The government-sponsored nonprofit, exempt from disclosure requirements of most charities, takes a hard line against release of data about executive spending and board retreats, but loses in court.
Another Pennsylvania nonprofit, Pheaa, the Pennsylvania Higher Education Assistance Agency (EIN 23-1693362, a private government entity with no Form 990) was in the news this year for trying to stay out of the news. The Harrisburg Patriot-News (Jan Murphy, Daniel Victor and Charles Thompson) reported on the spending the student loan organization's leaders lavished on themselves, but it took a year and a half to get the documents, because Pheaa resisted their release and appealed up to the commonwealth's Supreme Court. According to the Chronicle of Higher Education, Pheaa spent $410,000 in legal fees in its ultimately unsuccessful attempt to keep the information under wraps (subscription only, but you may find a free copy of the story here.)
What they were trying to hide (from both the Patriot-News and Chronicle of Higher Ed stories):
- Trips to places like the Dominican Republic and Puerto Rico, disclosure of which, they claimed, would tip off competitors to their strategies,
- A dinner for four at a Scottsdale, Arizona restaruant costing $1,734
- A four-day stay at a resort hotel on Sanibel Island, Florida for $1,267
- Flying a board member (also a state legislator) to a golf trip in Palm Springs for $775
- Chartering a lear jet for $45,000
- A total of $860,000 for various trips to resort areas, spouses included.
The Chronicle of Higher Education points out that this spending was funded by a decision by Congress to guarantee a return of 9.5% on student loans held by nonprofits. It was supposed to be phased out, but organizations like Pheaa found a loophole that extended the subsidy. Overall, nonprofit student lenders received $6 billion in additional subsidies, and Pheaa was the second largest beneficiary.
Pheaa actually provides a standard financial statement that discloses far more in the way of financial data than the Form 990. But it's still missing the disclosure of compensation and payments to outside consultants. Travel spending details will never be part of a standard financial disclosure, but it's still unseemly for a government-sponsored nonprofit to stand on its technically private status to avoid disclosures.