Char­ity pri­vately paid Roy Moore

Ala. Se­nate hope­ful said he took no ‘reg­u­lar salary,’ but earned $1 mil­lion-plus

The Washington Post - - FRONT PAGE - BY SHAWN BOBURG AND ROBERT O’HAR­ROW JR.

For­mer Alabama judge Roy Moore, a Repub­li­can can­di­date for U.S. Se­nate, once said pub­licly that he did not take a “reg­u­lar salary” from the small char­ity he founded to pro­mote Chris­tian val­ues be­cause he did not want to be a fi­nan­cial bur­den.

But pri­vately, Moore had ar­ranged to re­ceive a salary of $180,000 a year for part-time work at the Foun­da­tion for Moral Law, in­ter­nal char­ity doc­u­ments show. He col­lected more than $1 mil­lion as pres­i­dent from 2007 to 2012, com­pen­sa­tion that far sur­passed what the group dis­closed in its pub­lic tax fil­ings most of those years.

When the char­ity couldn’t af­ford the full amount, Moore in 2012 was given a prom­is­sory note for back pay even­tu­ally worth $540,000 or an equal stake of the char­ity’s most valu­able as­set, a his­toric build­ing in Mont­gomery, Ala., mort­gage records show. He holds that note even now, a char­ity of­fi­cial said.

A Washington Post re­view of pub­lic and in­ter­nal char­ity doc­u­ments found that er­rors and gaps in the group’s fed­eral tax fil­ings ob­scured un­til now the com­pen­sa­tion paid to Moore, whose de­feat last month of Pres­i­dent Trump’s choice for Repub­li­can nom­i­nee in

Se­nate race likely will em­bolden far-right chal­lengers to the party’s main­stream in­cum­bents. Moore is the front-run­ner in the race to fill the seat va­cated by At­tor­ney Gen­eral Jeff Ses­sions.

The char­ity helped Moore thrive — fi­nan­cially and oth­er­wise — after his ouster from the state’s Supreme Court in 2003 for re­fus­ing to re­move a Ten Com­mand­ments mon­u­ment from the court­house. The group has filed scores of le­gal briefs in cases in­volv­ing con­ser­va­tive Chris­tian is­sues, but it was in many ways built around Moore him­self.

At a time when Moore was run­ning for other pub­lic of­fices in Alabama, the char­ity kept him in the pub­lic eye and helped es­tab­lish a na­tion­wide net­work of donors while he took on con­tro­ver­sial po­si­tions against same-sex mar­riage, Is­lam and the sep­a­ra­tion of church and state. Over the years it has pro­vided him with health-care ben­e­fits, travel ex­penses and a body­guard, doc­u­ments show.

The Foun­da­tion for Moral Law’s web­site rou­tinely pro­moted Moore’s speak­ing en­gage­ments and his book, “So Help Me God: The Ten Com­mand­ments, Ju­di­cial Tyranny, and the Bat­tle for Re­li­gious Free­dom.” In his last two years as pres­i­dent, as fundrais­ing dwin­dled, Moore’s com­pen­sa­tion amounted to about a third of the con­tri­bu­tions to the group, tax fil­ings show.

The char­ity has em­ployed at least two of Moore’s chil­dren, al­though their com­pen­sa­tion is not re­flected in tax fil­ings. Moore’s wife, Kayla, who is now pres­i­dent, was paid a to­tal of $195,000 over three years through 2015.

Moore’s char­i­ta­ble and po­lit­i­cal ac­tiv­i­ties have also over­lapped in sig­nif­i­cant ways. The for­mer long­time ex­ec­u­tive direc­tor of the char­ity now serves as Moore’s cam­paign man­ager. The char­ity re­tained the same fundrais­ing firm used by three of Moore’s most re­cent cam­paigns for state of­fice, pub­lic records show.

An In­ter­nal Rev­enue Ser­vice au­dit of the Foun­da­tion for Moral Law’s 2013 fi­nances, pro­vided by the char­ity, con­cluded that it left out in­for­ma­tion about fundrais­ing and other ac­tiv­i­ties on its pub­lic tax fil­ings and also iden­ti­fied dis­crep­an­cies be­tween those fil­ings and its in­ter­nal books. The IRS wrote that the is­sues “could jeop­ar­dize your ex­empt sta­tus.”

Seven char­ity and tax law spe­cial­ists con­sulted by The Post said the non­profit group’s ac­tiv­i­ties raised ques­tions about com­pli­ance with IRS rules, in­clud­ing pro­hi­bi­tions on the use of a char­ity for the pri­vate ben­e­fit or en­rich­ment of an in­di­vid­ual.

