While the Mendocino County Small Farmers Association, a marijuana group of unclear purpose, has made claims it is also a non profit group, The Willits News could not locate any such registration and a spokesman for the California Tax Franchise Board says the SFA never filed for one. The Small Farmers Association Facebook and web pages solicit donations as a non profit and several persons claiming to be affiliated with it have stated publicly that the association is a non-profit. When The Willits News requested details of this alleged non profit status, no verifiable information was forthcoming from the association. A search of state records shows the association’s corporation status as suspended; and the group did not appear on state or federal listings as a non-profit.
The group’s purpose is either to educate or advocate for cannabis farmers, depending on who’s asked, and played a central role in the developmnet of Mendocino County’s 9.31 marijuana ordinance.
The group provided charter paperwork to The Willits News which lists its name as “9.31 Farmers Inc.” While that name does not appear on the California Secretary of State’s database of corporations, the name “Small Farmers Association” does appear, filed on the same date as the paperwork provided, to an address in San Jose.
According to the state’s database the status of the organization is “FTB suspended,” that is Franchise Tax Board suspended. The State Franchise Board’s website explains, “When FTB or SOS suspends an organization, it cannot legally transact business, defend or initiate an action in court, protest assessments, or file a claim for refund of paid amounts. Your organization also loses the right to use the entity name.” Their status is currently suspended for a failure to file returns as of November 2014. Brian Wooten, principle compliance representative in the executive and advocate services office of the California Franchise Tax Board (FTB) said, “They didn’t file any returns didn’t pay any balances, basically did nothing.” He added, “These folks were suspend due to the fact that they have not filed any returns or paid any taxes… It appears that they never received exempt status… So right now as we speak they would be treated as a normal corporation and they would have a minimum tax due.” Minimum California taxes are $800 per year for a corporation.
Neither the name Small Farmers Association, nor 9.31 Farmers Inc. appear anywhere The Willits News could find on the IRS’s database of non-profits and entities which have filed tax exempt paperwork. Non-profits, especially the 501(c)(3) kind which the association claims to be, and which the charter paperwork states it is, are required to file annually with the IRS.
Furthermore, when pressed for an “Employee Identification Number,” a nine digit number used by the IRS to keep track of such entities, the number provided by the SFA corresponded to no organization listed by the IRS. The number drew a total blank.
Asked about the failure to find a record the group had no explanation. Julia Carrera responded via email, “The State and Feds issue EIN numbers…[sic] we have no control over whether it’s on the website or not.” Carrera also stated that the Franchise Tax Board must have outdated or erroneous data and she would be looking into it. “Our government moves slowly, and updates may or may not happen.”
When Carrera, who claims to represent the SFA, was asked about whether the SFA is a 501(c)(3) or 501(c)(4) organization. Carrera stated that the group was a 501(c)(3) contrary to the information listed on their website’s donation page. When this was pointed out to her, Carrera stated that she could not be sure which kind of organization the SFA is because she is dyslexic.
The distinction between 501(c)(3) and 501(c)(4) is a tricky one; the former include groups as varied as food banks and little leagues, the latter tends to focus on policy agendas, without being strictly political action groups. Though the distinction is subtle, it is one worth making because of the frankly political nature of the SFA’s activities.
Non profit 501(c)(3)s have serious restrictions curbing political and lobbying activities while 501(c)(4) organizations are not as restricted. Either way, knowledge of such distinctions is important to groups working to advocate for citizens. Carrera has appeared before the board of supervisors, before the Marijuana Ad Hoc Committee, and has spoken on various occasions directly with supervisors.
As late as Wednesday, the donation section of the SFA’s website stated, “We are a farmer funded 501(c)4 educational organization… It costs $2,100 a month to operate and the majority of that goes to paper production for things like brochures, membership papers, lobbying. Lobbying is a big part of our expenses with every trip to Sacramento costing $750. Would you like to sponsor a lobbying trip to Sacramento?”
Within minutes after The Willits News spoke with Carrera, the SFA website was altered. The 501(c)4 was changed to 501(c)3; and the word lobbying was deleted from the list of monthly operational expenses, although the reference to sponsoring a lobbying trip remained.
During the heyday of the 9.31 program Carrera was the primary inspector, collaborating closely with the sheriff’s department. She was also at one point registered as a lobbyist with the state, though it is unclear if she is currently still a registered lobbyist. She stated that she is the “representative” for the group, but did not specify her exact relationship, except to say that she files a 1099 tax form. These kinds of forms are commonly used by independent contractors.
During an interview Carrera denied the group performed any advocacy role, or held any policy positions. Commenting on a letter sent by Board President of the SFA Noel Manners to Supervisor Tom Woodhouse and The Willits News, Carrera said that he should not have said that he was president of the board. At one point Carrera said, “We’re advocating for a change in the existing ordinance to protect small farmers to increase the plant count in a drought.” She then flatly denied that the SFA holds any policy position, or performs any advocacy work, saying, “We’re trying to empower the people, we don’t have a policy.”
The chartering of marijuana advocacy groups, and their status as nonprofits, can be problematic precisely because of the federally illegal status of marijuana. Other advocacy groups have opted to charter as for-profit entities, allowing them greater leeway. The status of a non-profit carries with it special requirements and burdens to ensure the group is genuinely charitable, political, or meets other definitions under the specific statute.
(Courtesy, the Willits News)