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Death by Stupidity

As many of you know, I have a low threshold for stupid. As a matter of fact, I had even once drafted legislation dubbed “The Kick-Me Rule” allowing each American to kick one stupid person in the head per day.

So you can imagine my joy at discovering how ridiculous the bankruptcy law situation is in the United States.

Some of you may have heard the ridiculous situation in which THE INSTITUTE on Religion and Public Policy finds itself.

For two years, THE INSTITUTE received monthly contributions from a donor based in Miami, Florida. His contributions came to nearly $30,000.00 and helped pay our rent and overhead expenses.

Recently, the donor’s business – from which he contributed to THE INSTITUTE – declared bankruptcy. One of the major loopholes in bankruptcy law is that when a corporate body (law firm, dental practice, doctor’s office) declares bankruptcy, contributions they make to houses of worship and non-profits must be returned.

In other words, THE INSTITUTE must now return to the court the entire $30,000.00 the donor contributed.

The great irony is that had the donor used that money to gamble at a casino, purchase drinks at a bar or buy a car, neither the casino owner, the bar owner nor the car dealer would have to return the money.

Only houses of worship and nonprofits are affected by these cases.

And let’s face it, People, THE INSTITUTE doesn’t have $30K. As a matter of fact, were you to review our 990s from last year, you would discover that the majority of funds (nearly $82,000.00) came out of my own pocket to run the organization.

Another great irony is that back in 1998 I worked on something known as The Religious Liberty and Charitable Donation Protection Act of 1998. That act provides important protections to tax-exempt non-profits. One of the key protections prevents a bankruptcy trustees (absent fraud) from recovering a bankrupt debtor’s charitable contributions from a not-for-profit, if the amount of the contributions does not exceed 15% of the debtor’s income or, if it does equal more than 15% of the debtor’s income, if the contributions were consistent with donation amounts in earlier years.

Unfortunately, The Religious Liberty and Charitable Donation Protection Act of 1998 only applies to individuals. It does not apply to any corporate entity, even small businesses like doctors and dentists.

Another fabulous bankruptcy ridiculousness we discovered is that one does not have to physically receive a notice and sign for it like one does in other lawsuits. According to bankruptcy law, simply using the US mail is an assumption that the suit will be received and therefore you are in receipt of it.

Yet another way in which the banks who are the great beneficiaries of bankruptcy suits sticks it to the little guy.

It isn’t enough that Lehman Brothers and Bank of America and countless other major Wall Street banks nearly caused the bankruptcy of the United States and most of Europe, but now thanks to their need to recoup every penny they ever loaned out, major Wall Street firms will be responsible for the bankruptcy and closure of THE INSTITUTE on Religion and Public Policy.

Nobel Peace Prize nominations, countless lives saved, innumerable laws changed – all to protect basic human liberties and rights. Yet all that will be gone because our friends on Wall Street think it’s more important that they get their money than that small non-profits who do the lion’s share of social and human rights work continue to function.

Well, let me say this here and now for the record: Woe to the Wall Street hot-shots if indeed THE INSTITUTE must close because of this situation. If after almost a dozen years of fighting for religious freedom, of fending off attacks from foreign governments, and of having such tremendous success in advancing religious freedom we are shut down because of loopholes in bankruptcy law and Wall Street greed, such a legislative and media fury will be unleashed that they won’t know what hit them.

Despite everything, THE INSTITUTE may well be brought down by stupid…

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