“The big­gest is­sue is the ben­e­fit to Roy Moore,” said Paul Streck­fus, a for­mer tax lawyer at the IRS and editor of the EO Tax Journal, when told of The Post’s find­ings.

In in­ter­views with The Post, Alabama Cir­cuit Court Judge John Bent­ley, a long­time mem­ber of the char­ity’s board and its for­mer chair­man, de­nied that the Foun­da­tion for Moral Law served Moore’s per­sonal or po­lit­i­cal goals. He said the group’s of­fi­cials did not in­ten­tion­ally do any­thing wrong.

But he said that he could not fully ex­plain in­con­sis­ten­cies in au­dits and pub­lic tax fil­ings, and that he and other board mem­bers did not pro­vide enough over­sight. He ac­knowl­edged the non­profit was es­sen­tially run by Moore and his fam­ily.

“That’s my fault,” he said. “I should have been a lot more ac­tive than I was.”

Roy and Kayla Moore did not re­spond to in­ter­view re­quests. Kayla Moore pro­vided an­swers to de­tailed ques­tions in a state­ment, and the char­ity gave The Post in­ter­nal doc­u­ments to clar­ify why Moore re­ceived the prom­is­sory note. The agree­ment that he would re­ceive com­pen­sa­tion of $180,000 a year, de­scribed in those doc­u­ments, has not been pre­vi­ously re­ported.

‘Ten Com­mand­ments Judge’

A year after his elec­tion to the state Supreme Court in 2000, Moore drew national at­ten­tion and con­tro­versy for in­stalling a 2.6-ton mon­u­ment of the Ten Com­mand­ments in the court’s build­ing. His ouster from the bench in 2003, after he re­fused to obey a fed­eral court rul­ing to re­move the mon­u­ment, made him a hero among some evan­gel­i­cal Chris­tians.

As he fought against lit­i­ga­tion to move the mon­u­ment, friends and al­lies cre­ated an or­ga­ni­za­tion they called the Roy Moore Le­gal De­fense Fund and be­gan rais­ing money. The or­ga­ni­za­tion’s first ap­pli­ca­tion to be rec­og­nized as a char­ity was re­jected in 2004 be­cause the IRS de­ter­mined that it “op­er­ated for the ben­e­fit of pri­vate in­ter­ests.”

The group re­named it­self the Foun­da­tion for Moral Law and broad­ened its mis­sion, say­ing it would pro­mote the idea that “our rights are given to us by our Cre­ator.” The fol­low­ing year, the IRS ap­proved it as a tax-ex­empt 501(c) (3) pub­lic char­ity, al­low­ing con­trib­u­tors to deduct do­na­tions.

Moore be­came its chair­man and trav­eled the coun­try, giv­ing speeches and mak­ing me­dia ap­pear­ances. He re­ceived no com­pen­sa­tion at first, al­though the char­ity pro­vided health in­sur­ance and cov­ered travel ex­penses. The or­ga­ni­za­tion also gave him VIP-level se­cu­rity, pay­ing for bul­let­proof vests and a body­guard, a mar­tial arts ex­pert and cousin of for­mer heavy­weight box­ing cham­pion Evan­der Holy­field, records show.

“Judge was trav­el­ing the coun­try speak­ing. He needed pro­tec­tion due to threats,” Kayla Moore said in her state­ment to The Post.

Po­lit­i­cal ob­servers con­sid­ered the non­profit a show­case for the for­mer judge.

“It was a plat­form for Roy Moore to ad­vance him­self on any pos­si­ble front, whether it was po­lit­i­cal or or­a­tor­i­cal,” said Wil­liam Stewart, a pro­fes­sor emer­i­tus of po­lit­i­cal sci­ence at the Univer­sity of Alabama and a long­time ob­server of Moore’s ca­reer.

Join­ing Moore at the non­profit were two other state Supreme Court em­ploy­ees who also lost their jobs over the mon­u­ment con­tro­versy. One of them, Richard Hob­son — now Moore’s cam­paign man­ager in the Se­nate race — be­came the char­ity’s pres­i­dent. Moore’s daugh­ter, Heather, be­came its receptionist.

In an in­ter­view, Bent­ley, the board mem­ber, played down the hir­ing of Moore’s fam­ily mem­bers, de­scrib­ing them as “cheap la­bor.” He said he did not know ex­actly how much they were paid.

With do­na­tions pour­ing in — more than $1.5 mil­lion in 2005 — the char­ity bought a pre-Civil War of­fice build­ing in downtown Mont­gomery for $546,000 and be­gan ren­o­va­tions cost­ing hun­dreds of thou­sands more, records show.

