Can Pro-Business Charity Pay For Rail Lawsuit?12/27/2011
A vocal proponent of the Honolulu rail project has asked the IRS to look into alleged tax violations by a nonprofit suing to stop the train.
The head of the charity, Republican Hawaii Sen. Sam Slom, says the complaint is just the latest attempt to discredit rail opponents and that the lawsuit fits into his nonprofit organization's stated mission.
So, who's right? Civil Beat talked to a former IRS official who oversaw nonprofits. The bottom line: It'll be a good long time before we know for sure whether laws were broken, and the question ultimately hinges on whether Slom can draw a link between the lawsuit and his organization's charitable purpose.
How important is the lawsuit? Critical. Along with uncertainty about federal funding, it is the biggest hurdle for the $5.2 billion project. And the legal challenge can't proceed without funding.
In an online column last week, anti-rail mayoral candidate Panos Prevedouros criticized the project and suggested donations would make a great Christmas gift. He promised: "The lawsuit will stop the rail."