In this article I am going to expose what I sincerely believe to be an example of one of the many types of fraud schemes that members of Progressive Yamhill (PY) have been engaging in; unbeknownst to voters of the County, which have been orchestrated among notable members of the group with the assistance of public officials who are complicit in diverting the public’s money into these fraudulent schemes. Many of these frauds involve nonprofit organizations. PY purports to be a social activist group whose primary motivation for its organizing is to create social change aligned with its political ideology and in many ways it does achieve this; however, it is my opinion the political activism is designed to provide cover to distract away from significant financial fraud that comes to fruition once its members obtain control over City Councils. I believe this fraud is a key motivation for members of the Progressive Yamhill group to stay loyal to it and fiercely defend the public officials who enable the schemes to exist.
While this article is lengthy, by the end of it, I am confident any objective reader will arrive at the same conclusion I have. The Newberg Downtown Coalition (NDC) seems to be a fraudulent charity that is designed to illegally divert public money from the City of Newberg to a small number of businesses owned by PY members.
Note: I have additional information about NDC activities, as I am still investigating, with a publish date set in the near future. This article will be published now with the current information I have due to a recent council seat appointment. The seat was appointed to Molly Olson one of the individuals involved in the fraud I have investigated. She was appointed by her fellow PY co-conspirators and I believe the public deserves to know more about this now rather than later.
The Beginning of My Investigation into the Newberg Downtown Coalition
On September 18th, while writing my previously published article, Newberg City Council to Vote on Non-Traditional Contract Process, Award Yet More Money to Newberg Downtown Coalition, I noticed something buried at the bottom of the Newberg Downtown Coalition’s letter to City Councilor Elise Hollamon requesting $20,000 of public money.
What stuck out to me was the following words, which I have highlighted in yellow,
Specifically; this is what I took notice about:
- The claim that the Newberg Downtown Coalition has a 501(c)(3) nonprofit status.
- The use of federal ARPA covid-19 relief grant money for a gift card program that benefits businesses who are part of the Coalition.
- Other activity that directly generates income for business members of the Coalition.
There are several important problems with this that suggests the Newberg Downtown Coalition is engaging in charity fraud. In this article I will explain in detail why I believe this to be the case.
What is the Newberg Downtown Coalition?
The Newberg Downtown Coalition (NDC) is a registered 501c3 charity that based on Oregon state records was formed on January 1st, 2010 by Rob Felton, Polly Peterson and Maureen Rogers as a public benefit with members and a registry number of 66001695.
It claims that its mission is,
THROUGH PHYSICAL IMPROVEMENTS, EVENTS, PROMOTIONS AND THE PROPER BUSINESS MIX, WE’RE MAKING DOWNTOWN NEWBERG INTO A DESTINATION THAT ENRICHES THE LIVES OF THOSE WHO VISIT AND LIVE HERE.
It claims to operate three programs,
- PROMOTING HISTORIC PRESERVATION BY SECURING GRANTS.
- SPONSOR EVENTS IN THE DOWNTOWN CORE WITH THE PURPOSE OF BRINGING PEOPLE INTO THE DOWNTOWN AREA.
- PROVIDE SUPPORT FOR THE MAIN STREET PROGRAM AND PROMOTE VITALITY IN THE DOWNTOWN AREA.
According to the City of Newberg website page on its Urban Renewal plans and the tax increment financing plan, NDC is directly involved in city committees by its members expressly appointed to the Citizen’s Advisory Committee due to their membership in NDC,
NDC operates farmer market style events such as Wednesday Market and First Friday / Artwalk where it charges vendors a fee for the booths. It also charges businesses a $200 a year “membership” fee, which in emails I have received NDC informs its “members” is tax deductible (more on this later). It has a number of committees such as a Downtown Beautification Committee and Public Art Committee which focus on projects that are designed to improve tourism to the downtown Newberg shopping area, primarily centered on businesses on 1st Street near Newberg City Hall.
NDC publishes so little information about itself that charity watchdogs such as Charity Navigator know almost nothing about it. GuideStar has very little data as well. ProPublica states the NDC non-exempt entity class (NTEE) is Historical Societies, Related Historical Activities (Arts, Culture and Humanities). According to ProPublica it failed to file tax reports from 2010 to 2017 and lost its tax exempt status but regained it in 2018.
The last tax filing I could find for it was in 2020 where it reported $89,314 in revenue, generating $4,860 in member dues and $84,454 in donations and grants. The bulk of its expenses are activities that advertise its members’ business and encourage shopping in downtown Newberg.
