EDITOR’S NOTE: This is the most complete presentation yet of the many questions regarding HALC, the non-profit organization run by Endy Zemenidis (It was published in newsbreak.gr)  HALC is not registered as a “lobbying” organization and is declared as a “social welfare” group.  Yet, if one looks at their website and what the news media have been reporting, it is abundantly clear that their only purpose is political action and lobbying. The organization has received generous donations from the late Nikos Mouyiaris and the Niarchos Foundation.  George Tsunis, now Ambassador to Athens, used to be HALC Vice President for a while.  With so many well-known names involved Zemenidis needs to explain himself… 

BELOW IS THE ENGLISH TRANSLATION FOLLOWED BY THE GREEK ORIGINAL

============================

Eddie Zemenidis owes an explanation for the HALC organization

SOURCE- newsbreak.gr

About two months have passed since the “Kalami.us” website revealed the scandal of the “lobbyist” Eddie Zemenidis and his HALC (Hellenic American Leadership Council) organization.

It turned out after an investigation that this organization is not registered in the relevant list of the US Department of Justice (Foreign Agents Registration Act) (1) where it is mandatory to register all those who represent foreign countries and third-party interests in America. And therefore, Mr. Zemenidis cannot present himself in Greece and the USA and declare himself the lobbyist “who succeeded with his organization in overturning the sale of the F-35 to Turkey”…

According to HALC’s charter, it is a 501(c)(4) non-profit organization, which translates as follows:

1) It is a “social welfare” organization, and has social and educational purposes.

2) Any donations to this organization do not result in a tax exemption for the amount of the donation.

Indeed, according to HALC’s tax return in 2018 (AM 26-4103685), its mission is to “promote public education and “advocacy” on issues of interest to Greek Americans and Global Hellenism. Public education efforts are centered around the following: A) An informative website to keep the public informed about Greece, the Greek Diaspora, and local news about global Hellenism. B) A blog, and twitter and Facebook accounts. C) A series of lectures and D) A leadership training curriculum.” (2)

So can such a 501c4 non-profit organization engage in political activities? The answer is yes, in some activities – as long as these activities are not the organization’s main activity… But according to the US Internal Revenue Service (IRS), these expenses may be subject to taxation under the Internal Revenue Code (section 527f ) (3) This is also stated on the HALC website (4).

So this is where the questions to HALC and Zemenidis himself begin. According to the tax return submitted by the organization for the year 2018, assets (assets) of approximately $3,042,000 are declared as well as similar numbers of liabilities (liabilities – $3,012,000).

From what KALAMI mentions and what we were able to find out, the great benefactor of Zemenidis and HALC was the blessed Nikos Mougiaris, a great patriot who, with his great financial wealth, helped in every way the struggle for Cyprus. Apparently, Nikos Mougiaris gave every year (since the founding of HALC in 2012) a significant amount of up to 700,000 dollars annually to support the organization. (You can see the will here and below HALC MOUYIARIS LAST WILL)

These amounts were given as a loan. This is proven on the one hand by the tax declarations of the organization, on the other hand by the will of Nikos Mouyaris of October 31, 2018, where on page 7, article six, he states: “I donate all the debts of the organization HALC, Chicago, Illinois.”

From this statement as well as from HALC’s 2018 tax statement ( link here HALC – TAX RETURNS 2018), the following questions arise that require answers from Mr. Zemenidis:

1. Why declare the sponsorships of Nikos Mouyaris as a loan? Is it to avoid taxation for the organization? Since Nikos Mouyaris’ loan was forgiven after 2018, are all of HALC’s political activities retroactively taxed? If so, how much does HALC owe the US IRS? But in HALC’s tax return, there are several other interesting facts: Page 1 lists total compensation for its directors of about $370,000.
2. On page 7 there is a list of governors with President Zemenides, vice president George Tsounis (now American ambassador in Athens), and several others. Next to Zemenidis’ name, he works 45 hours a week, but for none of his associates, there is pay, only zero “0”. But on page 10, we again see total fees plus payroll taxes of about $370,000. Explanations are needed here from Mr. Zemenidis. How much does each of the administrators, workers, and Zemenidis himself get?
3. In 2018 HALC had revenues from contributions and grants of $453,765. In the same year, they had expenses of $716,129, resulting in an annual loss of $262,364. In 2017 the annual loss was $344,569. In 2016 the annual loss was $350,523. In 2015 the annual loss was $365,072. The organization has operated with a loss every year since at least 2012. The combined yearly losses between 2012 and 2018 were $2,986,948. This amount almost equals the total combined loans from Mouyiaris. It is safe to assume that the loans from Mouyiaris were given to HALC each year to cover the organization’s annual losses, and HALC used the proceeds from the loans to do exactly that. Then why does HALC report the Mouyiaris loans as both assets and liabilities in its 2018 tax filings when almost all of the loan proceeds were used up to cover the annual losses and the loans could only be a liability on the organization’s balance sheet, but not an asset.
4. What were HALC’s other sponsorships, and specifically to which news media?
5. In April 2019, the Niarchos Foundation gave HALC (in memory of Mouyaris) $1 million to support its scholarships. Why does the organization not present an account of using this amount? Why didn’t he file a tax return from 2019 onwards? (We always rely on the information on the US IRS website for non-profit organizations which is a public document).
6. But the most important of all questions is the character of HALC itself. A look at the organization’s website, Hellenicleaders.com, will convince even the most unaffiliated that the organization has little to do with education and that its activities are almost exclusively political. For example, take a look here, here and here. But as we explained above, since, in practice, it is a political organization that carries out political lobbying activities in America, then it must pay the corresponding tax. Can Mr. Zemenidis prove to us that all the collections/revenue of the organization plus the loans which the late Nikos Mougiaris donated were spent exclusively for the organization’s declared mission?

