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Is a GOP candidate’s nonprofit helping veterans?
Austin American-Statesman - 2/21/2020
A Republican candidate for the Texas House from Hays County regularly touts her leadership of a nonprofit that helps disabled veterans find work, but she has little to show for it, tax records show.
Austin nonprofit Digital Education and Work Initiative of Texas has roughly $250,000 in revenue but spent less than 1% of it -- $1,200 -- on veterans, according to an American-Statesman review of the nonprofit's 2018 tax filing, the most recent available.
The group's only other expenditure that year was $63,750 for Executive Director Carrie Isaac, one of three Republicans seeking to challenge state Rep. Erin Zwiener, D-Driftwood, in a swing district in Hays and Blanco counties.
The nonprofit's activity raises questions of conflicts of interest and whether Isaac's political ambitions have become intertwined with the nonprofit's operations.
Isaac told the Statesman this week that the tax filing doesn't reflect the full scope of the work the group has done. She called questions about her charity work a "political witch hunt" -- echoing her response to criticism of the nonprofit during a candidate forum in her hometown of Dripping Springs this month -- as the March 3 election date approaches. Early voting is underway and continues through Feb. 28.
Isaac said the $1,200 stipend went to one veteran who tested the nonprofit's proof of concept.
"We connect people with digitally accessible jobs, but we don't pay them. Our partners pay them," Isaac said, adding that the $251,000 in revenue is "seed money to get DEWIT going."
Since Digital Education and Work Initiative of Texas was founded at the beginning of 2017, it has helped two dozen veterans find work, she estimated.
According to the group's mission statement online and its IRS tax form, the nonprofit partners with digital companies and nonprofits, including veterans groups, to develop training and cloud-based work for underemployed people. Isaac's campaign mailers say the nonprofit "helps disabled veterans find good paying jobs."
The nonprofit partners with Austin artificial intelligence company Alegion, she told the Statesman, along with another veterans nonprofit that she would not disclose.
But Alegion CEO Nathaniel Gates, who is a board member of the nonprofit, said Thursday the company has not done any work with the Digital Education and Work Initiative since 2018.
When asked if she could connect the Statesman to a veteran the group has helped, Isaac ended the call.
On the 2018 tax filing, a box was checked "No" on the question of whether any officer, director, trustee or key employee has a family relationship or business relationship with any other officer, director, trustee or key employee.
Yet, two members of the board are connected with Alegion, which the nonprofit has partnered with.
Aside from Gates, board member Robert "Hank" Seale is an investor in Alegion.
Seale is also a campaign donor to Isaac as well as to her husband, Jason Isaac, when he was a state legislator. Seale told the Statesman that, to his recollection, he gave the nonprofit its more than $251,000 in revenue.
The third board member is Jason Isaac, who represented the district for eight years, ending in 2019. The tax filing disclosed that the Isaacs are married.
Daniel Borochoff, president of the national charity watchdog group CharityWatch, said it's considered good operating practice for an interested party to recuse themselves on decisions about whether the nonprofit enters into a partnership with a company.
"There is an appearance of a conflict, but the nonprofit would need to demonstrate why it is in their best interest to work with that board member," Borochoff said.
Carrie Isaac did not respond to a question about whether Gates recused himself from discussions about the nonprofit's partnership with Alegion.
Gates declined to comment on the question.
The Center for Nonprofit Studies at Austin Community College suggests that nonprofit board members should keep personal and business ties separate.
According to the college's "Principles and Practices for Nonprofit Excellence" guide, boards should have a conflict of interest policy that includes a disclosure form along with procedures for managing conflicts of interest and "handling situations in which public and private interests intersect."
Seale's role as a campaign donor to Isaac -- he has given more than $20,000 to her campaign -- puts board members in the position of being influenced by campaign donations, Borochoff said.
"They ought to seek out more board members so they can have more impartial board members so they can work toward the best interest of the organization rather than their own personal interest," he said.
The nonprofit has a conflict of interest policy, according to its 2018 tax filing, but Isaac declined to provide a copy of the policy to the Statesman.
Isaac said she stopped taking a salary from the organization when she launched her candidacy in April.
But the campaign shares a phone number with the nonprofit.
The voicemail greeting on the number is Isaac's voice saying that she would "appreciate your vote" in the primary. It does not include any information about the Digital Education and Work Initiative.
Isaac said she sees no problem with using the same phone number for her campaign and the nonprofit.
"That's my number no matter what I'm doing," she said. "I'm paying for it. It's my personal number."
Borochoff said it's best practice for nonprofits to steer clear of political activity.
"That's not smart because then they risk being involved in political activity, which they're not supposed to do if they want to maintain their status as a 501(c)(3) organization," he said.
In April 2018, Jude Prather, the Hays County veterans service officer, said he received emails from Digital Education and Work Initiative about technology jobs for veterans. He said he connected Isaac with an agency and added the nonprofit to his folder of job leads for veterans.
Prather said he hasn't heard from the nonprofit since then.
In November 2018, Digital Education and Work Initiative partnered with Austin-based nonprofit IAM23, which focuses on helping veterans with mental health problems, and Alegion to connect veterans to Alegion jobs for a pilot program to analyze drone photos. Officials at IAM23 and Alegion said at the time they hoped they could eventually expand the effort statewide if the trial was successful.
<strong id="strong-d6acd678a865d432cedc4bd88d4c45db">READ MORE: Austin AI firm Alegion partners with nonprofit to provide work for veterans
James Irwin, the founder of IAM23, said his nonprofit has stalled for a lack of money.
Isaac said the drone project "is still an idea that hasn't come to fruition."
And Gates, the Alegion CEO, said, "The customer did not decide to move forward with the project and no further work was performed."
"We haven't done any additional work with DEWIT since, although we would be willing to in the future," Gates added in an email.
Isaac said the nonprofit is working on a new partnership, but she wouldn't disclose any details, calling it "sensitive information."
Meanwhile, two veterans told the Statesman they called the nonprofit in 2019, but their calls have gone unanswered.
Urshel Metcalf, CEO of Plano-based veterans service group Momentum Texas, called Digital Education and Work Initiative to inquire about partnering with the group. Metcalf said Momentum Texas often partners with other nonprofits to connect veterans transitioning out of the military with jobs. His calls were never returned.
"The recording was a political person," he said of the voicemail. "It's definitely unusual for no one to follow up. None of us answer the phone all the time, but a good business usually answers the phone a majority of the time."
Seale said he is not involved in the nonprofit's day-to-day operations and could not explain why some veterans might not have heard back from the nonprofit.
"I just know (Carrie and Jason Isaac), and I trust them," he said. "They may have been busy and not have done a lot of stuff. What they're doing is not easy."
Pete Salazar, a commissioner on Austin'sCommission on Veterans Affairs, said he hadn't heard of Digital Education and Work Initiative until contacted by the Statesman. After reviewing the group's tax filing, he said he was surprised to see how little money went to veterans, while the rest of the nonprofit's spending went to Isaac.
"What really took me aback is that $1,200 (veterans stipend), as far as money being distributed to veterans," Salazar, who previously worked for Goodwill Industries of Central Texas as an employment placement specialist. "That really raises some flags for me personally."
But Seale said he has been impressed with Isaac's work at the nonprofit.
"With (the Isaacs') involvement in Texas politics and our desire to help people domestically, we asked them, take what you know about the local area and find a way to help local people," he said.
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