Another New Wrinkle Regarding Cecil Newton's Church, and Why Even Minor Revelations in the Cameron Newton Investigation are Bad News for the Auburn Tigers
by T Kyle King on Nov 19, 2010 10:01 AM EST
in Football
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PrintBy now, we’ve all seen the message board analysis of the background to the Cameron Newton case, which stops only just short of parroting the conspiracy theory espoused by the Scottish father from "So I Married an Axe Murderer." Personally, I see no need to go to such great lengths to malign the Auburn Tigers, when the plainly obvious facts suffice so nicely.
Much has been made of the allegation that Holy Zion Center of Deliverance, Inc., the church of which Cecil Newton serves as pastor and chief executive officer, purportedly was having financial difficulties at the time Cam Newton was being recruited by Auburn, Mississippi State, and other suitors. I do not know whether this is true, and I make neither an assertion nor an assumption either way.
What complicates matters even more than they already have been, though, is the fact that Holy Zion Center of Deliverance, Inc., does not appear to be a valid Georgia non-profit entity at the present time.
The church originally was incorporated in 1991, with Cecil Newton as the named incorporator, but the corporation appears to have been administratively dissolved on May 16, 2008, well before the events surrounding Cam Newton’s recruitment are alleged to have occurred.
I don’t want to oversell the importance of the church’s evident dissolution as a corporate entity; under Georgia law, an administratively dissolved non-profit corporation may apply for reinstatement, and, if the application is granted, the law treats the corporation as though it had been in uninterrupted existence the entire time. In fact, it appears that Holy Zion Center of Deliverance, Inc., was dissolved before, in 1993, and reinstated in 2003 as a result of an application for reinstatement filed by Cecil Newton.
In short, this latest twist in a saga that grows more convoluted with each passing day probably means absolutely nothing, but I find it interesting---baffling, really---that, at a time when the church was under fire from city officials and under investigation by local newspapers, no one seems to have bothered to check to see if the church still existed as a legal entity, and, if not, why not. Cecil Newton has submitted bank statements from the church, suggesting that it remains in operation, but at least one report indicates that neighbors say "the church hasn’t been used in months." The administrative dissolution of Holy Zion Center of Deliverance, Inc., very well may have been due to a simple failure to renew the corporation’s annual registration, but the articles of amendment filed with the Georgia Secretary of State in 2005 indicate that, upon the dissolution of the corporation, the church’s assets were to be distributed for tax-exempt purposes, so it matters whether Holy Zion Center of Deliverance, Inc., has closed its doors or merely needs to file the paperwork to be reinstated.
It is quite standard for a non-profit entity applying for tax-exempt status from the IRS to provide for the distribution of its assets to other tax-exempt entities upon dissolving, so there is nothing the least bit odd about that language. Now that the FBI is involved, though, considerations concerning compliance with the Internal Revenue Code become relevant.
According to the Coweta County real estate records available on-line, Holy Zion Center of Deliverance, Inc., purchased its building in July 2003. (Presumably, that purchase is what prompted the reinstatement of the corporation earlier that year.) If the corporation ceased to exist in 2008, that property should have gone for tax-exempt use to another church or charitable organization. The timelines appearing in media reports seem to indicate that, during much of the time that Holy Zion Center for Deliverance, Inc., purportedly was trying to make repairs to its building, Holy Zion Center for Deliverance, Inc., did not, strictly speaking, exist.
More often than not, corporations are administratively dissolved due to clerical oversights when someone simply forgets to file the proper paperwork with the Secretary of State. There is no reason to believe anything more sinister occurred here, particularly since Holy Zion Center of Deliverance, Inc., apparently went through a similar dissolution with no ill effects upon reinstatement. As Paul Westerdawg noted, though, the only two people you would less rather see in your front yard than an FBI agent are an IRS agent and Jim Cantore. If, as appears to be the case, Cecil Newton’s church was dissolved (even innocently and accidentally) as a non-profit entity, questions could arise concerning the assets of the defunct corporation. The process of providing satisfactory answers to those inquiries will produce further grist for the mill.
Like everyone else who is following this story from the outside, I have no idea who is telling the truth and what, if anything, is being concealed. The Newtons are entitled to the presumption of innocence, both legally and morally, and I do not suppose that the ostensible dissolution of the church resulted from anything more than carelessness.
Nevertheless, there reportedly is an ongoing federal investigation into these matters, which appear to involve a now-nonexistent non-profit corporation continuing to operate as a tax-exempt entity. Even if (as likely is the case) all of this is entirely innocuous, some intrepid IRS agent may ask about the possibility of benefits to private interests with respect to this legally-defunct church.
