Benzaiten Center, Lake Worth Arts Project, Played Tax Status Puffery with Public [UPDATED]

Categories: Broward News

So we called JoAnne Berkow, who turns out to be quite the chatty Hattie. She readily admitted that LAF did not, in fact, have 501(c)(3) status and that such status is a key element of LAF's plans. She dismissed it as "a technicality," though, and blamed the IRS for foot-dragging.

"We applied to two years ago," Berkow said. "We're pretty sure we'll get approval any day now. It took a year and a half just to get to an agent."

Asked if the lack of tax-exempt status was problematic for the Lake Worth project, she said, "I don't minimize it. I'm on the phone to the lawyers every week...We should get approval any day now. All you gotta say is you gotta go through the process. We are waiting patiently."

When we suggested that it was, at the very least, somewhat misleading to claim tax-exempt status while it was only pending, she replied, "If we don't get a response [from the IRS] really soon we'll get an agency to fill the gap."

We asked what that meant and Berkow told us LAF has a parallel entity that is "under the umbrella" of the Gulf Coast Community Foundation, a well-established 501(c)(3). How tax-exempt contributions could come to LAF through Gulf Coast was not explained, however, and our queries to Gulf Coast about the matter were not returned.

That's where matters stood until late yesterday afternoon, when we got a phone call from LAF's chief fundraiser, Charlotte Pelton (wife of former PB County Business Development Board chief Larry Pelton -- it sure is chummy in the upper crust). Good news!, she announced: The IRS letter of certification had just arrived! It is with the lawyers!

We've asked Charlotte Pelton to provide us a copy of the IRS letter. (Gawd. Is there no trust left? After all, Pelton raises funds for virtually every major civic entity in Palm Beach County.) She has promised to do so. We assume she will.

The troubling facts that remain are these: 1) Tax exempt status is a critical element of LAF's plans, since the contributions on which the plans depend would be that much harder to solicit if contributors are not free to write them off on their taxes. LAF misrepresented that status, hoping for the best. 2) No public officials appear to have taken the time to confirm that LAF was, in fact, tax exempt -- and it was not, in fact, tax exempt at the time Lake Worth signed off on its deal.

[UPDATE: As promised, Charlotte Pelton provided us a copy of the IRS letter. She asked us to note the date on the letter, which she described as "well in advance of the approval by the LW City Commission."
We note that the IRS letter is stamped Oct. 28. So the fact remains LAF's claims of 501(c)(3) status greatly predate the IRS certification: Their proposal to WPB was made in mid-2012, the proposal to the LW CRA Aug. 1.
Beyond that, LAF founder/director JoAnne Berkow was unaware of the IRS letter when we spoke to her Friday, as was Pelton when we first spoke with her -- so it stands to reason the LW Commission was uninformed when it voted Tuesday. The commission took a shot in the dark and got lucky.]

All's well that ends well? This time. But to quote one of our great heroes, "Trust, but verify."

Fire Ant -- an invasive species, tinged bright red, with an annoying, sometimes-fatal sting -- covers Palm Beach County. Got feedback or a tip? Contact

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