CBS 2 Exclusive: CBS 2 Chicago Investigation Results in New Legislation for Charitable Donations

CBS 2 Exclusive: CBS 2 Chicago Investigation Results in New Legislation for Charitable Donations

CHICAGO, May 9 /PRNewswire/ -- A year-long undercover investigation by CBS 2 Chicago Investigative Reporter Dave Savini and Producer Michele Youngerman has led Governor Rod Blagojevich to sign a bill into law today that will target middlemen who steal donations meant for charity. In a unanimous decision, the Illinois Legislature and Governor Rod Blagojevich passed a law (HB 4315) that will go into effect January 1, 2007.

The CBS 2 investigation, "Good Gifts Gone Bad," a seven-part series, detailed how 4,238 vehicles and several boats donated to charities were diverted, sold and turned into cash and the charities never got a dime. The multi-million dollar scam involved nearly 200 charities nationwide including Easter Seals of Metro Chicago, Alzheimer's Association of Illinois and the Cancer Research Institute. The CBS 2 investigation prompted police raids, a grand jury investigation and the call for this legislation.

"Your program raised an issue I think most people probably weren't aware of generally because I think most people are fundamentally good," Blagojevich said. "I think what these con artists did was tap into the fundamental goodness of people."

Under the new law (HB 4315) anyone convicted of a felony is forbidden from handling donated vehicles. Anyone convicted of a misdemeanor relating to "fiscal wrongdoing" cannot register as a middleman within five years of a conviction. The law also requires strict reporting and tracking of each vehicle's identification number and a listing of who profits from its proceeds.

This month the CBS 2 Investigators also exposed a nationwide phony charity donation box operation. CBS 2 and the Naperville Sun caught the operation taking clothes meant for a Chicago based charity and shipping them to a for- profit clothing resale business on the U.S./Mexican border. Clothing resale industry sources estimate the clothing operation may have netted as much as $300,000 in sales.

The new law is expected to cover the registration and tracking of all donation middlemen, including those who collect and receive donations through charity boxes.

"This law will increase the Office of the Attorney General's ability to combat fraudulent fundraising schemes by requiring those who are engaged in the for-profit business of collecting and processing donations intended for charity to register and report their activities to my office," Attorney General Lisa Madigan said. "It also will help ensure that donors' contributions are accounted for. This will enable my office to take action against those for-profit middlemen who misuse or fail to account for the donations they collect."

This series of investigative reports have been honored by the Illinois Associated Press, The Chicago Headline Club Peter Lisagor Award, and most recently the Chicago Bar Association's Herman Kogan Award.

The reports "Good Gifts Gone Bad," can be seen in their entirety on the 2 Investigators page of CBS2Chicago.com.

Source: CBS 2 Chicago

CONTACT: Shawnelle Richie, +1-312-202-3251, or Melissa Martinez,
+1-312-202-3880, both of CBS 2 Chicago

Web site: http://www.cbs2chicago.com/

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