These and more are the many questions awaiting an answer from Eddie Zemenidis. Until he answers, he has no right to mislead everyone in Greece and America and present himself as a “God ex machina” who is a “super achiever” – when the primary beneficiary is himself.

And finally, there is also a significant moral issue that concerns Mr. Zemenidis himself and his associates, especially the current American ambassador in Athens, George Tsounis, who must explain what they knew and when they knew it.

REFERENCES

1.  Foreign Agents Registration Act of 1938

FARA mandates that you must register before acting as an agent of a foreign principal.  Under Section 612(a) of FARA, parties must file a registration statement within 10 days of having agreed to act as an agent of a foreign principal.  A party may not begin to act as an agent of a foreign principal before registering.  See 22 U.S.C. § 612(a).

Foreign Agents Registration Act | Frequently Asked Questions (justice.gov)

2. Η αποστολή του HALC (copy and paste, από φορολογική δήλωση -990, IRS- 2018, ΕΙΝ 26-4103685): «Mission… THE PURPOSE OF THE ORGANIZATION IS TO PROMOTE PUBLIC EDUCATION AND ADVOCACY EFFORTS FOR ISSUES OF INTEREST TO GREEK AMERICANS AND WORLDWIDE HELLENISM. PUBLIC EDUCATION EFFORTS ARE CENTERED AROUND THE FOLLOWING: (A) A NEWS AGGREGATOR SITE FOR PUBLIC TO BE EDUCATED ABOUT NEWS CONCERNING GREECE, THE GREEK DIASPORA, AND REGIONAL DEVELOPMENTS RELEVANT TO WORLDWIDE HELLENISM; (B) A BLOG, FACEBOOK SITE, AND TWITTER FEED; (C) A LECTURE SERIES; AND (D) A LEADERSHIP TRAINING CURRICULUM».

3. Social Welfare Organizations

The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. However, a section 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity. However, any expenditure it makes for political activities may be subject to tax under section 527(f). For further information regarding political and lobbying activities of section 501(c) organizations, see Election Year Issues, Political Campaign and Lobbying Activities of IRC 501(c)(4), (c)(5), and (c)(6) Organizations, and Revenue Ruling 2004-6.

Social Welfare Organizations | Internal Revenue Service (irs.gov)

Political Campaign and Lobbying Activities of IRC 501(c)(4), (c)(5), and (c)(6) Organizations

May IRC 501(c)(4), (c)(5), or (c)(6) Organizations Engage in Attempts to Influence Legislation (Lobbying)?

Yes. Organizations described in IRC 501(c)(4), (c)(5), and (c)(6) may engage in an unlimited amount of lobbying, provided that the lobbying is related to the organization’s exempt purpose.

Microsoft Word – L.Political campaign activitiesFINAL.doc (irs.gov)

Types of Organizations Exempt under Section 501(c)(4)

Internal Revenue Code section 501(c)(4) provides for the exemption of two very different types of organizations with their own distinct qualification requirements. They are:

Social welfare organizations: Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, and

Local associations of employees, the membership of which is limited to the employees of a designated person(s) in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational or recreational purposes.

Homeowners associations and volunteer fire companies may be recognized as exempt as social welfare organizations if they meet the requirements for exemption. Organizations that engage in substantial lobbying activities sometimes also are classified as social welfare organizations.

Types of Organizations Exempt under Section 501(c)(4) | Internal Revenue Service (irs.gov)

4. Join the movement! Become an official HALC member today.

We need you! Everyday, HALC fights for the issues that matter most the Hellenic community. This vital work could not be done without the generous contributions of our supporters.

HALC needs your support to ensure we can continue our efforts. We offer three membership levels — $250, $1,000 or $2,500. You can also choose to donate a different amount. You can choose to pay in one payment or split your donation into 12 monthly payments per year or 4 quarterly payments.

Please note that donations to our 501(c)(4) advocacy work are not tax-deductible.

===================

ΠΗΓΗ – newsbreak.gr