The more areas into which government agents believe they have cause to poke and prod, the more information they are going to unearth that the NCAA otherwise might not have gotten, and the less of a priority the continued collegiate eligibility of Cameron Newton (who likely is three games away from ending his amateur career, in any case) will be to the quarterback and his father. The more questions are asked by agents in the employ of the federal government, the more the NCAA will begin to look like small potatoes. Even if those federal agents ultimately conclude that everything is on the up and up, their presence on the scene is not good news for Auburn.
Every new wrinkle renders more complex a situation the Tiger faithful have been hoping will end with a simple explanation. The longer this goes on, and the deeper this goes, the worse it will be for the Plainsmen, and it doesn’t look like there will be a cessation of revelations anytime soon.
Go ‘Dawgs!
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Auburn had better hope that guy at Tiger Droppings is smoking some major crack...
… (which, for all we know, he may be doing).
If the slightest hint of what they suggest is true (namely, that the FBI stumbled into recording phone conversations of a pay-for-play scheme while investigating Auburn boosters for political bribery and extortion), the the following two images pop into my mind:
I mean, we go from simply refusing to bench a player they should have known was ineligible (resulting in relatively minor probation and vacating wins) to actively breaking the NCAA’s #1 rule and trying to hide it.
Is THAT how the FBI got involved....
I was not exactly racking my brain on the subject, but I did think it quite odd that the FBI would be involved in a College Football pay for play scandal…
I can bake like a demon.
That, at least, is the (very) lightly-supported-by-evidence theory proffered by a guy at TigerDroppings.com.
If you have about 45 minutes to kill, you should go read his entire set of posts yourself. It’s interesting, horrifying, and only about 30% believable all at the same time.
Still, though, if what he has said even has a glint of truth in it… the ramifications for Auburn would be dire.
by vineyarddawg on Nov 19, 2010 12:54 PM EST up reply actions
Looks like Auburn may be in a very deep hole
and they are still digging.
NCAA stuff aside...
A non-existent non-profit (a.k.a “the church”) and other businesses associated with Newton the Elder? Allegations of pay-for-play?
It’s laundry day.
"If we score, we may win. If they never score, we'll never lose."
-Erk Russell
by DavetheDawg on Nov 19, 2010 12:55 PM EST via mobile reply actions
I am so sick of this crap
This is completely unreasonable. You guys are sooooooooooooooooooooo jealous! It is perfectly rational and reasonable to believe that Cam’s daddy asked MSU for wads of cash and then Cam up and decided to come to Auburn because Coach Chiz gave him the warm fuzzies.
Be honest puppies….
/Vocal Portion of the AU Fanbase
"I want anything wearing red and black to tear the head off anything that isn't." - Lewis Grizzard
those insane AU fans get quieter and quieter, and I am not a vengeful, revengeful coming, but this time, you know what, they had it coming.
"One thing I will never do as long as I’m at Georgia is lose to Florida." - Herschel Walker
That looks just like my cat six years and 13 or 14 lbs. ago! (She likes to eat incessantly – hence she is a blimp. She doesn’t go for the diet crap the vet gave me to give her either.)
If people want to see Auburn “play mean” in reality v. merely in their imaginations, I predict Auburn being penalized for this sleazebucket “preacher” and his dealings with slimewagons in Mississippi will bring that about full force. Especially after being screwed unjustly in 2004 I think it was, Auburn will report other teams and demand investigations 24/7/365. And not let it go – ever.
I won’t, as I don’t really give a rat’s _ what happens, but Auburn will. Bet on it.
Of course, this could all be solved if we adopted my proposal of eliminating athletic scholarships and making athletes meet the same already patheticly low academic standards as all other undergrad students. (What is undergrad school, really, other than playschool? Grad school is what actually takes a bit of intellect, aptitude and discipline.) Having players who can barely read and who are have borderline MR is just wrong on too more fronts than I have time to outline right now.
The only difference is that we would really have college football.
Good news!!
We do “really have college football” where the athletes “have to meet the same academic standards as all other undergrad students” – see the Pioneer Football League. You could even be a Marist Red Fox fan!
I can bake like a demon.
Hi Podunkdawg!
I couldn’t sleep. My cat had other plans for me involving preparing more snacks. She’s taking her post snack pre nap bath now though so I may give it another shot in a few minutes!
