MIA Facts Site

POW FOIA
Litigation:
Follow the Money

Summary.  One of the vestiges of the Vietnam era MIA issue is a long-standing Freedom of Information Act (FOIA) suit by one Roger Hall of Silver Spring, MD against the Central Intelligence Agency in which Mr. Hall alleges that the CIA is holding documents that prove US POWs were not released by the Vietnamese at the end of the war and the US government has covered up this fact.  He is suing the CIA to force release of these alleged documents.  Mr. Hall formed a not-for-profit, tax exempt organization to pursue his suit.  Tax returns filed by not-for-profit organizations are public documents and, in April 2003, I requested from Mr. Hall copies of the last three years' of his organization's tax returns.  The returns reveal some facts about his organization's finances that perhaps he does not want to be public knowledge.

What is this about?

Rather than trying to explain Hall's FOIA suit against the CIA, let me quote from Hall's web site, www.powfoia.org.  The following material was copied directly from Hall's site on 18 May 2003

QUOTE

Background and Some Updates

For years POW/MIA activists and Veterans said the CIA should be taken to court to obtain withheld POW/MIA information. That has now happened. A Freedom Of Information Act (FOIA) Civil Action, No. 98-1319 PLF, was filed in U.S. District Court for the District of Columbia on May 28, 1998.  Following numerous motions by Plaintiff Roger Hall for the case to go to trial the defendant CIA asked for Summary Judgement, the dismissal of the case. The case is before Judge Friedman.

The CIA is in violation of Executive Order 12812 issued by former President George H.W. Bush in 1992, Presidential Decision Directive (NSC 8) issued by President Clinton, and the Freedom of Information Act. The Executive Order of President Bush required the release of all POW/MIA documentation except for matters of national security, sources and methods; President Clinton's Decision Directive put a deadline of Veterans Day 1993 on President Bush's Executive Order.

The CIA has acknowledged: Over 500 documents have been withheld for national security reasons; 40,000 pages released by the Senate Select Committee POW/MIA Affairs in 1993 were still classified by the CIA. The CIA has even withheld the identification of the above documents by name, number, or description. This is only part of what we seek, the CIA still withholds additional POW/MIA documents they have not yet admitted to. We have the evidence. We also have witnesses and asked the U.S. District Court to allow us to take discovery to identify the POW/MIA information and require the CIA to expand its document search. On August 10, 2000 the U.S. District Court for the District of Columbia refused to dismiss the CIA's case and revealed in a court order that the CIA had information on the last known location of a live POW/MIA.  The information on the last known location was being withheld under the McCain Privacy Act.   That obstacle must now be overcome.  On the down side the court refused to allow depositions, it is to early in the case for depositions, we will reapply.

The POW/MIA FOIA Litigation Account was established to collect funding for legal costs and expenses for a Freedom Of Information Act lawsuit against the CIA. The case seeks POW/MIA documentation that agency has avoided, hidden and withheld from declassification and release. In September 1998 the POW/MIA FOIA Litigation Account was formed as a nonprofit organization and obtained permission to operate as an IRS 501 (C)(3) tax exempt organization. The corporation was formed to obtain donations to prosecute this case free from taxation.  To date the case has been funded by donations from the public.

On August 10, 2000 the court revealed that the CIA had documentation on the last known location of at least one live POW and ordered the CIA to expand its search for additional POW/MIA documentation including satellite imagery. The identy/identities of the last know alive have not been revealed. We are pursuing to overcome the CIAs obstacles to this. The court also allowed the CIA to withhold some POW/MIA documents under the covert operations protection of the National Security Act of 1947, and some for other reasons of national security. The CIA then imposed a $10,000 search fee before they would perform the search. This was appealed.

On July 22, 2002 the U.S. District Court ordered that the $10,000 search fee be paid. This required fee will be paid by the August 26, 2002 deadline while we continue to seek our rightful fee waiver. This allows the case to continue for the additional POW/MIA documents the CIA hides along with our efforts for the denied documents.

