Dolan's NonProfit Status Revoked For Failure to File Tax Returns

Illick's Mill

Many of you have heard about or visited Illick's Mill. One of Bethlehem's treasures, it's an 1856 grist mill that serves as the centerpiece of a park along the Monocacy Creek. This park was established by the FDR administration during the Great Depression. Today, that historic mill is known as the Fox Environmental Center. It's a nonprofit under the direction of Karen Dolan. A member of City Council since 2006, she is also the Parks' Chair. Must be very convenient. Despite using her elected office to gain favorable treatment, her record is one of mismanagement so bad that she lost nonprofit status for a year. Thanks to a Northampton County Grand Jury, we all know about the abuse at nonprofit National Museum of Industrial History. But the Steel Museum never had its nonprofit status revoked, which happened to Dolan. No elected official is involved in conflicts of interest, which is certainly true of her.

Between 2001 and 2009, Dolan worked to restore the old mill. She had a ready supply of labor in the form of Liberty High School students. After all, she was teaching there. Her husband was a teacher at Bethlehem Vo-Tech, and that school soon began helping with the project, too. The City of Bethlehem also provided a lending hand.

According to the nonprofit webpage, over $1.3 million was raised to restore the mill. How much of that is public money is anybody's case. The most recent 990 (that's a nonprofit tax return) is from 2007. It lists at least $121,000 in public funding in that year alone. But what about subsequent years? Guidestar, an online repository for nonprofit financial records, has nothing beyond 2007. Where are those records?

Perhaps even more troubling than the missing 990s is that Dolan's nonprofit owed $127,000 to Bethlehem. It was reported that way in several city audits. Then suddenly, in 2012, it was just written off with no explanation.

I wanted answers, and Dolan met with me in February.

"We're not the National Museum of Industrial History," she told me. "We've done everything by the book always."

I asked her to show them to me. Specifically, I wanted to know why Guidestar had no record of 990s after 2007.

Dolan handed me a bunch of financial statements. When I pointed out those are not 990s, she told me they are just as good. That may be, but I told Dolan I needed to see the 990s themselves. I wanted to know when they had been filed and why they did not appear at Guidestar.

After her initial attempt to mislead me, Dolan fessed up. She admitted that her nonprofit failed to file 990s in 2008, 2009 or 2010. She blamed her accountant, although she is the Executive Director, and the responsibility is hers. But rather than being responsible, she even executed a Power of Attorney to her accountant.

After three years, the IRS had had enough. Her nonprofit status was revoked on 5/15/11. It remained revoked until 5/15/12. (EIN 23-281225).

Dolan assured me that she raised no money during this time period. But just as she tried to mislead me concerning the 990s, she was dishonest with me about being dormant while the nonprofit status was revoked. The proof of that is an August 15, 2011 account in The Express Times.

There's this:

The organization is opening the center for event rentals as a way to fund the nature programs and the historic building’s upkeep, Dolan said. The three-and-a-half story building can comfortably fit 150 people and rents for $100 an hour or $1,200 for a wedding.

And this:

The center has an annual budget of about a $170,000 from a variety of sources, including rentals, grants, programs, fundraisers and memberships. The mill’s $1.3 million renovation was paid for entirely through grants.

Not only was Dolan raising money while her nonprofit status was revoked, she even insisted that she had a $170,000 budget. She also misled The Express Times into believing that she was at the time a nonprofit.

In the meantime, she managed to run up one hell of a tab with Bethlehem. A $127,000 debt was listed in several independent audits. Then suddenly, in the 2012 independent audit, the debt was marked written off.

What the hell happened?

Dolan insisted to me that she paid every penny owed to the City, but then why did auditors use the term "written off"? Dolan then attempted to tell me that's not what the audit says, but it is. After misleading  me twice, I'm unwilling to take her word unless it is backed up.

The independent audit would lead anyone to conclude that the City views the money owed by Dolan's nonprofit as a bad debt.

Bethlehem resident Steve Antalics raised this very question with Bethlehem City Council on March 3. Dolan had no explanation. Nor did any other member of Council. He was answered with silence.

Antalics also questioned using this nonprofit for weddings, especially since alcohol is consumed.

Instead of answering Antalics, Dolan did something else. You see, she chairs the Parks Committee and decided to convene a hearing to eliminate park regulations banning the use of alcohol at most city park venues. Obviously, her involvement in something that directly impacts her organization, particularly serving alcohol to make money within City-owned parks, is a huge conflict of interest.

Dolan, incidentally, denies that the Illicks Mill is part of Monocacy Park, which is kinda' like arguing that Musikfest is in Hellertown. But this lousy argument enables her to pour booze down the throats of paying wedding guests.

Another conflict of interest for Dolan is that she gets her heating oil for free, courtesy of the City. Just like that. This is what she recently told Antalics as well as me. Antalics sought confirmation from Ralph Carp, the City's Parks and Public Works Director. Carp answered with "No comment", according to Antalics

So basically, you have a City Council member who directs a nonprofit on municipal property. Its status was revoked because she failed to file 990s for three years straight. She pays no rent, and is not even paying for snow removal, heating oil and other services that other nonprofits on municipal property pay. The $127,000 she owed to the City suddenly vanished. She somehow gets herself appointed as Chair of the Parks Committee when her own nonprofit is smack dab in the middle of a park, which she claims is not a park. She decides she wants to relax booze rules in the park because Antalics and others have questioned exactly what kind of alcohol is served at Illick's Mill weddings.

At the last budget cycle, she lobbied to have parks workers paid more money. Last Winter, she started getting free oil. Hmmmm.

Dolan is a walking, talking conflict. Her participation on the Parks Committee is an invitation for trouble. There needs to be a compete accounting of the $127,000 her nonprofit owed to Bethlehem, and why that debt was written off. When she lost her nonprofit status, she continued to raise money and misled the media that she was open for business and should be required to pay the fair market value of rental income during that year. If other nonprofits on City-owned property must pay rent, then she should, too.

I was not going to write this story when I saw her in February, since Dolan broke down, and tearfully told me that the public release of this information would "ruin" her. But then I heard that she was telling other people, including reporters, that I investigated this and found there was "no story." That's yet another lie. The kicker was when she decided to relax booze rules in city parks.

She needs to resign from City Council or her nonprofit. Perhaps both.