Profiting from Wildlife Controversy in Utah, Part Two
Reporting and analysis by Cat Urbigkit, www.RangeWriting.com.
This is a two-part series:
Part One explained how the State of Utah has paid more than $12 million to keep the pot stirred on the protection of wolves and sage grouse.
Part Two takes a look at the financial dealings of the primary players.
Utah governmental records indicate that BigGame Forever (BGF) was paid a total $5.1 million by the State of Utah since 2012, and that Stag Consulting has received a total of $7 million from 2014 to 2019. What links them is one person: Ryan Benson of Bountiful, Utah. BGF was paid to push for wolves to be removed from federal protection, while Benson’s Stag Consulting held the contract to keep Greater Sage Grouse from receiving federal protection.
Both the organization and the consulting business became registered entities in Utah within days of each other, and the line between the activities and money of both appears to be blurred, although detailed information about how the more than $12 million in Utah contract funding was spent has never been released.
Don Peay, who brought Benson to Sportsmen for Fish & Wildlife and then to BGF, is the founder of both organizations. Ryan Benson is the principal officer and trustee of both BGF and its nonprofit foundation (BGFF).
BGFF: The Charitable Organization
Big Game Forever Foundation (BGFF) was established as a 501(c)(3) charitable organization in 2012. According to the Internal Revenue Service: “To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.
• Are eligible to receive tax-deductible contributions,
• Must not be organized or operated for the benefit of private interests, and
• No part of the organization's net earnings may inure to the benefit of any private shareholder or individual.
• If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.
The IRS describes inurement/private benefit this way: “A section 501(c)(3) organization must not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. No part of the net earnings of a section 501(c)(3) organization may inure to the benefit of any private shareholder or individual. A private shareholder or individual is a person having a personal and private interest in the activities of the organization.”
BGF: The Social Welfare Organization
Since 501(c)(3) organizations are restricted in how much political and legislative (lobbying) activities they may conduct, that is typically why 501(c)(4) organizations – social welfare organizations – are formed. Big Game Forever (BGF) received this classification from the IRS in 2014, with an effective date of Dec. 30, 2012.
IRS classifies social welfare organizations this way: “To be operated exclusively to promote social welfare, an organization must operate primarily to further the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements).” IRS code “expressly prohibits inurement of the net earnings of an entity … to the benefit of any private shareholder or individual.”
BGF’s website provides few details of the organization's activities, and it is unclear whether the membership money and donations generated through its website go to BGF or its tax-exempt foundation, BGFF. Tax records indicate that most of the money is funneled through BGF rather than the foundation.
The 2017 and 2018 BGF wolf reports to the State of Utah for its wolf contract claim “85,000 BigGame Forever members,” which rose to “over 100,000 BigGame Forever members” in the 2019 report.
A review of BGFF’s (the foundation) tax reporting for 2018 doesn’t support a claim of the 501(c)(3) organization having 100,000 members. Income for that year was $108,238, of which $43,361 came from fundraising events, leaving $64,865 in income from “gifts, grants, contributions and membership fees received.” But $50,000 of that nearly $65,000 came as the result of a $50,000 contribution from a “disqualified person.”
The Internal Revenue Service defines a disqualified person as “any person who was in a position to exercise substantial influence over the affairs of the applicable tax-exempt organization,” and adds, “It is not necessary that the person actually exercise substantial influence, only that the person be in a position to do so.”
When the disqualified $50K is removed from the nearly $65K in contributions, that leaves a balance of about $15,000, enough to cover about 600 memberships at BGF’s bottom-end membership rate of $25. The 2017 tax return wasn’t much different, indicating about $9,500 in contributions, and a loss of nearly $20,000 on its fundraising events.
BGFF’s 2018 tax report included $108,238 in revenue, and spending of only $55,200 – with the vast majority of expenditures ($48,000) going to “legal” fees. BGFF reports it is governed by an unpaid four-member board, of which Benson is a trustee and the principal officer. The foundation reports that it has no staff members.
So maybe the membership money is reflected in BGF’s 501(c)(4) tax filings? The most recent filing available was for 2017. This report indicates that BGF is governed by an unpaid three-member board, with Benson as trustee and principal officer. With a $1.1 million budget, BGF reports to have three employees, but a total salary expenditure of less than $55,000.
