Former Cranston councilor shut down her nonprofit agency. Requests for donations continued.

CRANSTON – Facing allegations of mismanaging the nonprofit she started, Aniece Germain roiled the City Council in mid-April when she suddenly resigned from her seat as representative of Ward 2.

Germain alleged that the council’s president, fellow Democrat Jessica Marino, blackmailed her. She said Marino gave her an ultimatum: resign or be subject to public hearings on the allegedly unethical activities of a nonprofit agency that Germain presides over as executive director.

Marino has called the accusations “sensational, false and malicious,” but on Tuesday Rhode Island State Police confirmed the agency will investigate the circumstances surrounding Germain’s resignation.

Questions also linger about Germain’s organization, Hope and Change for Haiti. The IRS revoked the nonprofit’s tax-exempt status on May 15, 2022, for failing to file its annual tax return. Rhode Island’s secretary of state also revoked the organization’s nonprofit incorporation on Sept. 13, 2023, for failing to submit an annual report.

In her initial statement announcing her resignation Germain said it was due to a “consequential filing error.”

“Until now, the [certified public accountant] cannot give us an explanation as to what happened to the filing,” she told The Providence Journal via email.

In an interview with WPRI she also said the organization had stopped all fundraising, though it went ahead with a pre-planned gala. Campaign finance filings and social media posts indicate the organization received donations and continued calling for them after losing its tax-exempt status. At least in some cases, donors were not aware of it.

A glitzy gala that people had paid to attend

On Aug. 25, 2022, Hope and Change for Haiti hosted its third annual gala, a fundraising event at Rhodes on the Pawtuxet in Cranston. According to an archived screenshot of the event’s page, tickets began at $60 but attendees could choose to contribute more.

In an interview with WPRI, Germain explained the event had been planned a year in advance and that the organization was informed its status had been revoked after people had paid to attend.

In an email to The Providence Journal, Germain clarified that a letter from the IRS arrived in August informing her that the agency had revoked the organization’s tax-exempt status for failing to file taxes that year.

Among the guests at the gala was U.S. Rep. Seth Magaziner, then state treasurer, who spoke at the event, according to a Facebook post.

“Thank you to Hope and Change For Haiti for your incredible work advocating for immigrants’ rights in the U.S. and increasing access to education in Haiti. It was a pleasure to attend your 3rd Annual Engage for Change Gala Fundraiser this evening,” Magaziner wrote.

Magaziner was unaware of the organization’s tax status at the time, according to his head of communications, James Kwon.

Photos posted on Facebook also show that pamphlets were laid on the tables at the dinner that claimed Hope and Change for Haiti was a 501(c)3 organization, after it had lost its tax-exempt status. The pamphlets invited readers to join the organization as members or as donors.

It is unclear whether attendees were notified that their contributions were not tax deductible. It is also unclear how much money Hope and Change for Haiti raised or whether the organization returned donations.

In attendance, too, that night was Melissa Jenkins, who leads Collective Action Network RI. Jenkin’s email to Cranston City Council members prompted Cranston solicitor Christopher Millea to call on state police to investigate Germain’s resignation.

When asked if he would have reconsidered asking state police to investigate if he had known Jenkins supported Germain’s organization, Millea said no.

“I feel absolutely duty-bound in my job as solicitor to take that complaint seriously,” Millea said.

Political donations

According to campaign finance filings, Hope and Change for Haiti received at least $1,050 in donations from political candidates after the IRS revoked its tax-exempt status. Donors included the campaigns of Magaziner, state Rep. Brandon Potter and state Sen. Joshua Miller, each contributing $350. The donations were made between June and August of 2022.

Magaziner was unaware of the organization’s tax status when his campaign donated to Hope and Change for Haiti. In an email following the publication of this story, Miller said he was not notified that the organization had lost its tax-exempt status nor was he reimbursed for the donation. Potter did not respond to questions from The Providence Journal.

It is unclear if the organization returned the donations.

Campaign finance records also show that Hope and Change for Haiti was paid for advertising by Lt. Gov. Sabina Matos and also by Nirva LaFortune, who at the time was running for Providence mayor. Matos paid the organization $200 and LaFortune $350, both in August, ahead of the organization’s gala.