Why the Newberg Downtown Coalition is a Fraud
First of all, the Newberg Downtown Coalition has an incorrect entity type for the kind of activities this nonprofit is engaged in. A 501(c)(3) is strictly for religious, educational, charitable, scientific, literary, testing for public safety, fostering national or international amateur sports competition, or prevention of cruelty to children or animals organizations. 501(c)(3) nonprofits are restricted by law from engaging in any activity that would directly benefit a business or group of businesses; that is to say, while a private business can engage in activity that directly benefits a 501(c)(3) nonprofit (such as making charitable donations to it or hosting fundraisers for it) a 501(c)(3) cannot spend its money and resources to benefit any privately owned businesses. More on this can be found on the IRS website explaining the exemption requirements of 501(c)(3) organizations.
An example of a prohibited activity would be applying for and receiving public grants to create a gift card program those cards are only redeemable at a small group of privately owned businesses. And yet, this is exactly what NDC did in the development of the Berg Bucks Program, which I will discuss in more detail later in the article.
The Newberg Downtown Coalition’s activity makes it clear they are supposed to be incorporated as a 501(c)(6), as the activities of this nonprofit make it a business league. A 501(c)(3) is not legally permitted to engage in the kinds of activities the NDC has historically and is presently engaged in.
Consequently I believe the NDC’s operations may be illegal and it can be correctly argued they have defrauded those they have received donations and grants from as they are not engaged in legitimate charitable work. This also means any tax write-offs which businesses filed for on their tax returns, including writing off membership dues or donations to it, were filed fraudulently as well, which makes members of NDC who were unaware about its fraudulent nature at risk of audit by the IRS.
Secondly, even if NDC had filed as the correct entity type, a 501c6 is still not allowed to take tax exemptions on things like a gift card program or promotion of members’ businesses; a 501c6 must still pay taxes on these kinds of programs and declare them in tax filings.
This is important because it is my belief that the NDC was created by those involved with the Chehalem Valley Chamber of Commerce (CVCC) as a way to obtain grants and apply for tax exemptions on activity that they knew they could not obtain using the 501(c)(6), CVCC. In fact, the relationship between the NDC and the CCVC are mirrored; the leadership in the Chamber is also involved with the leadership of the NDC. For example, Kristen Stoller (who has been reported to the IRS as a board director of NDC) is married to Francesco Stoller who is Secretary in the CVCC and on its executive committee. Polly Peterson, who in the past has been NDC’s executive director, is also on the CVCC board as well. There is also enormous crossover between NDC member businesses and the CVCC as well, with NDC essentially being a smaller group of the same businesses who are members of CVCC.
In at least one instance I can prove the grant money received by the NDC is diverted over to the CVCC. This is proven by examining the “Newberg Berg Bucks” program, where the gift cards created by NDC grant recipient money and which are advertised to consumers by NDC are actually sold through the CVCC. I will talk about this in more detail later in the article.
Who Runs the Newberg Downtown Coalition?
As with the Chehalem Valley Chamber of Commerce 501(c)6 business league (which I noted in a prior article), the Newberg Downtown Coalition is also controlled by Progressive Yamhill members. This is important because it is my conclusion, the NDC primarily is a way to avoid paying taxes on activity that largely benefits businesses in Newberg owned by PY members and it works in cooperation with the Chamber to achieve this result.
I started this article by mentioning the recently appointed to Newberg City Council Molly Olson. At the time of this writing she is the president of its Board of Directors but had very recently been acting as its executive director, a role she has held in the past before as well. There are several other people who are on its board at present, although admittedly the board seems to frequently rotate its members throughout the year which makes it difficult to track exactly who is on it at any one time. I believe this may be intentional as a way to attempt to hide its activities. It is extremely unusual for such constant rotation of a 501(c)(3) board. I will discuss more about this later in the article.
Here is some information I have obtained of NDC leadership from past tax filings and website page postings. This will help illuminate who has been a key player in this fraudulent charity.
The Board director list that was reported to the IRS in 2020 was nearly identical as 2019, only changing Polly Peterson for Britta Stewart and Joe Hannan for Loni Parish.
Based on my research it appears Stewart, Peterson and Molly Olson frequently rotate taking on the role of executive director during any given year and have been passing the torch between each other since at least 2019. The reason for this behavior is unclear to me but I have a theory, which I will talk about later in this article.
The people I have been able to identify as past and current board directors based on its filings and public announcements on its website pages (retrieved using the Wayback Machine internet archive system) are as follows;
- Rob Felton is the President of the Coalition; he is also the Chief of Staff at George Fox University,
- Terry Emery was Treasurer; who is also the owner of Want & Emery CPA.
According to her bio on her company website, Emery has been president of the Newberg Rotary several times in the past.
