National Stonewall Democrats corporate status revoked

The corporate status of the National Stonewall Democrats was revoked more than a year and a half ago by the District of Columbia, where the organization is incorporated, for failure to submit disclosure information that non-profit corporations must file by law. NSD has since fallen delinquent on additional mandatory paperwork, compounding the problem and adding to the reports, fees, and penalties that it must now submit before its status can be restored to good standing. The delinquency and subsequent revocation have placed NSD's federal tax-exempt status in jeopardy. As of the close of business Friday, May 26, 2006, the revocation is still in effect (see http://mblr.dc.gov/corp/lookup/status.asp?id=192919).

The National Stonewall Democrats bills itself as America’s only grassroots Democratic lesbian, gay, bisexual, and transgender organization.

According to sources in the District of Columbia Business and Professional Licensing Administration, NSD failed to file a required two-year report that was due by January 2004. The Licensing Administration sent communications requesting the missing information, and it finally revoked NSD's corporate status in September 2004 after months of receiving no response. NSD subsequently failed to file the next two-year report in January 2006.

NSD's board of directors is responsible for the conduct and oversight of the organization's operations. The board's Co-Chairs at the time of the January delinquency were Julian Potter and Rick Trombly. Trombly resigned several weeks later after admitting substantial temperament and performance shortcomings unrelated to NSD's corporate status. Trombly admitted to being "strident" in dealing with board members as well as to failing to get anyone in authority in the Kerry presidential campaign to return his phone calls in his capacity as NSD Co-Chair. Trombly was replaced by Stephen Driscoll of Massachusetts, who, along with Potter, was Co-Chair at the time of the September revocation. Potter in turn resigned several weeks after the revocation following criticism for her chronic failure to protect staff from micromanagement by a handful of board members and to prevent a staff revolving door. Potter resigned the same night that then-Executive Director Dave Noble announced that he was stepping down after only two years on the job; NSD had four Executive Directors during the four years that Potter was on the board.

The District of Columbia allows any of several corporate officers to sign the two-year report, but NSD has specified that the two officers primarily responsible for overseeing such matters are the Secretary and the Treasurer. NSD's bylaws specify that the board's Secretary is responsible for "all of the papers of NSD", and various papers filed with government agencies identify the Treasurer as the "custodian of records". The Secretary on both the submission deadline in January and the date of corporate revocation in September was Steve Brown of Kansas; the Treasurer on both dates was and still is Jeffrey Tooke of New York.

Brown was later removed from the NSD board of directors by voters in his region in the organization's April 2005 board elections after a concerted campaign by NSD insiders to recruit qualified challengers to run against him. Brown had long been subjected to criticism for various aspects of his performance as a board member, but he nevertheless had been re-elected in successive bids because NSD board races are largely uncompetitive.

The revelation of the revocation comes at a critical time for NSD. The organization is struggling with yet another Executive Director search while simultaneously trying to allay club leaders' concerns about what many perceive as a staff revolving door. Executive Director Eric Stern announced on March 13 that he would not be renewing his initial one-year contract, and his successor will be the National Stonewall Democrats' sixth Executive Director in only five years (see "Stern to leave National Stonewall Democrats after barely one year", http://stonewallreview.blogspot.com/2006/03/stern-to-leave-national-stonewall.html; March 03, 2006). The Washington Blade reported on May 05 that NSD had offered the position to Brian Bond, formerly of the Gay and Lesbian Victory Fund, but he instead accepted the position of Executive Director of the Democratic National Committee's Gay & Lesbian Leadership Council, leaving NSD scrambling for a replacement. As of Friday, May 26, 2006, NSD still had not announced a new Executive Director.

Stonewall insiders say that the board of directors is organized in a way that makes it unlikely that the delinquency and subsequent revocation could have been prevented by anyone other than the Co-Chairs, Secretary, or Treasurer. Sources say that the board has no corporate governance and oversight committee, and that there is little in-depth review made at the board or committee level of much of the organization's operations. Officers' job duties are poorly defined in NSD's governing documents, and one Stonewall insider says that they are concerned that the officers implicated may try to use this fact to evade responsibility or to blame each other or even long-gone staff members. That same source expressed concern that something somewhere else in NSD may not be well, and that no one will know about it until it blows up in everyone's faces.

Other LGBT organizations

The Stonewall Review uncovered the revocation in a routine check of corporate records of LGBT organizations based in the District of Columbia. Organizations whose corporate status is in good standing include the Gay and Lesbian Victory Fund, the Human Rights Campaign, the Gay and Lesbian Student Education Network, Servicemembers Legal Defense Network, the National Gay and Lesbian Task Force, Transgender Health Empowerment, the National Gay and Lesbian Chamber of Commerce, the Family Pride Coalition, Dignity USA, Pride at Work, LLEGO, and the Log Cabin Republicans.

There is an apparent error in Log Cabin's filing, however. The organization's registered agent is listed in Licensing Administration records as "Patricia C. Guerriero"; Log Cabin's Executive Director is Patrick C. Guerriero (see http://mblr.dc.gov/corp/lookup/status.asp?id=166868).