CRYSTAL LAKE – The Advantage Group abruptly withdrew its request for a $49,000 emergency payment from the McHenry County Mental Health Board last week because of allegations of illegal politicking, a board member revealed Tuesday evening.
The nonprofit agency that helps young adults with substance abuse problems was asked to withdraw its request because it was actively supporting political candidates on its Facebook page and hosted a luncheon for Republican sheriff's candidate Bill Prim, said McHenry County Board member Paula Yensen, D-Lake in the Hills. She holds the board's voting seat on the Mental Health Board.
Tax law forbids 501(c)(3) agencies from lobbying for or against political candidates.
Yensen, reading from a prepared statement at Tuesday's meeting, said she was coming forward because no explanation was publicly offered by either Board President Robert Routzahn or TAG Executive Director Pat Owens. The Mental Health Board was set at a Sept. 17 special meeting to authorize the payment for the struggling agency, but Owens during public comment tearfully removed the request.
The allegation is the latest trouble for The Advantage Group. Its funding was suspended last year by the Mental Health Board – itself facing controversy and upheaval – after an audit revealed numerous irregularities. The Advantage Group is also under investigation by the Office of the Inspector General at the Illinois Department of Healthcare and Family Services, which last October subpoenaed the Mental Health Board's records pertaining to it.
"Although I am confident that the services provided by TAG are of high quality and a benefit to our community, I cannot say I have the same confidence in the organization's management and board of directors," Yensen said. "The ongoing investigation of TAG by the OIG and these new revelations of possible tax code violations must give us all pause."
Yensen provided several screen shots of the agency's Facebook page supporting the Republican candidacies of Prim and County Board candidate Andrew Gasser, a blogger who is among the critics of the Mental Health Board's size and spending. The Advantage Group hosted the luncheon for Prim on Sept. 14. The Facebook page has since been removed.
The Advantage Group checked off on its most recent tax return filed with the IRS that it was not engaging in activities for or against candidates.
Online postings and hosting a political event run afoul of tax-exempt status, said Ryan Oberly, partner at Wagenmaker & Oberly, a Chicago law firm specializing in representing nonprofits.
"There's an absolute prohibition on intervening in political campaigns, such as activities for or against a particular candidate," Oberly said. "It goes way beyond funding a candidate."
Agencies that violate the rule are supposed to report it and pay an excise tax, Oberly said. The IRS can also impose the tax not only on the agency, but also on its executives and its board of directors.
Yensen, who is executive director of a nonprofit, said she brought the politicking issue in the days prior to the scheduled funding vote to the attention of Routzahn, who reached out to Owens. Yensen, like other members of the new board, supported the one-time payment to help keep TAG's doors open, but changed course when she learned of the possible legal issue.
Routzahn said he was presented with the information shortly before the Sept. 17 meeting, which is why he did not have time to inform other board members and discuss the issue. He said he wanted to give Owens the opportunity to withdraw the request instead of facing board backlash that has followed TAG throughout the year.
"It is perfectly fair to challenge me on my judgment ... but a decision had to be made in a very short time," Routzahn said. "The intent was really to not continue to drag someone through the mud."
Five of the seven current members of the Mental Health Board have been appointed this year. A shakeup of the County Board committee in charge of filling its seats has resulted in a majority seeking to rein in the Mental Health Board's long-criticized administrative size and spending.
•Northwest Herald reporter Jeff Engelhardt contributed to this report.