The report includes less than $14,000 in contributions and grants, none of which was reported as membership fees. If that amount were divided by $25 membership fees, that would equate to 560 members.
The big money for BGF is in the “program service revenue,” which is revenue received by an organization while charging for the services. BGF reports $1.13 million of this revenue on its 2017 tax return. According to the filing, BGF received $638,233 to “educate Congress about sage grouse,” and $500,000 to “educate Congress about wolf delisting.”
The details are unknown, but BGF reported spending a total of just under $600,000 for its sage grouse and wolf delisting efforts in 2017. For its other functional expenses, BGF reported legal expenses of $221,324, and lobbying expenses of $185,000. BGF reported spending about $50,000 in salaries and about an equal amount in travel expenses, plus another $50,000 on “management.”
The Peay Connection:
Don Peay founded Sportsmen for Fish & Wildlife (SFW) in the 1990s, hired Benson for SFW in 2010, and founded BigGame Forever with Benson in 2010. In addition to the financial ties between Benson’s private company and the BGF enterprise, Peay is also part of the financial web revealed in tax records.
Tax records for SFW show over a 7-year period (2011-2017), SFW issued $1.66 million to “Peay Consulting Inc., c/o SFW” for “consulting.” More than $800,000 was paid to Peay while Benson served on the SFW board, and Peay himself served on the board for three years while he was being paid as a consultant, including two years with Benson.
In addition to paying Peay Consulting, SFW also issued annual grants totaling more than $430,000 to Big Game Forever from 2011 through 2015. Notations on tax records indicate that the majority of funding was for BGF’s “wolf campaign.”
Neither Peay nor Benson appear as board trustees on the 2017 tax record, and that was the last year that Peay Consulting was reported as receiving payments from SFW. By the 2018 tax report, the organization had renamed itself Sportsmen for Fish & Wildlife Inc. and was operating two hunting concessions in Canada, including Arctic Red River Outfitters and Full Curl Stone Outfitters. SFW reports that it has nearly 8,000 members, seven employees in the U.S., and a budget of more than $14 million.
Peay also founded the Western Hunting & Conservation Expo that is held in Utah every year. The event is hosted by SFW and the Mule Deer Foundation under a contract with the State of Utah, and which reportedly attracted 60,000 people and raised more than $8 million for wildlife conservation this year. That the SFW/Mule Deer Foundation proposal was accepted over that of the Rocky Mountain Elk Foundation (RMEF) became the subject of controversy when it was revealed that RMEF had planned give a much higher percentage of the revenue back to Utah for conservation efforts than SFW, but was not selected. SFW/Mule Deer Foundation was awarded the contract for the 2017-2021 expos. For details, check out this Q&A from the Utah Division of Wildlife Resources.
The tangled financial web of involved in these nonprofit organizations and private companies is compounded by the lack of publicly available information from organizations receiving tax-exempt status. A review by Utah’s audit department back in 2013 noted: “BGF reported that about two-thirds of the state funding was paid to the BGF director’s private business and reported as his consulting fees. Expense breakdowns of this consulting business were not supplied.”
Nothing has changed. Expense breakdowns are still not reported – either for the millions spent pursuant to contracts with the State of Utah, or the general financial position of the organizations involved – whether it’s BGF or SFW.
There are plenty of hunting organizations that are up-front with their financial dealings and make their audited financial statements readily available: For example, the 50,000-member Safari Club International. SCI’s website if full of information about its activities, and its bylaws, policies, tax returns, and audited financial statements are available for anyone interested to read. Not only that, but SCI’s fiscal documents provide background on the organization, the nature of its operations, support to its nonprofit foundation, significant accounting policies, and details its related party transactions. These are all areas where BGF fails in public disclosure.
Although BGF reported to the IRS that its “governing documents, conflict of interest policy and financial statements are available to the general public upon request,” BGF has still not responded to RangeWriting’s request for those very documents.
If BGF has nothing to hide, then why not disclose the information? With only a skeletal staff, BGF has spent millions of dollars. Who exactly is receiving the benefits?