We could really use some financial help. Many people expect these documents to be automatically declassified, that will not happen, and that is why a law suit was filed. Although no one associated with the POW/MIA FOIA Litigation Account gets paid -- legal expenses contue. Donating allows you to participate in uncovering the truth on abandoned POW/MIAs and this will lead to the return of survivors.

Be part of the solution -- Some Still Survive.

END QUOTE

And there you have it, folks.  Mr. Hall's explanation of what he is doing.   The fundamental flaw in his argument is that there were no US POWs abandoned after the Vietnam War, thus, there are no documents to prove that what did not happen happened.    Still, he persists.

Follow the money

After I retired from the Army in 1995, I became the executive director of a not-for-profit organization that worked in the poorest counties of Central Appalachia repairing and building homes for very low-income families.  I learned a lot about how not-for-profit organizations function, about donations, and about accounting for funds in a not-for-profit agency.

501c(3) organizations and IRS Form 990

Congress recognized a long time ago that charitable organizations really do accomplish good work -- work that in many cases would have to be assumed by federal, state, or local government if the charitable organizations did not exist.  To encourage charitable organizations, Congress and the IRS established the concept of not-for-profit organizations and exempted these organizations from paying taxes.

The most common not-for-profit (also called "non-profit") agencies are churches -- churches do social relief work that  government cannot afford to do.  Ditto for various other organizations such as community action agencies, homeless shelters, community development corporations, and the like. 

Responding to Congressional interest in encouraging such organizations, the IRS established section 501.c.(3) of the IRS code that says -- in abbreviated form -- if an organization is established to not make a profit, and if the organization is doing certain types of social welfare work, that organization will be tax exempt -- provided the organization meets certain tests.

While 501c(3) organizations do not pay taxes, they are required to file a tax return with the IRS -- the IRS Form 990.  Also, 501c(3) organizations are required by the IRS to give to anyone who asks the last three years' of their tax returns.  Some organizations post their 990's on their website, others require a requestor to send a letter asking for the 990's.

Now -- the preceding is a quick once-over of 501c(3) organizations -- if you want to learn more, go to your favorite search engine and search for "501c(3)," "non-profit," "not-for-profit" -- you can find the details

Roger Hall's 990's

In April 2003 I requested that Mr. Hall send to me copies of the last three years' Form 990 for the "POW/MIA FOIA Litigation Account."  I  received a response from "Studies Solutions Results, Inc.; C/O Roger Hall; PO Box 8044;  Silver Spring MD 20907-8044."

Mr. Hall responded quickly -- he sent the copies to me via certified mail, return receipt requested.

The following are my comments after reviewing Hall's 990's.  Remember -- I served almost five years as the director of a 30-year-old, church-related non-profit with an annual budget in the range of $6,000,000.00.  I know a little something about:   990's; fund raising; reporting requirements; and, non-profit management.

Let's look at the tax returns for Roger Hall's "POW/MIA FOIA Litigation Account."

Cash, Savings, and Investments

The following information is taken from Line 22 -- Cash, savings, and investments of the POW/MIA FOIA Litigation Account tax returns (IRS Form 990) for the years indicated.  To view the front page of these forms, go to the individual year's tax return page -- click here for links to images of the first page of each return.

Tax year Cash, savings, and investments (Line 22, IRS Form for the indicated year)
  At beginning of year At end of year $ increase % increase
2000 $17,487 $30,226 $12,739 +72%
2001 $30,226 $45,710 $15,484 +51%
2002 $45,710 $54,138 $8,428 +18%
         
2000 - 2002 $17,487 $54,138 $36,651 +209% (average 69.8% per year)

Not bad.  Not bad at all.  But -- something is puzzling about these figures.   Mr. Hall is constantly asking for donations.  On many of the "MIA activist" web sites one finds appeals from Hall for money to support his research and legal expenses.  Yet, we find the cash balance for his organization increasing each year by healthy amounts while his research and legal expenses -- see below -- are quite low -- in fact, the only legal fee he paid is the $10,000 fee that the court ordered him to pay.

