Preliminary ruling in favor of charities for the California AG’s cease and desist order for GIK valuation – part 1

Image courtesy of Adobe Stock.

On December 11, 2018, the administrative law judge (ALJ) hearing the case by the California Attorney General against Food for the Poor (FftP), MAP International (MAP), and Catholic Medical Mission Board (CMMB) announced his preliminary determination.

The ALJ concluded that the state did not prove its claim that the financial statements of the three charities violated GAAP.

The arguments by the charities’ expert witness were more persuasive than the arguments by the AG’s expert witness.

A certified transcript of the hearing on 12/11/18 is available here. The hearing ran from 11:05 a.m. until 4:21 p.m, with a 90 minute break for lunch. The transcript is 204 pages long, including a 37 page index of words used in the hearing. To give an idea of the volume of testimony, the page numbering for this day of hearing runs from 1906 through 2067, which means there are just over 1,900 pages of testimony in the previous 9 days of the hearing.

Pages 1907 through 1916 describe the ALJ’s proposed ruling, the conversation about the decision, and how to proceed.

Some personal notes

Two side notes for those who have been watching my blog.

First, I chose not to address this ruling for many weeks because of personal issues in my life. You may have noticed the frequency of posting across all my blogs dropped dramatically many months ago. Those issues are fading and I’ll slowly get back to a normal posting schedule.

Second, my writing about the AG’s case stopped while describing the materials in the filings. Eventually I’ll get back to those filings since there is more information which would be of interest to anyone watching this issue.

Multiple posts

The length of this discussion has now passed 3,100 words. It will be broken into multiple posts over the next few days. Not even the most hard-core accounting technician will want to read 3,000 words on GIK valuation in one sitting.

Next post: The preliminary determination.

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3 Responses to Preliminary ruling in favor of charities for the California AG’s cease and desist order for GIK valuation – part 1

  1. I have been following this situation for months and have greatly appreciated all of your updates and explanations. Thank you! How has a story like this not been covered by other media? And how have you gathered so much content?

    • Jim Ulvog says:

      Hi Jordan:
      Thanks for your comment. There have been a few articles from other places, but very few. I don’t know why there has been so little coverage. Five or seven years ago there was a lot of interest in the mebendazole story, but those reporters and authors haven’t been mentioning this story.
      Jim

      • Appreciate the prompt reply. A few follow-up questions and feel free to email me: 1.) I have some experience with GIK but am still trying to understand all the legal cases. How did the state of Michigan win their case but not California? 2.) Aside from GIK having some controversy, can state governments challenge nonprofit organizations now based on other related topics that they feel are questionable? 3.) What lessons can NGO’s and faith-based Humanitarian orgs learn from this situation for more effective application? Thank you again!

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