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May 22, 2015

Cancer-Charities Case Shows Patchy Oversight of Nonprofits

A principal behind the four cancer charities targeted in a federal complaint earlier this week for allegedly bilking donors out of $187 million had been on state regulators' radars for decades, highlighting gaps in oversight of suspect nonprofits, writes The New York Times. All four groups were connected to James T. Reynolds Sr., who was charged with deceptive practices by Hawaii in the 1980s but kept moving from state to state, setting up new charities.

The unprecedented crackdown on the cancer groups involved the Federal Trade Commission, all 50 states, and the District of Columbia and was several years in the making. Watchdogs in and out of government tell the Times that regulatory indifference, a lack of political will, and a weakened Internal Revenue Service with little financial incentive to pursue cases against tax-exempt groups have frustrated efforts at joint action against charity scofflaws.