Matos’ contribution was for a post on Hope and Change for Haiti’s Facebook page, according to spokesperson David Folcarelli.

“Lieutenant Governor Matos has been a proud supporter of Hope and Change for Haiti since the group’s founding and feels that Councilwoman Aniece Germain’s work has had a positive impact in Haiti and for Rhode Island's refugee community,” Folcarelli said, who added that Matos has not discussed the organization’s 501(c)3 status with her staff.

Facebook posts indicate others, too, including Sen. Jack Reed, Rhode Island Secretary of State Gregg Amore and David Cicilline, then a congressman, may have paid for campaign posts endorsing the upcoming gala.

Rhode Island’s campaign finance law allows candidates to “provide a monetary gift to any charitable organization, provided the donor does not personally benefit from the donation or receive compensation from the recipient organization.” It does not specify whether the charitable organization is required to be registered as a 501(c)3.

Calls for donations on social media

Germain said Hope and Change for Haiti suspended all fundraising after she learned the organization’s tax status had changed. But the organization kept asking for donations through social media, where it still identified as a 501(c)3 organization.

On March 30, 2023, a post asked for donations ahead of 401Gives, an annual statewide fundraising campaign that disburses funds to participating organizations.

“Don’t forget to donate to our organization starting tomorrow till April 3rd. Thank you in advance for your support,” the post read.

401Gives’ website states only “organizations that are verified 501(c)(3) charitable nonprofits” can participate in the campaign. According to an archived screenshot, Hope and Change for Haiti was a participating organization in 2023, but as of May of that year it had not raised any funds.

The most recent solicitation for donations came on March 19 this year. The organization wrote a post celebrating an award that Germain received. “Please sign up today to join as a member,” the post said next to a link that directs to a membership form on the organization’s website. Memberships cost $50 to $2,500 a year.

The website this week still identified Hope and Change for Haiti as a 501(c)3 organization. A landing page for donations claims all contributions are “tax-deductible and will be acknowledged.”

In an email to The Providence Journal, Germain stated the organization did not shut down its website and social media page because they were inactive.

“We did not think about [shutting] down the website or the Facebook page of the organization because we are not operational,” she said.

A potential facelift?

It is unclear whether Hope and Change for Haiti has regained its tax-exempt status from the IRS or its articles of incorporation from the Rhode Island Secretary of State's Office.

The organization is on the IRS’s auto-revocation list, which automatically kicks out organizations that have not filed Form 990, a nonprofit’s tax return, for three consecutive years. Germain, however, provided photos to several news outlets of the first page of the tax returns Hope and Change apparently filed between 2016 and 2021.

“We are working to figure out what happened,” said Germain when asked about the organization’s IRS status.

Germain has not stayed idle. According to the secretary of state's records she incorporated a new organization on Jan. 20, 2024, called Hope and Change Partnership. Its list of directors includes names also listed on Hope and Change for Haiti’s last annual filing to the Secretary of State's Office, though it has a different address, at 63 Dale Ave. in Cranston. According to its article of incorporation, its purpose is similar to Hope and Change for Haiti’s.

Germain declined to answer questions by phone for this story.

“As of now I am advised to not talk to the media until further notice,” she told The Providence Journal.

Did the council president have authority to investigate?

A question remains about whether the Cranston City Council president had the authority to investigate Germain’s nonprofit activities.

The city’s municipal code states that the council has “the power to investigate the official conduct of any department, board, commission, office or agency, or officer or employee of the city.”

Critics of the events that led to Germain’s resignation have pointed out that the code only specifies that official conduct – that is, business in office – is under the purview of the council’s investigative powers.

Millea declined to comment on the limits of the council’s investigative powers, saying he did not want to influence the state police investigation one way or another. But he added that such investigations seem to be rare.

“In my three years, we’ve never had ... a request for an investigation, nor have we conducted an investigation,” Millea said.

This story has been updated with a response from state Sen. Joshua Miller following its publication.

This article originally appeared on The Providence Journal: Germain’s nonprofit took donations after losing tax-exempt status