Audit says EBR Council on Aging may have broken state, federal election laws

The East Baton Rouge Council on Aging used public funds and resources throughout much of 2016 to campaign for a dedicated property tax—an apparent violation of state and federal law that could jeopardize the nonprofit organization’s tax-exempt status, according to a long-awaited Louisiana Legislative Auditor’s report released this morning.

The audit details several potential violations of state and federal election law by COA management and staff in the months leading up to the Nov. 8 election for the 10-year, 2.25-mill property tax, which voters narrowly approved and is estimated to generate nearly $8 million a year for the COA.

Though many of the violations have been previously alleged and reported on, the audit is the first official confirmation from a governmental entity that the COA engaged in apparent wrongdoing, whether intentional or not.

Among the findings, the audit says:

COA management and staff spent work hours and used work-related resources such as email accounts to operate the Support Our Seniors political action committee, which campaigned for the tax.
Nearly $25,000 in revenues from political ads placed in the COA’s quarterly magazine were donated to the PAC.
The COA used the agency credit card to pay for some $15,000 of the PAC’s campaign expenses.
Additionally, the audit says the COA used its U.S. Postal Service nonprofit postage permit to mail more than 34,000 pieces of mail for the PAC at a discounted rate. The COA has previously acknowledged this was a mistake and has reimbursed the U.S Postal Service some $1,450. The audit found the discount actually came to nearly $3,700.

In a published response to the audit findings, COA’s attorney Murphy J. Foster III says the agency’s management did not intentionally violate campaign finance laws but, rather, did not fully understand what was legally permissible.

“The COA received very little in the way of advice as to what could and could not, what should and should not be done for or in the name of the PAC,” Foster writes. “Unfortunately, the legal nuances of permitted and prohibited dealings were never fully explained to the leadership at the COA such that all the t’s would be crossed and i’s dotted … in maintaining the relationship (as well as the distance) between the two entities.”

Foster does not say in the response where the advice should have come from, but mentions that political consulting firm Ourso Beychok initially “pitched” the COA in early 2016 on hiring it to handle the tax campaign and helped the COA form the PAC. He notes that COA never contracted with Ourso Beychok to manage the campaign, but suggests COA management thought the firm was helping with the campaign pro bono.

“Given that this was the COA’s first and only foray into the political arena and first and only dealing with the concept of a PAC, the leadership and the agency should have been better informed and advised on the nuances of campaign finance law,” Foster says.

It is unclear whether any state or federal charges will be filed against the agency, which has been at the center of controversy on multiple fronts since allegations surrounding the campaign first surfaced late last year.

See a summary of the audit, or the full report. Read Daily Report AM for more on this story, and check out a recent Business Report cover story on the COA.

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