- Maureen Rogers was the Secretary; who is also the owner of Chapters Books. It is my understanding Rogers received a grant through the NDC which it applied for on her behalf to repair the Chapters Books buildings despite that records show she was Board director of it during this time. This is an important element which I will discuss in more detail here shortly.
As a side note, I believe it is worth mentioning that Mauren Rogers’ daughter is former Newberg City Councilor Elizabeth Curtis Gemeroy Rogers; another Progressive Yamhill member. This connection is publicly acknowledged on Gemeroy’s PAC page for her campaign for City Councilor,
- Allyn Brown was listed as Director in 2018; he is an attorney based in Newberg, Oregon who is a founding partner of Brown, Tarlow, Bridges & Palmer, PC with notable Progressive Yamhill member John Bridges.
- Joe Hannan was, during 2018 while on the board of the Newberg Downtown Coalition, also working as the City Manager of Newberg, and per a Newberg Graphic article he retired in 2019. This I believe creates some interesting conflicts of interest with the City management and the NDC activities during this time.
- Mike Ragsdale, owner of Ragsdale Consulting and is also Secretary of the Chehalem Parks Foundation
- Dennis Lewis is the owner of Lewis Audio Video, and he is also on the Friendsview Board.
- Jennifer Sitter is the owner of Pulp & Circumstances and I believe it is worth noting she was quoted in a Newberg Graphic article about how great the gift card program is without disclosing her own direct ties to the group.
- Kristen Stoller is the owner of Chehalem Valley Dance Academy and she is also cofounder of the Community Wellness Collective with current Newberg City Councilor Elise Hollamon. I’ve written at length about her activities with Progressive Yamhill in past articles.
- Molly Olson lists herself as a retired Intel director but she still owns a business in Newberg, Molly S Olson Consulting. registry number is #146582994. At present Olson was nominated to fill the vacant seat on the Newberg City Council left by the passing of Denise Bacon.
I should note that the above individuals are only what is shown on the Board for the most recent tax filing they made. In truth they appear to regularly shuffle who is sitting on the Board of Directors during any given year since 2019.
Additional board members include:
- Loni Parrish; daughter of Ken Austin, founder of A-dec, and present owner of ART Elements Gallery as well as several other rental properties in downtown Newberg.
- Paul Losch; owner of Ruddick/Wood restaurant and bar (from March 8, 2022)
- Polly Peterson; former Newberg School Board Director (from 2011 to 2017) and Assistant Writing Professor at George Fox University. Peterson has served as executive director of the Newberg Downtown Coalition several times.
- Rick Rogers; Mayor of Newberg (from 2018 to 2020) and Executive Director of Newberg Habitat for Humanity, whom I have written about already in prior articles (article 1, article 2, article 3)
- Britta Stewart Mansfield, who has served as executive director of NDC and is presently serving that role for Willamette Falls and Landings Heritage Area Coalition. She is also a board member of the Newberg Area Historical Society.
There are additional members I have identified as having been on the Board and in the next sections I will explain how relevant they are to the fraud I am discussing in this article.
My Theory for Why Newberg Downtown Coalition Engages in Board Director Shuffling
I believe this board director shuffling behavior is due to a misguided belief that if members resign from the Board and are replaced by others, then the resigned no longer can be considered to have conflicts of interest with the NDC in their personal dealings with it as a business owner. Unfortunately for them, this is not how 501c3 charities work, and just because you recently resigned from the Board does not mean it is legal to then turn around and receive special benefits outside of legitimate charitable activity from the 501c3 you clearly have strong involvement with since you were a Board director of it. Your relationship to the other Board directors did not vanish overnight.
The reason I hold this belief is because during the same year Maureen Rogers was still legally on the NDC board of directors as its secretary, Rogers became the recipient of a historical building improvement grant awarded by the State of Oregon which was used to repair the Chapters Books building she and her husband own. That the NDC was used to secure the grant is stated in a Newberg Graphic article, Chapters Renovation Nearly Complete written by Gary Allen on November 5th, 2017.
From the article,
Per Oregon state records, Maureen Rogers co-founded the Newberg Downtown Coalition in 2010. It filed no taxes from 2010 to 2017, and its 2018 tax filing still listed Maureen Rogers as a director on its board in the same role as secretary as when the NDC was originally incorporated.
It is not genuine charitable activity to apply for a grant to improve the value of your private commercial business and real estate holdings using a 501c3 you co-founded and serve as a board director and officer of. The claim the grant was charitable because the building is old is irrelevant to the fact that the building is prime commercial real estate and is privately owned by Rogers and her husband, who use it to operate a privately owned business.