I’ve never heard of the Pioneer Football League. (Of course, I doubt I could list all the members of the SEC and that’s the only one to which I pay any attention.) Still, college football – as fun as the games are to watch on Saturdays when one has nothing worthwhile to do – is something of a joke. And it isn’t fair to potential non-borderline mentally retarded youths. And it does engender cornball drama among the rivals. All these “rumors” about Auburn! This site isn’t so bad, but I visited a bammer site called “tide sports” for the first time today, and all I can say is “Jesus Christ!” WTF? Those people are beyond pathetic. They are more worried about Auburn’s potentially being in trouble (or not being) for the dealings of a stupid non-Auburn student or alum with stupid non-Auburn students and alums than is Auburn. It’s kind of Southern Gothic High Drama Pathetic. I like the South, but holy ____. This has gotten lame. And who’s to say Auburn can’t and won’t cause problems galore henceforth? I would hope not, but I wouldn’t doubt it at all.
And how is Vegas? Or are you home? Hope you had a fun trip or have a fun rest of the trip!
Stephen1980, I've reminded you about this before.
Now I’m warning you: stop using the term “retarded.” (I’m not crazy about your decision to use our Savior’s name as an epithet, either.)
Go 'Dawgs!
Understood.
I thought I was doing as instructed. If you’ll notice my poorly phrased sentence (“are have borderline ____”): I started to write something different and thought better of it. But didn’t correct my already written portion to have proper structure. I was remembering my reminder.
Also, I wasn’t using it as an epithet this time, but rather as a DSM-IV-TR condition, which some players actually do have (and really isn’t fair to use them in college football when they aren’t going to possibly graduate and probably won’t make it professionally in sports, or fair to legitimate students who may have had a chance but were denied it. I know: I’m strange for thinking these things.
Nevertheless, I’ll not use it (or our Savior’s name) as an epithet or use it as a diagnosis henceforth. Better safe than sorry.
Incidentally,
the language in the Articles of Organization requiring the distribution of church assets for tax-exempt purposes upon dissolution of the corporation don’t actually require the church building to be transferred to another tax-exempt organization. The building could be sold and the proceeds could be donated to a tax-exempt organization and that would qualify as a distribution of assets for tax-exempt purposes.
If you were talking about whether an individual should donate cash or property to a tax-exempt organization, there would be a difference, at times a large difference. If I donate $200 of cash, I get a deduction of $200 – exact cost out of my pocket. However, if I were to donate say stock or artwork – different rules apply. Let’s say I purchased artwork for $25 50 years ago and now wish to donate this artwork to my church. The value of my deduction is the fair market value of the property on date of donation. If the art (or stock, or land, or building etc) is now worth $200 – I get a tax deduction for $200 for donating property that actually cost me $25.
And that boys & girls is your US Federal Income Tax lesson for today.
I can bake like a demon.
Accountants and Attoneries, here to confuse the rest of us into thinking they know what they are talking about.
(i say that with much respect, I simply have no idea what you just wrote)
"One thing I will never do as long as I’m at Georgia is lose to Florida." - Herschel Walker
short version
they can sell the church and donate the proceeds to the Salvation Army if they like – they don’t have to give the building itself away.
If you want to make a donation to a tax exempt group (church, salvation army or whatever) – and you have to choose between cash & property – if the property is worth more than you paid for it – donate the property & let the church sell it – it’s better for your taxes.
Better?
I can bake like a demon.
Next week
I’ll confuse you all with the tax benefits & implications of Like-Kind Exchanges if you like :)
I can bake like a demon.
Just to be clear: since we’re not talking about an individual, but an entity which is itself tax-exempt, would it make any difference for the church as to whether they donated the building or the proceeds? It seems that here, there’s no issue with valuing the gift, changes in basis, or any appreciation (or, since it was purchased in 2003 and it is now the climate of 2010, possibly depreciation), but the church would be able to avoid taking on the cost of a sale by donating the building itself, if it came to that. Inquiring minds want to know.
"It'll only be reviewed because the guys up in the booth want to watch it a few times too." http://www.youtube.com/watch?v=xf16_mw0nxs
Nope
no difference to the church itself. It merely must distribute it’s assets, in whatever form. The real key here is the IRS doesn’t want the assets of a tax-exempt entity to be “inherited” by a non tax-exempt entity – especially an individual.
I can bake like a demon.
Yeah, that's the question.
If the corporation didn’t exist, what became of the assets, and why was the church (ostensibly) raising money as a tax-exempt entity that didn’t exist?
