--- title: "Congress Vows to Investigate Diversion of Charitable Funds" id: "20378" type: "post" slug: "congress-vows-to-investigate-diversion-of-charitable-funds" published_at: "2013-11-13T21:33:37+00:00" modified_at: "2026-03-15T21:26:16+00:00" url: "https://associationsnow.com/2013/11/13/congress-vows-to-investigate-diversion-of-charitable-funds/" markdown_url: "https://associationsnow.com/2013/11/13/congress-vows-to-investigate-diversion-of-charitable-funds.md" excerpt: "A recent Washington Post report detailing millions of nonprofit dollars lost to embezzlement and fraud has spurred scrutiny on Capitol Hill and in some state legislatures." taxonomy_category: - "Governance" taxonomy_post_tag: - "AssociationsNow" - "Business" - "Governance" - "nonprofit" - "seafood fraud" taxonomy_content_format: - "Article" taxonomy_role: - "Association CEO / Executive Director" - "C-Level" - "Executive Team" - "VP" taxonomy_persona: - "Executive Leadership" --- [Home](https://associationsnow.com/) » [Articles](https://associationsnow.com/format/article/) » Congress Vows to Investigate Diversion of Charitable Funds ## A recent *Washington Post* report detailing millions of nonprofit dollars lost to embezzlement and fraud has spurred scrutiny on Capitol Hill and in some state legislatures. Federal and state officials last week said they would examine charitable organizations’ governance practices after a [Washington Post investigation (opens in a new tab)](http://www.washingtonpost.com/investigations/inside-the-hidden-world-of-thefts-scams-and-phantom-purchases-at-the-nations-nonprofits/2013/10/26/825a82ca-0c26-11e3-9941-6711ed662e71_story.html) identified more than 1,000 nonprofits that have suffered significant losses of assets in recent years due to fraud or embezzlement. > Tax-exempt dollars are meant for tax-exempt purposes, not bankrolling someone’s personal champagne lifestyle. [According to a followup Post report (opens in a new tab)](http://www.washingtonpost.com/local/congress-to-review-financial-wrongdoing-at-charities/2013/11/01/9471f04c-430d-11e3-a751-f032898f2dbc_story.html) , Sen. Charles Grassley (R-IA), ranking member of the Senate Judiciary Committee, sent a[six-page letter (opens in a new tab)](http://apps.washingtonpost.com/g/page/local/grassleys-letter-to-the-american-legacy-foundation/551/) to the American Legacy Foundation November 1 with a series of questions about the organization’s alleged loss of $3.4 million due to fraud by a member of its IT staff. “The public should know when charitable dollars are diverted,” Grassley said. “Tax-exempt dollars are meant for tax-exempt purposes, not bankrolling someone’s personal champagne lifestyle.” House Ways and Means Chairman Dave Camp (R-MI) said it is “vital that nonprofits account for, and accurately report, how their funds are used, even when the worst happens and funds are misused.” Regulators in New York and Hawaii also said they are reviewing the [database of charitable diversions (opens in a new tab)](http://www.washingtonpost.com/wp-srv/special/local/nonprofit-diversions-database/) created by the *Post* to see if charities in their states had failed to disclose the amounts and circumstances of their losses. The *Post* analyzed Form 990 filings dating back to 2008, the year the Internal Revenue Service implemented a requirement that nonprofits report any “significant diversion of assets.” The finding of such diversions at more than 1,000 nonprofits indicates [the need for tighter financial control procedures](http://associationsnow.com/2013/10/post-report-highlights-need-for-effective-nonprofit-financial-controls/) at many organizations, a nonprofit accounting expert told *Associations Now* last week. (Wavebreak Media/Thinkstock) [Chris Vest, CAE](https://associationsnow.com/author/chris-vest-cae/) Chris Vest, CAE, is director of public policy at ASAE. [More articles by this author](https://associationsnow.com/author/chris-vest-cae/) Tags: [#Business](https://associationsnow.com/tag/business/) [#Governance](https://associationsnow.com/tag/governance/) [#nonprofit](https://associationsnow.com/tag/nonprofit/) [#seafood fraud](https://associationsnow.com/tag/seafood-fraud/) **Stay Informed** [Subscribe to our free newsletter](https://associationsnow.com/newsletter/) , *Associations Now Daily News*, to find out what’s happening in the association world every business day. ## You Might Like - [PodcastAssociations NOW Presents: Leading Together-Strengthening the Board-CSO PartnershipDecember 18, 2025](https://associationsnow.com/2025/12/18/associations-now-presents-leading-together-strengthening-the-board-cso-partnership/) - [VideoAssociation Governance Institute: Your Governance HeadquartersMarch 18, 2025](https://associationsnow.com/2025/03/18/association-governance-institute-your-governance-headquarters/) - [VideoStrengthening the CEO & Board Partnership with Governance TechnologyMarch 17, 2025](https://associationsnow.com/2025/03/17/strengthening-the-ceo-board-partnership-with-governance-technology/) - [VideoSmarter Board Management for Associations: An OnBoard ShowcaseJuly 24, 2026](https://associationsnow.com/2026/07/24/smarter-board-management-for-associations-an-onboard-showcase/) ## Comments **Comments are for ASAE members.** [Learn more about comments on this site.](https://associationsnow.com/comments/) [Log in](https://associationsnow.com/login?redirect_to=https%3A%2F%2Fassociationsnow.com%2F2013%2F11%2F13%2Fcongress-vows-to-investigate-diversion-of-charitable-funds%2F%23comments) to your member account or [join ASAE](https://my.asaecenter.org/select-a-membership-type/) !