From the Winter
2000 Watchdog Report
Charity Accused of Lying
American Indian Relief Council (AIRC), AKA National Relief
Charities, and codefendants last year entered into a $395,000
consent agreement with the Commonwealth of Pennsylvania to settle
allegations that they intentionally exploited the plight of
Native Americans to obtain donationsand then used the contributions
to primarily benefit certain officers and directors of the charity,
according to Attorney General Mike Fisher.
The state accused the charity of using false claims
in its mail solicitations during July 1991 to December 1993. A.G.
Fisher, in a news release last June declared: We contend that
this organization's intent was to deceive potential donors and play
on every human emotion imaginable to extract dollars. Consumers
were told that Native Americans, on several South Dakota reservations,
were suffering from widespread famine and other life threatening
conditions that we determined either never existed or were greatly
In the consent agreement AIRC and its codefendants
admitted no wrongdoing but are required to:
1) Pay $350,000 in restitution, $15,000 in civil
penalties, and $30,000 for the cost of the attorney generals
2) Maintain an autonomous board of directors, and
3) Maintain AIRCs existing level of program
services benefiting Native Americans in South Dakota, in addition
to the restitution mandated.
AIRC President Brian J. Brown told AIP that the consent
agreement speaks for itself and that AIRC continues its relief activities
in compliance with the agreement. He also said that it was nice
to win that case.
Mark Pacella, chief of the Attorney Generals
Charitable Trusts and Organizations Section, reported that AIRC
paid $175,000 of restitution after the agreement was signed last
summer. His office distributed the funds to relief programs in the
Pine Ridge, Rosebud and Cheyenne River Sioux Tribe reservations
in South Dakota. The distribution of the money falls within the
scope of AIRCs charitable purposes, Pacella said. The remaining
$175,000 in restitution is due this summer.
AIRCs direct mail solicitations did change
after the consent agreement, Pacella told AIP. Pacella added
that AIRC is doing a better job now. Our case in no small
measure contributed to this. A.G. Fisher in his office's June
release said, Our legal action has stopped this charity from
using half-truths and outright lies to obtain donations and has
resulted in increased funding for Native Americans living on three
reservations in South Dakota.
When asked about the term widespread famine
that A.G. Fisher said the charity used in solicitations that triggered
the Pennsylvania suit, Brown replied that its meaning depends on
the definition of hunger. When AIP pressed on other elements of
the agreement and AIRC's current operations, Brown ended the conversation,
saying, Im busy.
AIRC states in it IRS Form 990 that its primary purpose
is To focus public attention upon the needs, concerns, and
conditions of those people in need. This charity receives
an F grade from AIP because in our opinion in 1998 it
spent only 34% of its budget on program services and spent $62 to
raise each $100 of contributions.