually received any financial assistance, and many of the purported scholarship funds were awarded to children of THPM’s board members.

After the State filed its enforcement action, the court approved a receiver to take possession of the defendants’ assets and real property. Under the agreement, the defendants’ property will be liquidated and the proceeds will be allocated to surviving family members who never received the $10,000 benefit they were promised. Remaining proceeds will be donated to the Texas Department of Public Safety Foundation and the Department of Public Safety Historical Museum and Research Foundation, which will use these funds to fulfill donors’ original intent. The settlement also imposes civil penalties of more than $2 million.

The settlement also prohibits the individual defendants – Kenneth Lane Denton, Timothy Tierney and Steven Jenkins – from any future involvement with non-profit or for-profit organizations related to law enforcement. Defendant Ruben Villalva Jr. and other former board members were also ordered to comply with similar restrictions.

I'm glad to see this, but there are quite a few other organizations engaged in similar fundraising schemes, though perhaps not all as brazenly as THPA. A common denominator among the groups, though, are phone solicitation programs where the majority of money raised goes into fundraising instead of program-related work. We know that because they're required to register and report their fundraising to the Texas Attorney General.

For instance, a Florida-based group called the American Association of State Troopers (with the dba name of "Texas Trooper Members") raised $3,849,403, spending $3,244,673 on phone solicitation in FY 2010, according to their required filing with the AG. Their phone solicitor is a company called Xentel, Inc...

Similarly, according to group's FY 2010 filing (pdf) with the AG, the Texas State Troopers Association that year raised $3,453,785, spending $2.7 million of that on paying an Irving-based phone solicitor called "Statewide Appeal."

The Texas State Lodge, Fraternal Order of Police in 2010 raised $421,264, spending $328,924 on phone solicitations, according to their 2011 filing, using phone solicitors Southwest Public Relations and a group out of Utah ironically named "Corporation for Character."

In 2009, the Texas Police Chiefs Association raised $399,580 in contributions, paying $290,249 to phone solicitor Xentel and another based in Houston called "Public Safety Services," according to their filing for that year (2010 data isn't available online).

Also in 2009, a group called the "Coalition of Police and Sheriffs" (COPS) based in Katy Texas (see their filing) raised $170,000 in contributions and spent $136,000 on phone solicitors at South-West Public Relations and PJR, Inc..

Each of these strike Grits as spending far too much of their public contributions on fundraising to qualify as legitimate charities. On First Amendment grounds, I doubt it's legally feasible for the Legislature to ban such solicitations. But I find the practice creepy and gross, and I'm glad the AG at least cracked down on THPA, which was perhaps the most flagrant of the lot. As Grits wrote last year, THPA's efforts were "as much about helping troopers as buzzards are about helping roadkill," and they're not the only ones profiteering off the public's understandable sympathy and support for law enforcement.