As the economy continues to stagnate, state governors are looking for and finding “gold in them thar hills” of the non-profit sector. A couple months ago, I noted that Gov. Jerry Brown of California and Gov. Peter Shumlin of Vermont each came out strongly against outrageous compensation packages given to executives of their respective tax-supported state universities. They acted using their state authority without giving any attention at all to the IRS, which can’t seem to figure out how much is too much to pay a charity executive.
Since then, with a little help from the New York Times and no help at all from the IRS, New York Gov. Andrew Cuomo used his executive power to go after large salaries and benefits given to state-supported charities. He was inspired to act by a Times article documenting the huge sums paid out to what a whistleblower called the “Medicaid moguls”—charity executives of non-profits that get as much as 95 percent of their revenues from the state to serve Medicaid patients. Cuomo immediately put together a task force that already has sent out letters to hundreds of state non-profits demanding details on executive pay.