The char­ity hired the Richard Nor­man Com­pany, a fundrais­ing firm in Vir­ginia that raised money for con­ser­va­tive can­di­dates. Months later, as Moore launched a cam­paign for Alabama gover­nor, he turned to the firm for his po­lit­i­cal fundrais­ing as well, draw­ing donors from across the coun­try.

In an in­ter­view, founder Richard Nor­man said his firm kept the char­i­ta­ble and po­lit­i­cal op­er­a­tions sep­a­rate. But he ac­knowl­edged that in both con­texts Roy Moore’s de­fi­ance of the fed­eral gov­ern­ment was a cen­tral sell­ing point.

“He's known as ‘ The Ten Com­mand­ments Judge,’ ” he said. “That story was an im­por­tant part of ev­ery fundrais­ing ap­peal we did.”

Moore lost the race.

Un­usual pay­ment plan

In 2007, Moore be­came the char­ity’s pres­i­dent, com­mit­ting him­self to 20 hours a week, ac­cord­ing to tax fil­ings. Board mem­bers agreed to pay him; the ques­tion was how much. They con­sid­ered a fig­ure as high as $500,000 an­nu­ally, ac­cord­ing to an in­ter­nal let­ter the char­ity pro­vided to The Post.

On March 5, they de­cided to follow Moore’s lead. “Judge Moore has rec­om­mended a salary of $180,000,” Bent­ley, then the chair­man, wrote to other board mem­bers.

They agreed to pay him in an un­usual way. Moore would be paid what­ever speak­ing fees and do­na­tions to the char­ity he could gen­er­ate through what was called “Pro­ject Jeremiah,” the group’s min­istry to pas­tors and preach­ers. But he was guar­an­teed $180,000 a year un­der the agree­ment, with the char­ity mak­ing up the dif­fer­ence if Pro­ject Jeremiah rev­enue fell short. If the char­ity did not have the cash in a given year, the debt to Moore would ac­cu­mu­late.

The Foun­da­tion for Moral Law cre­ated a sep­a­rate bank ac­count and ear­marked do­na­tions to “Pro­ject Jeremiah” specif­i­cally for Moore, Bent­ley said.

“This is a very im­por­tant pro­ject to re­store a proper un­der­stand­ing of God to the preach­ers of our land, but I need your help!” Moore wrote in 2007 in a per­sonal fundrais­ing mes­sage about “Pro­ject Jeremiah” on the char­ity’s web­site. “My re­sources are lim­ited.”

The salary agree­ment and “Pro­ject Jeremiah” were not dis­closed in the char­ity’s tax fil­ings that year. Moore’s com­pen­sa­tion was re­ported as $105,500.

The char­ity’s de­scrip­tions on pub­lic doc­u­ments of its pay­ments to Moore var­ied greatly. In some years, in­clud­ing 2007, he was de­scribed as an out­side le­gal con­trac­tor, tax fil­ings show, and in oth­ers he was paid as pres­i­dent. His re­ported com­pen­sa­tion ranged from $55,392 to $105,500 — and not un­til 2012 did the fig­ure match the $180,000 the board had agreed to pay him.

Martin Wish­natsky, a spokesman for the char­ity, said Moore was never a le­gal con­sul­tant, de­spite the state­ments in tax fil­ings.

“Judge Moore never re­ceived sep­a­rate amounts for ‘ le­gal work,’” Wish­natsky said in a state­ment. “That de­scrip­tion was a short­hand for the ser­vices he pro­vided to the Foun­da­tion that in­cluded over­all su­per­vi­sion, ed­u­ca­tional pro­grams, and par­tic­i­pa­tion in pre­par­ing am­i­cus briefs on re­li­gious lib­erty and re­lated is­sues.”

IRS iden­ti­fies prob­lems

By 2011, at­ten­tion to Moore’s mon­u­ment bat­tle was wan­ing. Do­na­tions to the Foun­da­tion for Moral Law were in a nose-dive, down by al­most two-thirds from 2005. But the board stood by its pledge to give Moore $180,000 in com­pen­sa­tion each year.

On Feb. 17, doc­u­ments show, the board con­vened for an an­nual meet­ing in Gads­den, Alabama. There was only one item on the agenda: how to pay Moore for “ar­rear­ages of salary dur­ing the past four (4) years,” ac­cord­ing to the board’s record of the meet­ing.

Lack­ing the abil­ity to pay him cash, the board agreed to give Moore a prom­is­sory note worth $393,000 that Moore could cash in on de­mand, doc­u­ments show. The board backed up its prom­ise with a sec­ond mort­gage on the char­ity’s his­toric build­ing. In ef­fect, the board was giv­ing him the op­por­tu­nity to fore­close on its head­quar­ters to col­lect what he was owed. It also autho­rized Bent­ley to in­crease the amount owed to Moore as needed.