There very well could be—-perhaps even likely are—-easy explanations to all this, but the point is that it is not in Auburn’s interests even to have the IRS asking these questions. The more Cecil Newton is concerned about the federales, the less concerned he is going to be with preserving his son’s collegiate eligibility. Given the choice between making things square with the FBI, the IRS, and the NCAA, he is going to be least concerned with the NCAA, which is not good news for Auburn. The Plainsmen could be collateral damage in the Newtons’ eyes, and the likelihood that Cam Newton will be the Tigers’ Maurice Clarett appears to be on the rise.
Go 'Dawgs!
by T Kyle King on Nov 20, 2010 11:33 AM EST up reply actions
ok wait
at the point of dissolution, the winding up of affairs should include distribution of assets – which may or may not entail selling of the building – if it does, the process takes much longer, but still should end with all assets of whatever form distributed to a tax exempt entity.
If the church was raising money as a tax-exempt entity post-dissolution, that is another matter entirely.
I can bake like a demon.
Presumably, they did.
The corporation was dissolved in the spring of 2008, and all of this back-and-forth with the city council over repairs (including the repairs themselves, for which the money came from someplace) was in 2009 and 2010.
That’s where I think things could get interesting for Auburn. If the church didn’t raise money, and the repairs were paid for by the alleged $200,000 payment reportedly demanded from the recruiting suitors seeking Cam Newton’s services, I would think the more tempting response to any inquiries from federal agencies would be: “Yes, the church was administratively dissolved as a non-profit entity, but we didn’t raise any money, because the repairs were paid for by the pastor using the money he got from an Auburn booster.” In other words, it’s getting easier to see how the best way for the Newtons to bail themselves out is to cast Auburn to the wolves.
If so, it couldn’t happen to a nicer bunch of rivals! :)
The longer this goes on, the less likely I think it is that the University of Georgia will ever have to publish a media guide listing the 2010 series meeting as a loss.
Go 'Dawgs!
But if dissolution was an oversight
they can very easily get themselves out of this mess, no?
I can bake like a demon.
With the Georgia Secretary of State? Yes.
With the Internal Revenue Service? You tell me.
Go 'Dawgs!
well
if they aren’t dissolved, then the whole problem with the IRS goes away……
Now of course, if the FBI investigation gets the IRS involved, there will more than likely be an Audit of some variety, during which they will probably discover improprieties and that will be a whole new issue.
Just remember, the only thing the US Government ever convicted Al Capone of was…..tax evasion.
I can bake like a demon.
I am the treasurer of a non-profit
(not a church), and not only am I required to register with the Secretary of State by paying the annual fee for our corporation, but I am required to file another registration with that same office (this is now required every two years, and not every year), and that registration is as a CHARITABLE ORGANIZATION, along with the supporting documentation. The chances of Newton letting both of these registrations slide for the last several years is nil.
Thanks, SilverBs; that's good information to know.
Most of my incorporations work involves for-profit entities, and I work with the client’s accountant on the paperwork for charitable status on the handful of non-profits with which I work. I appreciate the insight.
Go 'Dawgs!
What does this have to do with UGA sports?
I can’t tell you how many times I have seen people accuse Auburn fans of being paranoid and quick to see all sorts of conspiracies against us. That’s when I read write ups like this that remind me how backwards the world can be.
Should I sound like Track um Tigers and say "sour grapes".
Kyle has written about Boise State in the past. Yesterday he wrote about Mercer. I guess he should do that, since it isnt Georgia Sports. I think there were some posts about USC and the Heisman Trophy, but hell, since that isnt about UGA, that shouldn’t count either.
Dude, get over it. This is a college sports blog, with a primary focus on UGA. Cam Newton and the NCAA investigations of Auburn are one of the hottest, and potentially biggest, stories in College Football. I read and blog here specifically to hear about other goings on so I don’t have to go to 40 sites, and if something gets my interest, I go else to read about it. Furthermore, T Kyle King hyperlinks darn near everything so you can go to the other sites.
If you think the world is backwards because a sports blog wrote about sports, I would recommend some therapy on catastrophic thinking.
"One thing I will never do as long as I’m at Georgia is lose to Florida." - Herschel Walker
Wow...
take some Xanax. This post has nothing to do with sports whatsoever. It is about a church’s status as a nonprofit entity. If that equals sports in your mind, then you have some issues.
Let me quote:
What does this have to do with UGA sports?
So I answered. Now it’s:
This post has nothing to do with sports whatsoever.
Why don’t you decide what you want to argue before starting the spin.
"One thing I will never do as long as I’m at Georgia is lose to Florida." - Herschel Walker
When Georgia's oldest, and one of Georgia's biggest, rivals is under investigation by . . .
. . . the NCAA under circumstances that may lead to the Plainsmen being forced to vacate wins, including one against the Bulldogs, I consider that relevant to University of Georgia athletics.
