Public Watchdog.org

Overdue Confession Leaves A Bad “Taste” (Updated 08.22.11)

08.17.11

To nobody’s surprise (least of all ours), none of the folks who operate Taste of Park Ridge NFP (“Taste Inc.”), the private corporation with the no-bid monopoly on the Taste of Park Ridge event (“TOPR”) since June 2005, showed up at Monday night’s City Council meeting to answer Council questions about their seven-year stewardship of the City’s premier event.

As Mayor Dave Schmidt quipped about the no-show excuses given by Taste Inc. vice-president Albert Galus, it seems like Galus and all of his fellow Tastees – Dave Iglow (Pines Men’s Wear), Dean Patras (Broadway Livery Service), Sandy Svizzero (Parkway Bank), Barb Tyksinski (All on the Road Catering), John Warnimont (Activision Electric), Jackie Matthews (Rainbow Hospice) and Mel Thillens (Thillens Service Corp) – are unavailable to attend a Council meeting “for eternity.”

The Tastees, however, did send the City a well-crafted (albeit undated) “Press Release” that sounds like they’ve already “lawyered up,” as terms like “aldermanic purview” and references to “federally protected rights” and Illinois statutes like “35 ILCS 120/11” don’t normally trip lightly off the tongues of non-lawyers like Mr. Galus or his fellow Tastees.

But the most notable information in that entire Press Release is Taste Inc.’s admission – or maybe it should be called a confession – of what we’ve suspected for a few years: that for the first four years of its existence, Taste Inc. really wasn’t a not-for-profit organization, as the Tastees always claimed when bragging about their thousands of hours of uncompensated volunteer service for TOPR.  Instead, we now find out that Taste Inc. was just a standard for-profit business, the profits from which the Tastees could lawfully treat however they wanted, including by stuffing their pockets with them if they so chose. 

And those profits were enhanced each year at the taxpayers’ expense by approximately $20,000 of free City services “donated” to the for-profit Taste Inc. during 2005, 2006, 2007 and 2008; and then donated to the belatedly not-for-profit Taste Inc. for the past 3 years.   

We actually enjoyed, in a twisted sort of way, the Tastees’ “spin” (or was it just an outright lie) about how they didn’t realize they weren’t really a not-for-profit until they discovered “a paperwork error” that made Taste Inc. “an S corporation instead of the 501(c)(6) as desired.”  Yeah, right. 

Even if we bought into that fairy tale, the Tastees should have discovered that “paperwork error” when it came time to file Taste Inc.’s 2005 tax return, since they would have needed their 501(c)(3) or (c)(6) certification from the IRS to file the IRS Form 990 (which not-for-profits file and which are published on GuideStar) instead of the IRS Form 1120S filed by regular “S” corporations that are private and not published on GuideStar.   And they should have had three more of the same “I could have had a V-8” moments with the filing of each of the 2006, 2007 and 2008 tax returns.

And even if we assume the most extreme version of Taste Inc.’s fairy tale, in which the Tastees somehow didn’t discover that “paperwork error” until they closed down the original Taste Inc. and re-incorporated as a 501(c)(6) in March 2009, why did they continue the charade and not admit until August 2011 that Taste Inc. hadn’t been a lawful not-for-profit for its first four years in business? 

Which raises the question of what other TOPR-related things the Tastees have not been truthful about – including what Taste Inc. has done with all the TOPR revenue over the past 7 years, whether any of the Tastees have been taking dough, and/or whether they have been giving sweetheart deals to friends and favored vendors, all while taking the $20,000+ a year in City services.   

That’s what Ald. Dan Knight appears to have been trying to find out when he recently asked Taste Inc. for “cash flow statements” – and what Taste Inc. is trying to prevent the City from finding out when, “exercising its federally protected rights,” it unequivocally refused to produce them.

This being Illinois, schemes and outright scams by people in and around government at any level should no longer surprise us.  That’s why we shouldn’t be surprised by what is looking more and more like a scheme hatched back in 2005 by then-mayor Howard Frimark and the Tastees to hand over TOPR not to an ad hoc committee of the City (as Frimark initially proposed) but to the private Taste Inc. – a scheme that was eagerly rubber-stamped by a semi-clueless City Council that, back then, was too busy dodging all those pro-Frimark purple ribbons to pay any real attention to the no-bid, no accountability giveaway of the City’s premier event.