I believe that the leadership of NDC realize this is fraudulent charity activity and in an effort to evade regulations have formed the entirely mistaken idea that if they simply resign as a board director and/or officer of NDC, receive benefits from the charity and then later re-join its board so someone else can have a turn at enrichment, that “board director swapping” will eliminate any conflicts of interest. It’s the only logical explanation I have arrived at for such bizarre behavior when I consider the situation with the Chapters Books grant and Rogers.
The Berg Bucks Program Is Not Charitable Activity
I believe the Berg Bucks gift card program provides significant evidence of the kind of charity fraud the Newberg Downtown Coalition (NDC) is using to orchestrate the personal benefit of those who control its board.
For those unfamiliar a gift card program is a prepaid credit card that can be purchased by consumers and can only be spent at a select participating retail store. When customers buy a card, it already has a cash value associated to it with funds held by a bank account that is tied to it. In this case the Berg Bucks cards can only be used at a very small number of participating businesses in Newberg that are “members” of the NDC (and It put “members” in parentheses because the NDC is not structured as a member org 501c3 which means participating businesses do not get voting rights for who sits on the board).
You can read the grant request proposal submitted to the City of Newberg about the program by clicking here.
The Berg Gift Card (BGC) program is not for any charitable cause as it is instead used to presell purchases at private businesses. Most of the associated businesses in the NDC are bars. It must be stressed that it is not legitimate charitable activity to make a gift card program so people can buy liquor and wine using public money.
The BGC is expressly used to benefit private businesses as explained on their own website page about the Berg Bucks program.
The NDC expressly tells consumers to spend these gift cards at the private businesses they directly promote, which again, is not a legitimate charitable cause.
Furthermore, the cards are advertised to the public as purchasable from the CVCC, which is a 501(c)(6) business league. This is further evidence that the CVCC is using the NDC as a way to receive grant money for programs it is directly operating, and bypass requirements set by grantors that disallow 501(c)(6)’s as recipients. The scheme appears to work in this case by NDC apply for grants on behalf of the CVCC and its leadership, which the CVCC may would not have been eligible to receive directly. After receiving the grant and creating the gift card program with a vendor NDC then transferred the operation of the created program to the CVCC, such as the sale of the cards. The proof of the intention of the gift card program to flow through the CVCC as merchants come from the NDC’s own social media postings and its own website pages information,
Furthermore, as previously mentioned, Kristen Stoller and Loni Parrish have been board directors of the NDC. The embedded photos show the NDC promoting their businesses as part of the gift card program and also encouraging people to purchase Berg Bucks from the CVCC to spend at their businesses in violation of 501c3 regulations. This is not legitimate charitable activity.
The other important detail about the gift card program is that based on posts from within the Newberg Equity in Education (NEEd) Facebook group, the CVCC rewards its members with gift cards for making presentations aligned with the political ideology of Progressive Yamhill.
Below is a thread from within the NEEd group from August 21, 2021 where former Newberg School Board Director Brandy Penner admits that she sent an email to others at the CVCC committee requesting their buildings hang up signs expressing their political ideologies, as well as place lawn signs all over the school yards. Penner notes that the idea was originally proposed by John Bridges, a board director of the CVCC.
In the comments it is noted they (NEEd) can use the gift cards provided by the CVCC to reward their members who are school employees that make “equity and inclusion” presentations, and another teacher notes they are distributing Black Lives Matter bracelets with the gift cards.
Take note that then NDC executive director Polly Peterson participates in this thread and the organizing of this activity.
Here is an example of the gift bags they gave to the teachers for these ‘equity’ panels,
Here is NEEd member David Jaimes (also a school board director in Tigard) bragging inside the NEEd group about one of these presentations that he and former Newberg School Board Director Ines Pena created,
I view these posts as supporting evidence that one of the motivations for creating gift card programs by the PY group, is to use those NDC gift cards as a reward for their agents in the group. The social media posts prove that PY members who were using gift cards as a reward mechanic during the Newberg Schools Saga where teachers and other staff who are members of PY’s subgroup, Newberg Equity in Education, used their positions to organize harassment of conservative school board directors Dave Brown, Brian Shannon, Renee Powell and Trevor DeHart while simultaneously using their access to students to indoctrinate them into fringe political ideologies with the goal of recruiting the kids into becoming social activists and voters of the Democrat party.
I believe that with the Berg Bucks program they developed a means to divert City of Newberg money into a gift card program that would be controlled by their members in the NDC and CVCC, and can therefore be used as a reward for their agents as discussed in the secret Facebook group posts I have shown above.
