Since our earlier post about letters exchanged (and distributed to the media) between Congressional candidates Ben Quayle and Steve Moak, Moak's campaign got back to us and answered some of the questions posed in Quayle's letter.
In case you missed it, Moak sent Quayle a letter bashing the 33-year-old candidate for "using deceitful and dishonest campaign tactics to smear the great work of NotMYkid and disrespect the voters of Arizona's 3rd Congressional District in the process."
Moak went on to take a jab at Quayle, saying "I believe [Quayle] owe[s] an apology to all the teens, parents, volunteers, educators, and contributors to NotMYkid, though I doubt one is forthcoming given [Quayle's] history."
Click here for all the details.
In response to Moak's letter, Quayle fired off a letter of his own -- not to apologize, but to continue to press Moak over the relationship between Moak's charity, NotMYkid, and a for-profit business Moak used to own.
Click here for that whole story.
In his letter, Quayle posed four questions to Moak about the charity. See below.
1) Why didn't you disclose the connection between NotMYkid and First Check on IRS statements like you are legally required to do?
2) Why didn't you tell donors at the time of the conflict?
3) Why did you use 80 percent of donors money in 2005 to promote First Check?
4) Why was the reference to you being the chairman of First Check suddenly removed from the NotMYkid Web site?
The questions are in reference to Moak's failure to disclose to the IRS a possible conflict of interest between First Check, Moak's for profit company, and NotMYkid, his non-profit charity.
Moak's campaign spokesman, Jerry Cobb, gave New Times a few answers to Quayle's questions -- namely, why Moak didn't disclose a connection between First Check and NotMYkid on IRS forms.
Cobb says the reason Moak didn't disclose the conflict is because there wasn't one -- legally, anyway.
Cobb provided us with a copy of the instructions on the IRS form where Moak would have been required to disclose the conflict. It reads: "Answer 'Yes' if most (more than 50%) of
the organization's governing body (officers, directors, etc) are also officers, directors, trustees or members of any other organization."
Because fewer than 50 percent of the charity's 14-member board had an interest in First Check, the organization wasn't required to disclose a conflict.
However, in 2007 -- the year Moak sold First Check for $25 million -- Moak claimed there was a conflict. See below.
As we explained to Cobb, it looks a little suspicious, to say the least.
Declaring a conflict the year Moak was selling the company might suggest he only disclosed it because he knew there would be a good chance the company would be audited prior to its sale.
Cobb says the SNAFU wasn't part of some sinister plot to deceive IRS officials, or shareholders, but rather a mistake made by an accountant.
Cobb says the accountant was not the same person Moak had been using in the years prior -- when he never made any disclosures about a conflict.
Now, nearly three years after making the mistake, NotMYkid happened to notice the mistake and sent a letter -- dated August 9, 2010 -- to the accountant requesting an amended tax return be issued to the IRS omitting the declaration of conflict filed in 2007.
Check it out below.
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So, there you have it -- Steve Moak's explanation of why he disclosed a conflict one year and not others: an accounting mistake made the same year he happened to sell the company for $25 million.
As for Quayle's other questions, Cobb says they will be addressed in a media release later today.