That’s the way government waste and corruption works in Illinois.  To paraphrase our late U.S. Sen. Everett McKinley Dirksen: $20,000 here, $100,000 there, and pretty soon you’re talking real money.

But the end of Taste Inc.’s TOPR gravy train may be in sight.  The future of TOPR is on the agenda at this coming Monday night’s (08/22/11) Finance & Budget COW, at which F&B may explore alternatives to the TOPR monopoly by the secretive and arrogant Taste Inc. crowd.

Stay tuned.

UPDATE (08.22.11)

On Friday, August 19, Taste Inc.’s Albert Galus ratcheted-up his arrogance another few notches by demanding that Mayor Dave Schmidt apologize for Schmidt’s comments about Galus’ and his fellow Tastees’ refusal to appear at last Monday night’s City Council meeting or otherwise provide the Council with various information and documentation about Taste Inc.’s operation of TOPR for the past 7 years.

We think that’s hilarious, in a sick and twisted way:  Having already been caught misleading – if not outright lying to – the citizens of Park Ridge about Taste Inc.’s being a not-for-profit corporation during its first four years of operation, Galus apparently is adopting “the best defense is a good offense” strategy by trying to put Schmidt on the defensive.  We hope Schmidt doesn’t let that happen, because allowing a totally shameless Galus to hijack the debate on Taste Inc.’s continuing monopoly of TOPR and/or to blunt the long-overdue inquiry into whether Taste Inc. actually defrauded the people of Park Ridge would be its own breach of the public trust. 

We feel no need to comment on most of Galus’ self-serving drivel, but a few of his “respect” lines are irresistible:   

  • “As an elected official, you owe me, the taxpaying citizen, respect.” 

No, Fatuous Albert, Schmidt doesn’t.  As Edmund Burke noted, an elected official (like Schmidt) owes his constituents his “industry” and his “judgment.”  Schmidt has been plenty industrious in his first two years in office, which is why he has been able to pare the City’s annual deficit down from multi-millions to what we are hearing will be a couple hundred thousand dollar for the just-completed fiscal year, despite having several of his cost-cutting vetoes over-ridden by the Council; and his judgment, especially as it applies to Taste Inc. and TOPR, appears to be spot-on.

  • “Additionally, I demand respect from you on behalf of all other volunteers in Park Ridge who strive to build a community that edifies one another.”

You have no right and no authority to demand anything for the true “volunteers” in Park Ridge – the ones who do what they do without sucking money out of the taxpayers’ pockets, without shameless self-aggrandizement and promotion, and who are transparent and accountable to the public for their activities.  In that regard, you appear to have so little in common with those true “volunteers” that your claiming the “volunteer” sobriquet for yourself is itself borderline fraud.

  • “When you disrespect me in public fashion as you have done, you disrespect every citizen in Park Ridge.”

No, Albert, you and your fellow Tastees are the ones who have been “disrespect[ing] every citizen in Park Ridge” for the past seven years – and you continue to do it by thinking that those citizens are so stupid and/or gullible that they might actually buy into this latest public relations scheme of yours.  

Obviously, Albert, you missed the memo that most of us got as young kids – the one that says “respect isn’t owed, it’s earned.”

If you and your fellow Tastees want respect, Albert, start earning it by opening the Taste Inc. books and records to prove to this community that Taste Inc. hasn’t been just a self-serving, special-interest, pocket-lining scam since you folks took it over in 2005.  Until you and your fellow Tastees come clean, you’ve already received way more respect – and taxpayer funds – than you deserve.

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17 comments so far

Busted.

The City of Park Ridge better make sure that the Taste, Inc. paid the appropriate taxes (sales tax, state tax, etc.). If they are no longer not for profit, an RFI needs to be initiated by either the City to the State of Illinois or to the IRS for the Taste, Inc. tax returns. If no tax returns have been submitted, the City needs to ‘lawyer’ up and report this to the State and Federal government. Back taxes and penalties will be calculated for the Taste, Inc., which they will have to pay. An ‘S’ Corporation would distribute all of its earnings to the shareholders, and k-1’s would be reporting on who received what dollar amount.