Beyond that, though, the responsibility of producing daily content sometimes requires addressing matters concerned with the larger world of sports in general, albeit usually from a Bulldog-related angle. Strictly speaking, “Don’t Bet On It!” seldom relates directly to Georgia football, but I don’t get the impression that regular readers consider, e.g., my forecasts for the national games of interest to be a waste of their time.
I believe it’s fair to say that, compared to most other weblogs covering the SEC or SEC teams, MaconDawg and I haven’t been hammering the Cameron Newton saga, even though it’s been producing daily headlines. In the week leading up to the Deep South’s Oldest Rivalry, I specifically avoided writing extensively upon the subject, expressly stating my preference for concentrating on the game.
It happened that, when I was reading the now-infamous extensive multi-part message board post upon the subject (which I considered extreme, as noted above), I thought to check the Georgia Secretary of State’s website to check on the corporation’s status. It’s a standard thing I do as an attorney whenever I am dealing with a corporation, and I looked just to satisfy my own curiosity. When I discovered a potentially relevant datum that I had not seen reported elsewhere, I began to think about whether it was worth reporting.
As I often do when making such calls, I contacted one of SB Nation’s college sports managers and discussed whether and how to address the subject. After receiving the manager’s blessing, I published what I believe is a measured and evenhanded posting. I certainly don’t think there’s any way to read the foregoing and conclude that it was designed to “get” Auburn, as I offered disclaimers at every turn indicating that this could be, and likely is, an innocent error and placing this new wrinkle in the context of the larger investigation. It’s certainly not an attack piece, and any Auburn fan who read it that way is, in fact, being paranoid.
If it didn’t interest you, kngry7, I’m sorry; if there are stories directly related to University of Georgia athletics that readers believe MaconDawg and I are missing, we’re always open to feedback. I believe it’s fair to say, given our track record, that we run one of the more receptive weblogs where accepting and applying constructive criticisms are concerned.
Is this hard-hitting earth-shattering news? No, it isn’t, and I went to great lengths not to exaggerate its significance. This is not, strictly speaking, a news-breaking site. I believe Dawg Sports has broken previously unreported news stories four times in almost five years of operation: the death of Erk Russell, the signing of a letter of intent by Lonnie Outlaw, the confirmation of A.J. Green’s absence from the Miami agent party, and the levying of a four-game suspension against A.J. Green. For the record, we were right all four times. Whether one chooses to count this as the fifth such instance is a personal judgment call, which I leave to individual readers to make.
I regret it if that strikes anyone as “backwards.” If it does, though, I cannot for the life of me understand why.
Go 'Dawgs!
Now why would Auburn fans have reason to be paranoid?
The seven major infractions Auburn University is guilty of ranks 2nd behind SMU and Arizona State.
Auburn has been on either Athletic or Academic probation for part of every decade since the 1950’s:
1. 1956-1961
2. 1979-1980
3. 1991-1995
4. Academic probation in 2003
Don’t believe me? Try Googling “Auburn probation history”. A convienient timeline pops up for your cut and paste enjoyment:
Mostly associated with the James Brooks scandal.
Auburn has a sordid past. The NCAA has a long memory. To suggest a conspiracy is simply ignoring history and, unfortunately, this unfortunate legacy.
"If we score, we may win. If they never score, we'll never lose."
-Erk Russell
Well,
we could remark about their great level of consistency, or their respect for tradition or we could just say that is another Bulldog War Eagle Auburn Tiger Point of Pride!
I can bake like a demon.
That La's song
Back before I got a Tivo I used to flip around the channels a lot, and So I Married an Axe Murderer was inexplicably one of the movies I’d stop and watch to it’s end. It’s my big guilty pleasure.
For this reason the La’s original version of “There She Goes” is burned into my brain.
I haven't seen it in several years, but I thoroughly enjoyed it in its day.
College Buddy and I used to quote it regularly (often using the father’s mockery of the son’s humongous head in reference to the University of Georgia’s then-president, Charles B. Knapp, who did, in fact, have an enormous noggin).
On one occasion, we were citing lines from the film to a fellow law student in the rotunda of Hirsch Hall, and, when the coeval to whom we were speaking asked what movie we were quoting, College Buddy and I said in unison: “‘So I Married an Axe Murderer’!” The Joseph Henry Lumpkin School of Law’s then-dean, Ned Spurgeon, was walking by as we offered this exclamation, and College Buddy added, “It’s a great movie!” as the dean passed.
“Thank goodness that’s a movie,” he said as he moved off down the hall.
Go 'Dawgs!
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