Another consideration is that gift card programs are frequently used by companies in a number of accounting manipulation schemes to allow companies to over or under report revenue as desired during a particular year in order to manipulate company valuations and tax obligations. While I have yet to obtain evidence of this occurring in NDC businesses, it could be an additional motivation for why the Berg Bucks program was created. I believe the program should be audited to expose any such fraud which may have occurred using one of these accounting manipulation schemes.
Marketplaces are Not a Charitable Cause
A 501(c)(3) must not be primarily devoted to private benefit, which is a broad category. The legislation refers to private benefit activity using the word ‘inurement’ (benefit) and the Internal Revenue Manual has a lengthy chapter about this topic.
On pg. 3 of the PDF I linked to above, the IRS provides an example of what activity does not qualify as a charitable cause from a prior ruling of the tax board,
The Newberg Downtown Coalition is engaged in similar non-charitable conduct:
- It’s activities benefit a small number of member businesses, many of which are owned by its current and former board of directors.
- It applies for and has received grant money from a city that is expressly for a gift card program that is spent at their businesses, which is not a legitimate charitable activity.
- It created the gift card program in cooperation with a 501(c)(6) business league (Chehalem Valley Chamber of Commerce) which, per its director’s own admittance during the city council meeting, the 501(c)(6) is not be able to apply for the grant themselves.
So it is evident by these facts that the NDC was used to obtain tax free grant money for what is actually a business league and not a genuine charitable organization, to enrich themselves with public money from the City of Newberg.
There are some people I have spoken with during my investigation about the NDC who have attempted to defend the organization by claiming the work is for a small number of small businesses in the area and so this must make its activities a charitable cause. However as the IRS handbook quote I showed above explains, that is actually the opposite; being a small number of businesses actually means it’s activities are more likely to be viewed by the IRS as a non-charitable cause.
While a 501(c)(3) can certainly have as its charitable cause the promotion of tourism, it’s not allowed to make its primary focus activities which serve a private benefit, such as organizing and advertising what are essentially farmer markets in a shopping center (the downtown Newberg area) and directly advertising the businesses of its members, especially those who sit or have sat on the ever revolving door that is its board of directors (such as it regularly does on its social media pages). Nor can it create gift card programs on behalf of other businesses.
The Internal Revenue Manual offers yet another example when discussing ‘Benefit’ definitions,
With that in mind, it is plainly clear that the purpose of organizing markets by the NDC is solely to advertise private businesses and that this cannot be considered a charitable cause.
Proof that NDC’s primary reason for promoting the markets is to promote the private businesses comes from social media posts made by the NDC Facebook Page;
Newberg Downtown Coalition Pushes Fringe Political Ideas
In addition to not engaging in genuine charitable activities and instead devoting itself to benefiting a small group of business owners who are nearly all involved in Progressive Yamhill, I have also noticed NDC is used to advocate for the same fringe political ideas of every other Progressive Yamhill project that is designed to create the illusion of legitimacy for.
Here is an example,
‘Racial equity and inclusion’ and ‘diversity and inclusion’ are specific phrases in the context used here which advocate specifically for Critical Race Theory ideology. This is similar phrasing to that which Newberg Equity in Education (NEEd) members used in their Pro-CRT manifestos, such as the post made by Beth Woolsey when she wrote the NEEd mission statement that specifically stated the goal was to change Newberg Public Schools policies to align with CRT ideologies.
Please also note that Beth Woolsey specifically mentions the Community Wellness Collective operated by Kristen Stoller and Newberg City Councilor Elise Hollamon. Woolsey mentions NEEd is designed to bring the leaders of multiple groups in Newberg together as affiliates. This will become relevant later.
Anyone who reads this entire post by Woolsey, which I discovered pinned into the secret NEEd Facebook group that is used by members of Progressive Yamhill who reside in Newberg to organize Newberg specific activities, can clearly see the meaning of phrases such as ‘Racial equity and inclusion’ and ‘diversity and inclusion’ are specifically in the context of Critical Race Theory ideology. When you see any entity controlled by Progressive Yamhill members using these phrases, that is what they are actually saying. They do not mean the mainstream Common Humanity approach to racial diversity such as that championed by Martin Luther King Jr. They are instead specifically referring to these ideas as defined with CRT extremism.
(if you are unfamiliar with what Critical Race Theory is and why it is a form of racist extremist that masquerades as genuine anti-racism, please read my detailed article, What is Critical Race Theory And How Does It Influence Decision-Making? )
While I cannot publish their identities or any specific details without subjecting my sources to harassment by PY members, throughout my investigation I have heard stories from local business owners who have stated the Newberg Downtown Coalition and Chehalem Valley Chamber of Commerce leadership frequently pressure business owners to conform to Critical Race Theory ideologies, which does include hanging trans-racial pride flags and Black Lives Matter flags in the windows of their businesses. This is also not legitimate charitable activity for a 501(c)(3).