Please click on the links to the individual year 990's where you will find that -- for the three years reviewed here -- an average of 47 percent of the donations to his organization has gone to increase the cash balance of the organization.  That is, while he is appealing for funds to pay his legal fees, he is, in fact, using donations to build up his bank balance.

Expenses

The IRS requires that 501c(3) organizations report certain expenses and expenses that exceed certain levels.  These expenses are reported on Supplemental Schedules for each tax year.  I did not scan and post Hall's expenses for 2000 - 2002 but here they are.

Expenses reported on Supplemental Schedules, tax years 2000-2001-0220
for the
POW/MIA FOIA Litigation Account

Expense category 2000 2001 2002
Accounting $923 -- --
Legal $347 -- --
Legal research (1) -- -- $10,000
Research -- $60 --
Supplies $5,687 $1,342 $2,319
Bank service charges $22 -- $139
Meeting expense $65 -- $25
Auto & truck $57 -- --
Rental $259 -- --
Amortization $100 $100 $100
Telephone $789 $1,155 --
Travel $455 $173 --
Miscellaneous $354 $135 $844
Personal property tax $7 --- --
Fundraising -- $7,705 $7,732
Licenses and permits -- $50 $50
Postage and freight -- -- $547
Printing -- -- $102
Website expenses -- -- $265
Total expenses reported on Supplemental Sheet $9,605 $10,720 $22,123

(1) See the material quoted from Hall's web site -- he paid this $10,000 only because the court ordered him to do so.

Fundraising expenses

Not-for-profit organizations must get their money from somewhere.  Some agencies operate such revenue producers as thrift stores, flea markets, and other operations that produce funds for the organization.  All not-for-profits solicit donations.  

Fund raising can be a big business.  There are very large and wealthy organizations that have made fund raising into a science.  I will not go into the details here but, if you want to raise money via donations, you can do it yourself, or, you can hire a fund raising professional -- who can be anyone from a free-lancer who operates on a shoestring to a sophisticated fund raising organization that raises really big money and charges fees to do so.

A rule of thumb among fund raisers is that the fund raiser should turn over to the not-for-profit at least 80 percent of what is raised.  I have seen some operations -- several of them involved in the MIA issue -- in which the fund raiser kept 70 to 80 percent and gave the remainder to the cleint -- the not-for-profit.  One such organization was "Operation Rescue" run by retired Air Force Colonel Jack Bailey -- his fundraiser gave him 10 to 20 percent and kept 80 to 90 percent -- all the while Bailey was asking for donations to help him run operations to find and free US POWs in Southeast Asia.

Another MIA "activist" who has done well from fund raising based on the Vietnam War MIA issue is Ted Sampley of Kinston, NC.    Sampley created a self-contained financial network that revolved around POWs and MIAs. One of Sampley's companies, Red Hawk, manufactured T-shirts and sold them to his nonprofit Homecoming II, which in turn sold them at the organization's "vigil booth" on the Mall in DC.    Although Sampley could say he was destitute, with only one personal bank account containing $100, the organizations were quite healthy. His reported earnings from the cash-only T-shirt concession amounted to nearly $2 million over three years.

Mr. Hall has not pushed fund raising to these limits, but he seems to be catching on.   Let's look at some figures and examine how much he spent of fund raising and how much he raised, as revealed in his Form 990's.

Tax year Fundraising expenses Amount raised % of fundraising costs that went to raising funds % of donations that went to increase cash on hand this year
2000 $0.00 $26,047.00 0 49% ($12,739)
2001 $7,705.00 $26,812.00 29 % 58% ($15,484)
2002 $7,732.00 $38,030.00 20 % 22% (8,428)

There is almost no data here with which to analyze his fund raising efficiency; also, he does not identify how and where the fund raising expenses were spent.  

In the first year that he began to spend money on fund raising, it appears to have made no difference in the amount of funds raised.  That is,  Hall went from spending nothing on fund raising in 2000 to spending $7,705 in 2001 -- with almost no increase in the funds raised.  However, look at the next year -- a fairly substantial increase in the amount raised.  Also, in tax year 2002, his fundraising efficiency increased.  This is a normal development -- in the first year of a serious fund raising campaign, no one expects to make much money.  In fact, most professional fund raisers expect a loss in the first year because that year is devoted to testing appeals, devising and revising the appeals, and generally getting started.