Why is the City responsible, folks are probably asking? Because the City was going to run this event itself (i.e. manage, coordinate, etc.), and not outsource it to private company. Once the City made that decision to outsource, and the private company did not report actual results to the City, the City needs to investigate all potential violations (food permits, sales of alcohol, taxes, etc.).

When Taste, Inc. is reporting that they didn’t know what type of Corporation they were, and now they are using legal opinions and language for justification; the City better get its act together and investigate.

EDITOR’S NOTE: To correct a misperception you might have, Taste Inc. started out as a for-profit S corporation and has since become the not-for-profit (501(c)(6)) that they claim to have originally intended to be.

But you raise an interesting point about the S corp Taste Inc. distributing profits to its “shareholders” – which not-for-profit corporations don’t even have – and accounting for those profits via K-1s. So unless the original Taste Inc. S corp burned off all of its revenues through expenses or other deductible transfers to eliminate any profit, Tastees like Iglow, Galus, etc. would likely have been those “shareholders” who would have been credited for shares of those profits that they would have had to report as income on their individual tax returns.

Oh, what a tangled web they’ve weaved….

907…What in tarnation are you talking about??

The city should just mooooooove on.

EDITOR’S NOTE: We’re pretty sure that’s exactly what Howard Frimark and the Tastees want at this point, since it’s looking more and more that not only did they lie to the public about being a not-for-profit, but that they may have lied about not getting any money for all their “voluntarism.”

Where the City of Park Ridge jursidiction ends and the Taste, Incs. begins, is very muddled.

There must be a contract between the City of Park Ridge and Taste, Inc.?!?

There are always liability issues involving these events, especially when alcohol is served.

If a kid got hurt at this event, who would have been held responsible, Taste, Inc. or the City of Park Ridge?

A portion of the event was in Hodge’s Park. Does the Park District have liability if a kid playing on one of the rides gets hurt or is it the ride operator, or is it Taste, Inc.?

Why is the City of Park Ridge not suing Taste, Inc. if it was suppose to receive monies annually for the event?

Finally, what are the positions of the Aldermen regarding this issue?

EDITOR’S NOTE: To our knowledge there has never been a contract between the City and Taste Inc. because nobody from the City ever asked for one. Blame the Frimark Administration and that 2005-2007 Council for dropping the ball right from the get go, and the next Council 2007-2011 for letting it continue. But it looks like Mayor Schmidt and this new Council are doing what their predecessors neglected.

If a kid got hurt at this event, it’s likely both Taste Inc. and the City would be sued. How the kid got hurt would likely determine which of the two (or both) would be held responsible. The same type of analysis would likely apply to the Park District and Taste Inc. if the kid got hurt in Hodges Park.

The City isn’t suing Taste Inc. because the City never had any enforceable agreement with Taste Inc. to share profits after the first year. Once again, is the City of Park Ridge not suing Taste, Inc. if it was suppose to receive monies annually for the event?

Show up at City Hall Monday night and find out what the current aldermen think.

What concerns me is that it looks like the “Tastees” lied about what they were doing from the very beginning and kept on lying. And now if this K-1 stuff is correct, they were lying about taking money for themselves. Sad.

Anyone read today’s Joural?

Mr. Galus is demanding an apologee from the mayor.

EDITOR’S NOTE: We always knew Albert could oink, but now we know he can also squeal.

I do think the Mayor does owe an explaination about a pretty simple question…..what took you ya so freakin’ long?!?!?!?! If you really believe this is an issue as you claim (and are not simply playing politics) why has it taken you 2 plus years to take out the hammer??? You had every opportunity as an alderman and 2 years as a Mayor to make this an issue and you did not. Why now?? It reminds me of the way you handled (or did not handle) the issue with the power company.

