Lawmaker seeks more restitution for nonprofits

Posted: Tuesday, February 18, 2003

JUNEAU (AP) -- A lawmaker is seeking to change a law he says prevented the Alaska Folk Festival from collecting full restitution from an accountant who embezzled thousands of dollars from the organization in the 1990s.

Republican Rep. Bruce Weyhrauch went before the House Judiciary Committee on Friday to discuss House Bill 23. He says it would allow nonprofit groups to collect restitution for time and resources spent to uncover criminal activity within an organization.

Weyhrauch told the committee that when the Juneau-based Alaska Folk Festival, which hosts an annual free music festival and other events, discovered money missing in 1999, its members were burdened with reconstructing the crime before law enforcement authorities would prosecute.

Folk festival accountant Jim Demers was charged with stealing at least $13,000 from the organization. He was sentenced to two years in prison with 18 months suspended and ordered to pay restitution up to $24,000.

But a Court of Appeals decision in 2002 cut $5,000 that would have gone to the group for the 200 hours festival board members spent uncovering the thefts. The court found that, ''The festival did not expend any money nor receive an invoice for this volunteer effort.''

Former festival President Riley Woodford told the committee that the Juneau Police Department told the organization it didn't have the time or resources to investigate such a crime.

Festival officials would have to document each individual crime and how the crimes were covered up before police would get involved, Woodford said. He said restitution likely would have been paid in full had the nonprofit group hired an accounting firm to reconstruct the crimes.

Weyhrauch noted white-collar crime is on the rise in Alaska and throughout the nation. As a member of several nonprofit organizations, he said he is particularly sensitive to the issue of restitution for such organizations.

''You go on a song and a prayer a lot of times. You are running on a shoestring, and you can't afford to go out and hire a bunch of professionals to recreate crimes,'' Weyhrauch said.

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