Here is what I notice from these figures:

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No identification as to where the fund raising expenses are going.   Are they purchasing T-shirts from Ted Sampley, or, are they carrying out a professional fund raising plan?

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In each year for which I have records, a large portion of the funds raised goes to increase the organization's cash on hand at the end of the year, not to provide more services.

There is one other angle that needs to be mentioned here.  The IRS is quite interested in whether or not the non-profit organization has family members on its board and if the organization has contracted with organizations owned by family members.   

Let me explain this with some real-life examples.

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Suppose you form a non-profit agency to provide job training in low and very-low income neighborhoods.  You receive one or more federal, state, or local grants for your program.  Your wife forms a company named "Training Partners, Inc." and your organization signs a contract with her company by which her company conducts training for your non-profit and your non-profit pays her company a nice amount of money. 

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Or, suppose your brother-in-law forms a fund raising company and your non-profit contracts with him to conduct your fund raising.

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Or, your sister could form a computer management company and your non-profit could contract with her company to install and maintain your computers and your office network.

As you see, the opportunities for corruption are many.  You contract with friends or relatives for services, pay them inflated contracts, and they and you make out like bandits using donated funds or grant money.

Not that there is evidence that Mr. Hall is doing this - - but it's not unheard of.

Officers of the organization

The Form 990's list the following officers and directors of the POW/MIA FOIA Litigation Account:

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Mike Benge, 1st Vice-President and Secretary.  Benge was a USAID officer in Vietnam; he was captured and released at Operation Homecoming.

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Wayne Sill, 2nd Vice-President and Treasurer.  I don't know Mr. Sill.

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Roger Hall, CEO and Director.

One more comment

One other matter needs to be mentioned here, though it does not relate to Mr. Hall's finances.  Go back and read the paragraphs that I snipped from his website and note this sentence:

. . . On August 10, 2000 the U.S. District Court for the District of Columbia refused to dismiss the CIA's case and revealed in a court order that the CIA had information on the last known location of a live POW/MIA. . .

When Hall learned during a court hearing that the name of one POW was in some of the documents he was seeking, he quickly got on the various MIA "activist" websites, spreading this information and asking for donations.   Stop for a minute and think about this.  Hall alleges that the CIA has thousands of doucments that report and record intelligence information collected during the Vietnam War that identify US POWs.

At Operation Homecoming in February-March 1973, 591 US POWs were released.   Another 100-plus Americans were captured during the war and either escaped or were released during the war.  Another 65 died in captivity.  That's around 750 Americans who were captured by the Vietnamese or their Lao or Cambodian allies.   Because information about captured Americans was one item of information that the CIA was charged with collecting during the war, why would anyone be surprised if their files contained documents that located or identified one or more POWs?  Note that Mr. Hall's comment does not mention the date of this alleged CIA information - - he's excited about information on the whereabouts of a US POW during the war?

Mr. Hall's analytical abilities amaze me.

So what?

So, what do we learn from the tax returns filed by the POW/MIA FOIA Litigation Account?  Not much, though there are a few points that need to be reiterated.

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While Mr. Hall solicits donations to pay his legal expenses, he is actually using the bulk of the money coming into the organization to build up cash reserves.  Which raises the question of what happens to the cash when the organization disbands?

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Hall went from spending nothing on fund raising to spending over $7,000.00 per year with only slight increases in donations.  Either his fund raising is not especially effective, or, he has a sweetheart deal with a fund raiser as a way of passing funds to someone.

That's about all.  The next time you feel moved to donate to Mr. Hall's cause, you may want to consider if you want your donations to go to increasing his bank account or to doing some good.  My advice:  Donate to your church, to a local food pantry, or to Habitat for Humanity.

 

Tax return for 2000 Tax return for 2001 Tax return for 2002