How Newberg City Council Members Have Been Complicit in the Fraud
As reported by the Advocate in a prior article, the City of Newberg has awarded $68,519 in grant funds to the Newberg Downtown Coalition from the ARPA funds in February 2022. I will now describe in detail how this award was not only unethical but also illegal.
First of all, the awarding of the ARPA money was done by secret ballot using an internet computer application called SurveyMonkey, which violates Oregon state law. ORS 192.650 requires all votes to be recorded clearly, including who voted and how they voted.
The secret ballot process hid from the public which of the 11 members of the budget committee voted to award grant money to applicants. Their names were not provided with information for how they voted, and so a violation of the law occurred.
Of special note is that Molly Olson, who was on the board of directors of the Newberg Downtown Coalition at the time, was one of the members of the Newberg Budget Committee that cast a secret ballot to determine which applicants would be funded. The evidence is from the City of Newberg’s own paperwork,
NDC ultimately applied for and received $68,519 of the ARPA money during these illegal proceedings.
I also want to point out that during this same secret ballot award process Elise Hollamon herself applied for grant money for the Community Wellness Collective (CWC) with a project titled Newberg Harvest House, which is operated by the CWC which she runs. She declared conflict of interest during the presentation however the existence of the secret ballot shows proof that the voting was ethically compromised and illegal. The relevant section of the meeting where Hollamon admits conflict of interest is at 1:52:44 Furthermore City Councilor Stephanie Findley, who is a paid employee of CWC and is the hiring manager for Harvest House, also admitted her conflict of interest. Both attempted to underplay the seriousness of the conflict of interest by claiming they would not personally benefit from the grant award, which is an outrageous lie considering the grant money is going to their own associated nonprofit instead of another applicant who is not on the committee. By sitting on the budget committee Hollamon and Findley should have been disqualified from applying for grant money from that same committee. NDC should also have been disqualified from the application process as well since Olson, Hollamon and Rick Rogers were board directors of it at the time.
Furthermore Hollamon and Findley did publicly vote for determining whether grant applicants would be partial or fully funded, which absolutely benefited their own company and grant request. This vote took place around 2:16:57 of the meeting.
You can also see from the meeting packet notes that Molly Olson was the Chair of these proceedings. This same packet also refers to the secret ballot as ‘voting digitally’ and hides which members of the Budget Committee cast votes and for which projects they voted, which is illegal.
Sometime after this meeting Polly Peterson was replaced by Molly Olson as the executive director of the Newberg Downtown Coalition. Then during the September 19th Newberg City Council meeting I previously reported on, City Councilor Elise Hollamon submitted a request for additional grant funds from Fund 14, an economic development fund of the City of Newberg. The Council voted to award $20,000 to pay the salary of NDC’s executive director, who at the time was Molly Olson.
You can see this for yourself during September 19th Newberg City Council meeting at 1:23:08 where Molly Olson begins her presentation.
To make it easier for readers I have uploaded a clip of this segment of the meeting to the Yamhill Advocate YouTube channel,
I want readers to take note that Olson admits during the meeting the reason that the NDC is registered as a 501(c)(3) instead of as a 501(c)(6) is to apply for grant money that a 501(c)(6) would be ineligible to obtain. Olson also discusses that charities cannot engage in political lobbying. This is an admission Olson is aware of the laws the NDC is violating regarding what charities can and cannot do.
Hollamon also admits during the meeting she was contacted to make the request of City Council because she serves on the NDC board, an enormous ethical conflict of interest.
I want to note that during my investigation several people tried to claim to me that it is perfectly legal for city officials such as Rick Rogers and Elise Hollamon to be requesting businesses they are associated with as members of its board of directors for city money and even voting to award that money during city public meetings.
While it seems at the state law level there is a loophole which can permit this if the public official claims they receive no remuneration, the reality is that all board directors of a private corporation such as a 501(c)(3) are an agent of that business who by law have a fiscal responsibility to it. This creates a conflict of interest. Furthermore, you do not need to presently make any money from your association with a business for a conflict of interest to exist. This is because if a person has influence over a business they can always be rewarded later with the money that has been awarded to that business. This is why conflict of interest laws exist in the first place.
