Who was behind the East Palestine charity scam?
Who was behind the East Palestine charity scam?
An exclusive interview with East Palestine's State Senator, Michael Rulli (R-Salem).
On February 3rd, when a Northfolk Southern train carrying vinyl chloride derailed in East Palestine, most people saw a cataclysmic human disaster. Others saw a financial windfall.
And while I’ve known this is part of human nature for a long time, I never expected one of my old drinking buddies from the legendary Main Bar (RIP) to be accused of operating a fake charity that raised more than $141,000 without sending a nickel to East Palestine relief until it got called on its bluff.
But that’s precisely what happened when Ohio Attorney Dave Yost announced a lawsuit against Mike Peppel.
The thing that made Main Bar great was that it was the last egalitarian downtown bar.
People from all walks of life were welcomed. A State Representative could be sitting next to a guy who just spent his last handful of loose change on a $2.75 bottle of Bud Light.
Inside Main Bar, they were equals.
Peppel was a well-respected legislative aide for State Senator Michael Rulli (R-Salem).
Despite our obvious political differences, Peppel was one of the few people I’ve ever met that could discuss state politics on a deranged level while ingesting numerous shots of cancer-causing mind poison.
I’d be lying if I said I didn’t enjoy his company. Game recognizes game, as the saying goes.
Ironically, Peppel left his years-long service to Rulli on the day of the East Palestine derailment, reportedly to take a job with McKinley Strategies, a government lobbying group owned and operated by TimkenSteel CEO Ward Timken, Jr.
Before Peppel started that job, however, an untold number of people received the following text about the disaster in Eastern Ohio:
"East Palestine residents are in dire need of bottled water. The Ohio Clean Water Fund is on the ground helping. Send a case of water..."
The Ohio Clean Water Fund website advertised a partnership with the Second Harvest Food Bank of Mahoning Valley. That was no small thing; according to its website, Second Harvest Food Bank distributes nearly $17 million worth of food every year.
Peppel’s problems started when Second Harvest executive director Michael Iberis heard about the advertised partnership he knew to be fictitious.
Iberis promptly blew the whistle.
From Morgan Trau of news5cleveland.com in April:
“This particular website was tugging at their hearts and saying, ‘look, we got this problem down here and we have created this entity to be able to help those people on the ground with water and other things — and we are partnering with Second Harvest Food Bank of the Mahoning Valley.'”
But that partnership wasn’t real.
People from around the country asked Iberis and his team if they were affiliated with the ‘Ohio Clean Water Fund.’ After enough calls, he published on their website that they were not with the fund.
“This is where it started to unravel,” the charity director said.
Peppel, upon seeing the posts from Second Harvest denying their relationship, reached out to Iberis.
When asked what should happen to Peppel, whom Yost and media reports identify as “the founder” of Ohio Clean Water Fund, Iberis pulled no punches.
"They should be put in jail, as far as I'm concerned," Iberis said about people who commit this type of fraudulent behavior. "That's where they belong."
Iberis and his team plan to attend all hearings.
"Obviously, he's a total scoundrel; there's no question about it," the director added.
Those are harsh words! And most Americans would probably agree that anyone who willingly defrauded East Palestine charity donors, including all the law-and-order Republican politicians for whom Peppel has worked for his career.
According to Yost, “Ohio law does require any person or organization raising funds for a charity to obtain advance written authorization from the charity." Again, not good for the folks behind Ohio Clean Water Fund.
A conversation with East Palestine’s State Senator, Michael Rulli (R-Salem)
The thing about wandering the Statehouse and looking for ambush subjects is sometimes you never know when an opportunity will present itself.
That happened last Wednesday after an Ohio State Senate session when Rulli walked out of the Senate chamber into a public area. As I’ve said since the case broke, I think Rulli at least owed the public a comment on his longtime aide being charged with a heinous crime like defrauding East Palestine charity donors.
Given the topic's sensitivity, I expected some bullshit non-answer before walking (with haste) to a restricted area where I couldn’t follow.
Give Rulli this much: He didn’t run like a bug! He stood his ground and, more surprisingly, went to great lengths to defend his former charge.
Like State Rep. Mike Loychik (R-Bazetta) before him, Rulli labeled Peppel as a “spokesman” for the group in contrast to group documents and Yost calling Peppel the founder.
According to Rulli, Yost doesn’t have much of a case considering that none of the money got routed into Peppel’s account.
Rulli had more harsh words for the Second Harvest Food Bank than he did for anyone who might have worked with Peppel in the scheme.
In the 11-minute interview, we also touch on abortion rights, and the Lordtown Motors debacle before one of Senator Matt Huffman’s henchmen whisks Rulli away.
That said, there's still a lot of Rulli’s narrative that doesn’t hold water with me upon a further review of the facts.
On the Second Harvest’s alleged $900,000 payroll…
When presented with Second Harvest Food Bank’s executive director calling for “scoundrel” Peppel to be jailed, Rulli claimed people had “jumped the gun” in their accusations against Peppel.
During that defense, Rulli mentioned that the food bank director takes a $98,000 salary and the food bank has a “$900,000” payroll while two other unnamed area food banks don’t have any payroll.
As mentioned before, Second Harvest Food Bank distributes $17 million of food a year. That probably makes it a more extensive operation than the other two food banks Rulli didn’t or couldn’t name.