EDITOR’S NOTE: More misinformation, anon. Mayor Schmidt raised the issue a year ago and it got no traction with the Frimark Tool Council. But if you’re concerned about things taking “so freakin’ long,” you should focus your attention on the 7 years it took for the Tastees to finally come clean about their “S” corporation. Start beefing about the Tastees’ not producing the 2005-2008 tax returns and the cash flow statements that could show whether they paid themselves dough while telling the community they were altruistic “volunteers” that weren’t making a dime on TOPR.

Albert doth protest too much.
Makes one think, hmmmmmmm.

I’d be interested to hear Anon@723 explain what the “political” angle is. I don’t see it. What I see is the mayor finally able to get this straightened out now that the dead weight of the Frimark Council is finally off his back…and ours.

If there was no written contract, is the Taste and the City considered partners?

EDITOR’S NOTE: No.

‘Dog, you missed a key point in that last response. The Taste folks were passing themselves off as a volunteer committee and/or partners of the City, and then when pressed to disclose financials, they now claim to be a private corp that doesn’t have to open it books. Transparent. Not.

EDITOR’S NOTE: Transparent…definitely NOT. But the Tastees’ lies do not reality make.

Can Taste, Inc. be charged with fraud or negligence if there is no written contract?

Who is allowed to subpeona the records of Taste, Inc.?

EDITOR’S NOTE: Neither “fraud” nor “negligence” depend on a written contract. We do not believe that the City has subpoena power, so that would leave it up to the Cook County State’s Attorney, the Illinois Attorney General’s Office, or the U.S. Attorney to subpoena the Taste Inc. records.

I wanted to believe that there was some honest mistake about how the Taste was being run, but this apology demand is outrageous when all the mayor has done for a couple of years now is ask for full disclosure. I now am assuming the worst from everyone associated with the Taste organization.

EDITOR’S NOTE: Actually, when we first started looking into this is back in July 2008, we expected that we would get a response from the people running Taste Inc. offering to provide all the relevant information. After all, if it’s all a volunteer-run, non-profit enterprise…what’s there to hide, right? But we got nothing but the occasional push-back from the Tastees and their mostly anonymous apologists – until the recent admission by Taste Inc. that it wasn’t an NFP for the first four years of its existence. Followed by more stonewalling.

I know some of the individuals that are part of this Tastee venture. I don’t think they are trying to cheat the City or the residents. I believe what started out with good intentions was mishandled by both parties.

Now that the terms fraud and negligence are being thrown around, everyone runs to their lawyer because of fear of lawsuits.

I would like to think they could settle and resolve this issue out of the court system. Otherwise the legal fees associated with this issue would cost both the residents and the business owners.

EDITOR’S NOTE: There will be no lawsuits over this because it’s more just plain bad government (and sleazy opportunist business people exploiting bad government) than it is outright criminal behavior. But if it makes you feel better to blow smoke up your own kilt about how wonderful the Tastees are, knock yourself out.

The bottom line is that if this were all on the level, the Tastees would have opened up their books and records for review years ago. Instead, they lied to their “customers” for years about being a not-for-profit enterprise, and now that they finally had no choice but to admit that they weren’t an NFP they are still trying to keep information about who put how much in whose pocket top secret. And then they send a toady like Frimark to the meeting to plead their case for them while Galus, Iglow, Patras, Svizzero, Tyksinski, Warnimont, Matthews and Thillens hide out.

TOPR is being revealed as just bread and circuses, run by a bunch of people for whom truth is whatever they need it to be.

Howard was awesomely hilarious last night (unintentionally of course). Great theater.

EDITOR’S NOTE: Opinions vary, but he’s too much of a buffoon for our taste. But since Taste Inc.’s control of TOPR was basically his creation, he obviously has at least a personal (if not pecuniary) interest in preserving this particular status quo.

Never mind all of that: Galus’s comment here unnerves me: “…volunteers in Park Ridge who strive to build a community that edifies one another.”
Wha? This is not even English. Doesn’t Galus run a tutoring company of some kind here in town?
Now, THAT’s scary.

EDITOR’S NOTE: Maybe that’s why he’s running Taste Inc.

I think Galus must have tutored HOward. He is so eloquent.



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