Worthington councilman ordered to repay nonprofit funds
A Franklin County judge has ordered a Worthington city councilman to repay $20,000 he had been accused of misusing for personal benefit through his nonprofit charitable organization he had founded 10 years ago.
The order formalizes a previously settled civil lawsuit against Doug Smith by the Ohio Attorney General’s office, allowing Smith to repay the funds.
Smith insists he has done nothing wrong and agreed to settle only because he couldn’t afford future legal costs.
“This agreement shows I did nothing wrong and the settlement amount is my contribution to help Ohio charitable organizations understand the complex paperwork involved in operating a nonprofit,” Smith told the Dispatch.
“I am disappointed (The AG’s office) spent tens of thousands of taxpayer dollars to file this frivolous lawsuit and I look forward to discussing my experience in greater detail with my constituents.
“I would have loved to have proven myself at trial but it would have cost two to three times more than the settlement amount to get through that process,” he added.
The order, signed by Franklin County Common Pleas Court Judge Kimberly Cocroft, states that Smith is “permanently and perpetually enjoined from having direct access to, or control of, charitable funds, or holding any fiduciary position with any charitable organization” in Ohio.
Smith, 38, has been a council member since January 2012, about the same time he set up Making Healthy Relationships, whose goal was to provide abstinence education in schools in Franklin County.
An investigation by the attorney general’s charitable law section indicated that Smith misused more than $135,000 for himself and his wife, according to the lawsuit. The spending included more than $15,000 in payments on his wife’s credit card, more than $18,000 in cash withdrawals, and more than $14,000 in restaurant and grocery store purchases.
The spending also including more than $50,000 in “unexplained or otherwise questionable expenses” at retailers such as Dick’s Sporting Goods, House of Cigar, The Brewhouse, Andrews Jewelers, Petco, European Style Tailoring and Sapphire Nightclub, according to the lawsuit.
Smith contends that all of that personal spending was from his personal accounts and had nothing to do with the charity.
Most of the charity’s funding came from state grants administered by the Ridge Project, which Smith said he had a private contract with. At their request, he said, he set up the nonprofit.
“In retrospect, I never needed to set up a nonprofit,” he said.
“Smith historically operated MHR with little to no oversight from any other purported board member,” the lawsuit said. “This lack of oversight allowed Smith to expend charitable funds for personal purposes undetected and unrestricted.”
Attorney Tom Gjostein has called Smith “upstanding.”
“There’s a misunderstanding,” Gjostein had said of the accusations.
The Attorney General’s office issued this statement in response to Smith’s comments:
“If Mr. Smith truly did nothing, we will gladly agree to join him in a motion seeking to reopen this matter and allow him to have his day in court. We don’t make a practice of taking money from people who insist they did nothing wrong. This settlement ensures Smith doesn’t get the opportunity to prey on the charitable community any longer.”
Asked about his status on council and Worthington’s Community Improvement Corporation, Worthington spokeswoman Anne Brown said “There is nothing in the City Charter or the Code of Regulations that would preclude Mr. Smith from serving in those capacities. He does not have direct access to or control of charitable funds in his role.”
@DeanNarciso
Read More: Worthington councilman ordered to repay nonprofit funds