Finances With Wolves

Telemarketers rake in millions of dollars by telling donors they're helping Native Americans. But the biggest beneficiary by far is the charity itself.

"Teenage and younger suicide is near an epidemic on Rosebud," Myers wrote in another letter. "Children have hung themselves in mass [sic], have put guns to their heads and literally blown themselves into eternity to escape life on Rosebud Reservation."

South Dakota's reservations have dismal health statistics and poor economies. But, says Rosebud business manager Ken LaDeaux, there have been no mass suicides.

Myers' accountant was Brian J. Brown, now the president of National Relief Charities. In filing after filing, Myers' charities claimed credit for giving needy groups millions of dollars' worth of surplus goods--vegetable seeds, used clothing, baby formula, books.

From 1987 to 1992, Myers' charities claimed to have given a whopping $21.5 million in goods to needy people, mostly Native Americans in South Dakota. However, a batch of the surplus seeds made up almost three fourths of that amount--and that, too, is deceiving.

A 1993 lawsuit filed by the State of New York's attorney general alleged that Myers' charity increased its claimed value of many seeds from a penny a pack to $1, even though many of the seeds were outdated and useless.

The New York suit noted that one American Indian Relief Council operation, dubbed the "Little Soldier Wood Project," was supposed to be stockpiling wood for sick and elderly Indians. "In reality," the state claimed, "the project consisted of one chain saw and a pickup truck in the director's [Myers'] backyard."

A Rosebud tribal employee wrote to Dave Myers in early 1992: "Where is all the money? Thousands of American citizens throughout the nation have sent you money, and continue to send you money, on behalf of the Rosebud Sioux for various reasons. . . . What services do you provide to our needy people with the millions of dollars you receive on our behalf?"

It isn't known if Myers responded. (He could not be reached for comment for this story.)

As the attorneys general of several East Coast states investigated Myers' charities in the early 1990s, he and Brian Brown made a series of brazen moves.

On June 20, 1992, court documents indicate, Myers and his wife resigned from the charities he had founded. That day, Brian Brown became American Indian Relief Council's president.

Also that day, the charity's new board of directors issued a call for anyone interested to apply for "monetary awards" to develop programs to assist Native Americans. Proposals were to be submitted by July 1993, more than a year off.

Less than a month later, however, the board met by telephone and granted $650,000 to the Great Plains Economic Development Corporation.

The board also sanctioned an immediate $300,000 payment to Great Plains, with the remaining $350,000 to be paid by July 1994. (American Indian Relief Council paid Great Plains $564,786 by April 1993, far exceeding its payment schedule.)

Of that sum, $250,000 of the initial $300,000 payment was to pay Great Plains for managing American Indian Relief Council's "jobs and training program"--actually a telephone boiler room then manned by about 20 Native Americans.

Great Plains' sole directors, officers, shareholders, employees and benefactors? Bernice and David Myers.

Myers introduced Brown to AIRC's established donor base with a glowing letter. In part, he said Brown had accepted "a huge cut in salary compared to the very prosperous living he was earning as a CPA."

But records show Brown's accounting practice had been closed since U.S. Postal Service inspectors raided his office in late 1991. Brown never was charged in connection with the raid.

(The relationship between Brown and Myers soured by late 1993. American Indian Relief Council sued Bernice and Dave Myers, Great Plains and the Native American Heritage Association--the Myerses' latest nonprofit incarnation--for misappropriating trade secrets and, ironically, for "unjust enrichment.")

Apparently, few South Dakotans knew any of this when Brown took over American Indian Relief Council. Within weeks, he instructed dozens of Sioux in the arts of telemarketing, then put them on the phones, paying them about $5 an hour.

Brown's upbeat letter inside American Indian Relief Council's glossy 1993 annual report heralded the charity's growth:

"AIRC has grown from having a few programs to over a dozen. We've gone from feeding a few dozen hungry people each month to feeding thousands. Best of all, we are starting to focus on some of the long-term problems that face the Native American community."

That's not how Pennsylvania Attorney General Ernie Preate Jr. saw it. His office sued American Indian Relief Council and Brown in December 1993, alleging the charity had made "phony claims about natural disasters and chronic food shortages among Native Americans to pull at the heartstrings of potential contributors."

Despite the bad publicity in states such as Pennsylvania, New York, Connecticut and Minnesota, American Indian Relief Council continued to rake in donations. The charity's Form 990 for 1993 said it collected $4.6 million in contributions that year, almost all from individual donors.

At that time, Brown had about 120 Native Americans working for him, most of them from a telemarketing room in Rapid City.

He, too, dubbed it his "jobs service" program.
As 1994 dawned, Brown and his family were living in a sprawling home in an elite neighborhood of Rapid City. The charity business had been very good to him.

But a little more than a year later, Brown would abandon South Dakota and its all-Indian telemarketing force for the promised land of Phoenix.

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This comment is posted by National Relief Charities for clarification and accuracy. ** David and Bernice Myers founded the Famine Relief Fund in Virginia in 1998. It closed in 1990, the same year David Myers started AIRC in South Dakota (SD). He operated as a call center with Native Americans raising funds used in turn to provide services for Native people. In 1992, Myers resigned as President of AIRC on short notice. He brought in Brown as President and took a service contract with AIRC during the transition.

In 1993, the Pennsylvania Attorney General brought a case against Brown, Myers and AIRC by association, related to alleged misuse of funds/payments to Directors and exaggerated claims in fundraising. The settlement agreement in this case clearly states “no finding of wrongdoing” and AIRC incurred no fine. AIRC ended the case by offering a settlement to stop the drain on legal fees – AIRC’s federal 990 form includes this information. However, AIRC asked that the settlement funds be directed to aid specific tribes in need that AIRC was already serving.

The form 990s for the early years show program percentages started high (60%) but declined (40% to 25%) as the organization attempted to expand and in doing so incurred higher fundraising costs. However, at no time was the percent of donations at the 2% or 4% level as mentioned in this article. Nor did the SD office close when the Arizona (AZ) office opened; rather, SD expanded to serve more Plains tribes, even as AZ was growing.

The early 990s also show AIRC served 15+ tribes in the Plains and Southwest. Resources benefited many people and communities – not just a single tribe. AIRC’s early income is also misperceived. AIRC had no gift-in-kind products to distribute at the time; all services were cash-based and income ranged from $1.5 to $5M. Program expenses ranged from about $1 to $1.5M and included job services (10-45% of program expense), self-help programs (housing, gardening, 10-40%), substance abuse (about 10%), and a Native crafts make-sell program (about 10%). Roughly, 45% was grants, 25% specific aid to individuals, 10% substance abuse, 10% crafts and 10% self-help.

Today, AIRC is one of eight programs of National Relief Charities, a 501(c)(3) nonprofit in good standing. NRC is a GuideStar Gold Exchange Member, representing the highest level of transparency, and a Top-Rated Nonprofit. NRC’s headquarters and telemarketing center is located in Texas. NRC serves 65 reservations in 11 states, benefiting 250,000 Native Americans each year. We invite you to review NRC’s 2012 annual reportand form 990 for accurate information and to contact us at 800-416-8102 or if you have any questions.

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