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Attorney General  Taking "Chances" with Public Charitable Trust
 
We recognize and applaud Steve Carter for his accomplishments during his first term as Attorney General, one of which has been accountability for the Conner Prairie public charitable trust, but oversight of accountability for the Mary Powell Crume public charitable trust has been selectively absent.
 
Deputy Attorney General Terry Duga justified his boss's approval of the Humane Society's borrowing against public charitable funds by stating to Judge Dieter:  "We think they stand a good chance" of making future payments on the loan. 
 
Do you know of any bank that would grant an unsecured loan based only on "a good chance" at paying back the funds?  No long term contracts, no continuing client base?  Rather, this borrower relies solely on public donations, and its plan calls for more than doubling those donations in less than 3 years!  The answer:  None.  The Humane Society was denied by several banks to loan it money based on the same lofty projections.  If none of the financial institutions that are in the business of lending money would make an unsecured loan to this borrower, why should a public charitable trust fund do so?
 
H.S.I officials claim that the community animal service organizations trying to protect the Crume Trust is costing H.S.I unnecessary legal expenses, however H.S.I.'s attorneys fees are attributable entirely to preventing other public groups from bringing evidence to Judge Dieter to refute this transaction; its legal fees are its own doing in its efforts to prevent factual and legal presentation.  Even Attorney General Carter did everything he could to prevent other parties from submitting evidence and statements of current law that prove this transaction is wrong.  Why? 
 
Because Mr. Carter's office has been part of the problem.  Steve Carter, whose charge it is to monitor Indiana charities that receive donations from the public as well as to review annual accountings of public charitable trusts, FAILED to take action over the past 4.5 years as this Indiana charity depleted more than $11 million in liquid assets and more than $3.2 million in public donations.  Further, Steve Carter regularly "punts" his duties to look after the public's best interest under the Trust over to the Marion County Probate Court. 
 
More importantly, AG Carter FAILED to uncover that the Trustee (H.S.I.) of this public charitable trust for 24 years in a row omitted from its annual accountings an asset valued at > $300,000.  Inexplicably, Steve Carter further found no wrongdoing when this Trustee reported that same Trust asset as one of its own for many years (commingling of trust assets) and, indeed, later presented it to local banks as collateral for a loan (conversion of trust assets).  These are serious breaches of any trustee's fiduciary duty -- let alone the trustee of a public benevolent trust -- and more than ample grounds for the trustee's removal and replacement. 
 
Yet, Steve Carter not only allows H.S.I. and its friendly lender, National City Bank (an official from which is now the Humane Society Treasurer)  to continue as trustees, he has loaned it the public's trust funds -- after all, he thinks there's a "good chance" that the bankrupt organization will pay back the money!  
 
Yes, perhaps Mr. Carter's own contribution to this Trust's problems explains why his deputies took every action possible to block other public groups from participating in this judicial process,  to prevent the Probate Court from reviewing ANY evidence or law as to the propriety of the transaction or the sufficiency of the collateral offered back to the Crume Trust. 
 
Under Mr. Carter's agreement with H.S.I., rubber stamped by the court, H.S.I. must offer as collateral back to the Crume Trust an interest in H.S.I.'s facilities already owned by the Trust; plus it requires that even if H.S.I. fails to repay its loan, the Crume Trust must lease the facilities back to a now-proven financially defunct H.S.I., for a dollar a year.  Sufficient collateral for more than $1.7 million loan from public funds? 
 
Perhaps another reason why Steve Carter took no meaningful action in this matter was that it makes for better election-year politics.  Whether it be denying a bankrupt public organization a loan from public funds or investigating its recent losses of more than $13 million of public money,  Steve Carter did not want to appear as the politician who "took down" the H.S.I.   Instead, he is now known as the only Attorney General in the United States who is willing to sacrifice, rather than preserve, a public charitable trust fund. 
   
   
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