In fact, the situation with Molly Olson is a prime example of how someone who is on the board of directors of a nonprofit (Newberg Downtown Coalition) has a conflict of interest while acting as the Chair of the City Budget Committee that awarded significant grant money to that same nonprofit during proceedings while Olson acted as Chair. This is because after the City awarded substantial grant money to the NDC, Polly Peterson and Molly Olson swapped roles again, with Olson now returning to the position of executive director as she had previously held in the past. Olson then appeared before City Council on September 19th asking for the City of Newberg to award a $20,000 grant to the NDC for the purpose of paying a salary to the NDC executive director, who was Molly Olson herself at this time. Furthermore both Elise Hollamon and Rick Rogers were stated to be on the board of directors of the NDC during this meeting in which they voted to award the grant to pay Olson’s salary.
An important detail to bear in mind is that Hollamon’s own Community Wellness Collective (CWC) received $350,000 from the ARPA money during the February budget proceedings Olson had Chaired. Furthermore, $400,000 had been awarded to the Peace Trail Village project that both Roger’s Newberg Habitat for Humanity and Hollamon’s CWC is a strategic partner on, the award of $20,000 to the NDC to pay Olson as executive director could be viewed as a reward for Olson from the February ARPA proceedings where she permitted secret ballots to be used to decide award applicants.
All of this looks to me like a “you scratch my back, I’ll scratch yours” situation where they are taking turns creating a legal looking processes to enrich the businesses they are associated with using public money and which ultimately benefits them by funding the operations of those business they control and lead and projects they have vested interests in.
For proof of the role swapping on the NDC board, see below.
The following screenshot was taken from the NDC website just prior to the September 19th meeting,
This next screenshot was taken after the meeting earlier this month after Molly Olson was chosen by Progressive Yamhill members on Newberg City Council to replace Denise Bacon,
You can see that while Rick Rogers has left the board, Aubrey Nichols (owner of Honey Pie Pizza) has now taken over as executive director, Elise Hollamon has become listed on the board and Molly Olson is now listed as board president which previously Rob Felton had held.
This extremely high turnover of board directors and constant swapping of officer roles shows the nonprofit is being managed in an extremely irregular way that indicates fraud is occurring, especially once you look at the timeline of grants the NDC has received.
Going back to the presentation Molly Olson provided to the City Council about the activities of the NDC, the following slide was shown,
Not a single item on this slide is a legitimate charitable activity per the IRS rules I cited earlier in this article.
I also want to point out that Olson’s claims during her presentation about the NDC choosing 501(c)(3) status to apply for grants a 501(c)(6) is ineligible for does not appear to be applicable in the ARPA award situation, as a 501(c)(6) can obtain ARPA grants. The only reason I can think of for why they would funnel the money through a (c)(3) is to avoid having to pay taxes on the grant if it had been directly awarded to a (c)(6) such as the Chehalem Valley Chamber. Consequently the most logical conclusion I can draw for why they structured the grant request through the NDC and not the Chamber was to avoid paying taxes on the money.
Furthermore, NDC is defrauding the federal and Oregon state government by claiming to be a charity when it is actually not engaging in legitimate charity work. Improving small business revenues by lobbying for their interests and applying for grants for them is not a charitable cause. A charitable cause is defined by federal law as expressly non-commercial in nature. You cannot make a charity whose sole purpose is to improve the revenue of the small businesses owned by the people who are on the board of directors or any other business for that matter. That is illegal. They are actually supposed to be incorporated as a 501(c)(6), a business league (such as a Chamber of Commerce) which is a different class of nonprofit with larger restrictions and where donations are not tax deductible. They are defrauding the federal government by what they are doing.
This is not an opinion; this is fact. Section 501(c)(3); section 1.501(c)(3)- 1(c)(2) of US Code Title 26 plainly states the activities of the Newberg Downtown Coalition are not legitimate charitable activities. The NDC fails the organizational and operational tests described in federal law because its operations are not primarily for a genuinely charitable cause and thus it is a fraudulent charity.
- “Revitalizing” a downtown shopping district is not a charitable cause.
- Holding events for small businesses to sell their goods at is not a charitable cause.
- Applying for grants and giving that money to businesses or spending it on behalf of those businesses which have no association other than they are in the same city block area is not a charitable cause.
The purpose of the 501(c)(3) non-profit’s legal code is to create a structure for making it financially viable to engage in non-commercial business endeavors, and that is why they get tax exemptions. The tax exemption is not a way for private businesses to get money they don’t have to report to the government as income, nor are they vehicles for 501(c)(6) business leagues like the Chehalem Valley Chamber of Commerce and other private businesses, to obtain grants they are ineligible for and spend money on activities that benefit them without paying taxes correctly.
I would also say that the Newberg Downtown Coalition is defrauding its “members”; during the September 19th Newberg City Council meeting Molly Olson claims the NDC is not a “membership org“. This is in contrast to their filings with the state of Oregon where they claim to be a ‘Public Benefit with Members’.