As for the executive director’s salary, if it’s a real number, that seems like a good deal who oversees a multimillion-dollar operation. By comparison, Rulli makes $68,674 a year as a State Senator working roughly 50 days a year.
According to its 2017/2018 financial report, the most recent I could find, Second Harvest Food Bank claimed 26 employees. Deducting the executive director’s salary would mean every other employee has an average salary of $30,846.
Suddenly, a “$900,000 payroll” sounds like nothing out of order for a non-profit food bank.
There is no proof Ohio Clean Water Fund was a 501(c)(4)…
Rulli pulled what I’ve learned is a favorite tactic for Statehouse politicians during hostile interviews—try to bury me in details to act like I don’t know what I’m talking about.
Three times during the interview, Rulli claimed I didn’t know what a 501(c)4 was. Each time, I told him it was a non-profit. Not that that stopped him from calling me lazy and telling me I needed to do my homework.
He was right, though, but not in the way he thought because Peppel has yet to offer any proof that Ohio Clean Water Fund was filed as a 501(c)(4).
From Madison Tromler of wfmj.com on April 5th:
Paperwork that Peppel filed with the Ohio Secretary of State's office states the fund plans to operate 501(c)(3), a type of nonprofit where donations would be tax-deductible.
Peppel told 21 News otherwise, and that he's operating as a non-profit called 501(c)(4) because he said it's quicker to organize.
The IRS said a 501(c)(4) generally does not allow people to write off donations on their taxes.
To clear the confusion, 21 News asked Peppel to provide any IRS paperwork establishing what type of non-profit he's been running. An IRS spokesperson said an organization should be able to provide that documentation upon request.
After two days, Peppel has not provided that paperwork.
On its own, it could be brushed off. But when you add it to all the other stuff involved…
The money raised by Ohio Clean Water Fund wasn’t put into escrow…
Rulli also falsely claimed that money raised by the Ohio Clean Water Fund had been placed into an escrow until the case was decided.
That money has already been forfeited as part of the settlement of the civil lawsuit.
From Mary Ann Greier of vindy.com on June 8th:
LISBON — The Ohio Clean Water Fund, dubbed a sham charity by Ohio Attorney General Dave Yost related to its fundraising for East Palestine, must dissolve and pay $131,904 in restitution and civil penalties.
Those were the terms of the lawsuit settlement outlined by Yost in a news release issued Wednesday.
“I stand by my word to fight for the community of East Palestine,” he said. “We sued to make sure the contributions improperly solicited from well-intentioned donors get into the hands of people who will use them for their intended purposes. Our fight isn’t over, but this is a win.”
Kind of goes against Rulli’s defense that Peppel did nothing wrong since no money got routed into his account. That would have been a foolish thing to do after being charged in the scheme. And say what you want about Peppel, but he’s no fool.
My conversation with “Mike My People” …
Rulli was right about one thing. I did indeed have Peppel’s number, something I would have bet $1 million against until Rulli had me pull up my phone.
When I entered Mike, there he was on my contact list, right next to “Mike Da Cop Killa,” as “Mike My People,” the kind of contact name that I used to enter for entertaining people I met at the bar during my venerable drinking career.
As I predicted, Peppel’s counsel advised against talking to the deranged communist blogger.
Peppel, according to other media reports, has retained Taft Law’s David Thomas:
He has tried cases before juries in state and federal courts in matters ranging from aggravated murder to corporate fraud and federal conspiracy. Dave has also argued in state and federal appeals courts and the Supreme Court of Ohio. He has served as lead counsel defending white collar cases ranging from ethics and public corruption to health care fraud, cryptocurrency, dark web marketplaces, money laundering, and environmental crime. Dave is the Taft Columbus Litigation Chair and was a member of Taft's Executive Committee from 2019 to 2021.
That’s the kind of lawyer you hire if you’re worried about being the subject of a criminal probe. But that’s just speculation on my part.
If it’s as Senator Rulli and State Rep. Loychik said, and Peppel was merely a “name on the paper” or “the spokesman” who got wrapped up in this scheme, then I hope he flips on whoever pulled the levers behind the scenes. No point in doing prison time for the actual criminals as a “spokesman.”
But so far, only Ohio Clean Water Fund board member Mike Lee has been named in the suit alongside Peppel. Lee is no longer allowed to operate a charity in Ohio and has retained separate counsel.
If Yost is right about Peppel’s involvement, however, then it’s wise on his part that he hired a high-priced and well-connected white-collar criminal defense attorney like Thomas.
Because he’s going to need him if he wants to stay out of prison.
THOSE WMDs. Shattered nerves, sleepless nights: Pickleball noise is driving people nuts… Five things to know before riding Amtrak’s 12-hour Adirondack train from NYC to Montreal… The best vibrators… How alcohol really affects your body, from the first flush of happiness to hangover hell.
The fact that this Republican hobgoblin reacts to the clear fact his buddy is caught red handed with his hand in the cookie jar, stealing from the very citizens he's supposed to be representing, with a "yeah but the guy that caught him makes $98k running a $17M nonprofit, so what's the deal with that?! You clearly don't understand how nonprofits work!" is just (*chef's kiss) a fucking PERFECT example of the amateur mafioso wannabe State reps we've been saddled with. I guess we need to keep sending them to prison until they get the hint.