Among the nine mem­bers on the board was Kayla Moore, who re­cused her­self from the vote.

Later that year, while giv­ing an opening state­ment on be­half of the char­ity in a le­gal dis­pute with a tele­mar­ket­ing com­pany, Moore played down his fi­nan­cial ar­range­ments.

“My salary does not come by way of a reg­u­lar salary from the Foun­da­tion, but through a spe­cial pro­ject that I run so that I don’t in­hibit the Foun­da­tion,” he told a jury in Au­gust, ac­cord­ing to a tran­script of the hear­ing in fed­eral court in Ohio.

In De­cem­ber 2011, Bent­ley agreed to in­crease the amount of debt to Moore, an­chored by the mort­gage, to $498,000, records show.

The back-pay ar­range­ment was not dis­closed to the IRS on an­nual tax fil­ings un­til Nov. 14, 2012, one week after Moore won an elec­tion to re­turn to Alabama’s Supreme Court. The tax fil­ing, cov­er­ing 2011, said he had been paid $393,000 in “re­tire­ment or other de­ferred com­pen­sa­tion,” re­flect­ing the amount in the original note, al­though mort­gage records show the higher fig­ure.

For 2012, Bent­ley bumped up the in­debt­ed­ness to $540,000, mort­gage doc­u­ments show. On tax fil­ings for that year, the char­ity said he was paid $138,000 in “re­portable” com­pen­sa­tion and $42,000 in “other” pay — for the first time re­flect­ing the $180,000 to­tal he was to re­ceive each year un­der the agree­ment.

Moore’s full $180,000 com­pen­sa­tion should have been dis­closed each year, whether it was paid to him or ac­cu­mu­lated as debt, said Mar­cus Owens, who led the tax-ex­empt or­ga­ni­za­tions di­vi­sion at the IRS from 1990 to 1999.

“The treat­ment of the pay­ments to him re­ally is quite ir­reg­u­lar,” Owens said.

Eve Boren­stein, an ex­pert on non­profit tax law, said the an­nual tax fil­ings, known as a Form 990, are the pub­lic’s only way to know how char­i­ties are spend­ing do­na­tions and pay­ing their em­ploy­ees each year.

“If peo­ple do not re­port what is in­tended to have sun­light on it, there’s no point in hav­ing the form,” she said.

Of­fi­cials with the char­ity did not re­spond to ques­tions about why its tax fil­ings for the five years be­gin­ning in 2007 did not re­flect the board’s obli­ga­tion to pay Moore $180,000 a year.

Kayla Moore be­came the char­ity’s pres­i­dent when Moore re­turned to the Alabama Supreme Court in 2013, mak­ing $65,000 a year from 2013 to 2015. Roy Moore was kicked off the court for a sec­ond time last year for or­der­ing state judges not to honor a U.S. Supreme Court rul­ing al­low­ing same-sex mar­riage.

In Fe­bru­ary this year, the IRS con­cluded its au­dit of the char­ity’s 2013 fi­nances, ac­cord­ing to the doc­u­ments pro­vided to The Post. The IRS iden­ti­fied prob­lems that it said could threaten the group’s tax­ex­empt sta­tus if not re­solved.

The IRS wrote that the char­ity “did not iden­tify its spe­cial fundrais­ing ac­tiv­i­ties.” It also found that the group’s tax fil­ings con­tained fig­ures that “did not re­flect those recorded on your books of ac­count.” The doc­u­ment does not de­tail the ac­tiv­i­ties or fig­ures at is­sue.

In re­cent weeks, the Cam­paign Le­gal Cen­ter, a watchdog group in Washington, ac­cused the char­ity of openly pro­mot­ing Moore’s Se­nate cam­paign through a Face­book page ti­tled “Foun­da­tion for Moral Law.” Char­i­ties are pro­hib­ited by law from sup­port­ing or op­pos­ing po­lit­i­cal can­di­dates.

Kayla Moore said in her state­ment to The Post that the Face­book page “is not an of­fi­cial page of the Foun­da­tion for Moral Law.”

In an in­ter­view, Bent­ley said he could not ac­count for all of the gaps and in­ac­cu­ra­cies in tax fil­ings, au­dits and other doc­u­ments, in part be­cause he had de­voted so lit­tle time to over­see­ing the group’s fi­nances.

“I can un­der­stand why that would raise some con­cerns,” he said.

NATHAN MOR­GAN FOR THE WASHINGTON POST

Roy Moore, the Repub­li­can can­di­date for Se­nate from Alabama and a for­mer judge, col­lected more than $1 mil­lion from 2007 to 2012 from the Foun­da­tion for Moral Law for part-time work in an un­usual ar­range­ment with the foun­da­tion’s board.

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