Olson claimed during the Newberg City Council meeting that NDC, not being a member org, instead has “membership donations”. This is bizarre phrasing and I do not believe it is accurate to the statements NDC has sent in emails Molly Olson as President of the NDC has authorized, such as this letter sent out in June 2020 to Newberg businesses,
In email communications to local businesses NDC refers to these payments as required membership dues, not “donations”. NDC’s email also claimed that these payments are tax deductible. So Olson’s claim during the City Council meeting that the payments are merely a donation and not a member due entitling the business to voting rights in NDC is contradictory and further evidence of the fraudulent nature of NDC in how it represents itself to different parties depending on who it is requesting money from.
It should be pointed out that as a fraudulent 501c3 charity these “dues” are not tax deductible and any business who attempted to write off the payments will get those business eventually in trouble after the IRS inevitably revokes the NDC charity status, which I expect will be the result of the lengthy submission of information about its fraud I am supplying to the IRS.
This also likely means any grant money a business has obtained through the NDC may have been fraudulently obtained and may need to be returned, which will undoubtedly hurt the finances of businesses who may have been unaware about the fraudulent nature of the NDC’s 501(c)(3) status.
Furthermore, Molly Olson claimed during the City Council meeting that she was not the executive director of NDC and was merely “acting”. Legally, anyone who is “acting” as an officer role is for all intents and purposes holding that role and she therefore misrepresented herself and the affairs of NDC once again.
There is no other conclusion to draw from other than that Olson made many statements during the City Council meeting that are contradictory to other material NDC has published or filed with the IRS and the State of Oregon, and she therefore made misrepresent claims during the meeting she requested $20,000 of the Newberg City Council. As her inaccurate claims about NDC were used by Councilors in their decision to vote, the grant was therefore fraudulently obtained and should be revoked with the money paid back to the City of Newberg.
Lastly, during her presentation Olson admits the primary purpose of NDC is to make “downtown businesses thrive”. This is not legitimate charitable activity and it proves NDC is a fraud. The 501c3 status was obtained by NDC misrepresenting itself to the IRS and the State of Oregon as a historical preservation charity which is not its true purpose; it is instead a business league that serves the economic interests of a very small pool of businesses who are also members of the Chehalem Valley Chamber of Commerce (and unsurprisingly, nearly all of which are Progressive Yamhill members). The facts are clear that NDC has been designed to allow this small group to obtain grants they would otherwise not be able to obtain for their private economic interests but for the fraudulently obtained 501c3 status that NDC gained.
All of the money which NDC has obtained through its fraud should be returned immediately, including all of the money the City of Newberg has provided it over this past year. This includes all of the “membership dues” to businesses it has charged. All of the people on its board of directors throughout the years it has operated illegally as a charity are personally liable for this fraud and should be required to pay back any money NDC has spent that cannot be retrieved.
During my investigation I have spoken to people who claim I should look past the fraud that is occurring because the Newberg Downtown Coalition does “good work”. This “good” is defined by them as hosting farmer’s market style events in downtown Newberg that they enjoy attending.
To be blunt, I do not care if people think NDC does “good work”. I don’t care if you like the marketplaces they organize. The law is the law. Corruption is corruption. You must stand for something or you will fall for anything. You must not excuse corruption just because you think it benefits you or someone you like in some way.
People have told me they believe it’s okay for so many people to be rotating on and off the board of directors because they believe when someone resigns from a board there is no longer any conflict of interest. Yet in actuality, resigning from a company board does not magically erase from existence your ties as an agent of that company. It is absurd to suggest simply resigning from a board of directors means you can have no more benefit from what it does in the future, especially if you turn around and engage in business dealings with it, such as by requesting or voting to award grant money to it. You cannot just resign from a company’s board and then immediately turn around and, as a public official, vote to give that company money. A 501(c)(3) is a company. Every charity is a company.
What Progressive Yamhill members are doing to enrich themselves unjustly is wrong. Over the years they have infiltrated and manipulated their way into many local business groups and government agencies with the obvious intent to further their own agendas and profits. Their schemes must be exposed and investigated, and their agents held accountable. The means to achieve this is to report them to the Oregon Department of Justice, local District Attorney offices, to the IRS and even the FBI in cases where federal money has been received by a 501(c)(3) not engaged in legitimate charitable activity.
If you would like to provide any additional information about this investigative report or any other issues you would like to see an investigative report made on in regards to what you may believe to be fraud conducted by Progressive Yamhill members, please reach out to me at email@example.com and I will investigate and pass along information to law enforcement agencies. Anonymity of sources will be protected.