The intricacies of federal vs non-federal oversight of nonprofits administered by the IRS and Secretaries of State are often so complicated, especially when millions of dollars in revenues are involved, that it requires a seasoned CPA to ensure legal compliance.
Private foundations, for example, typically receive their income from their own endowment or a few large donors. Because foundations are usually formed to provide a sincere public benefit in making donations to other public charities, foundations enjoy special tax benefits, deductions, and excise tax benefits. They must adhere to strict laws as a result, and any seasoned CPA understands this – especially one who handles the books from the foundation’s inception.
The John & Grace Nauman Foundation
In February 2022, Carson City District Court Judge James Todd Russell authored an article in the The Nevada Appeal, outlining the birth of The John & Grace Nauman Foundation, where he serves as President. Judge Russell titled his article “What A Small Foundation Can Do”, which is interesting, considering the John & Grace Nauman Foundation reports millions in revenues on an annual basis for the last six years, according to the foundation’s 990 forms submitted to the IRS.
At the time of this article, the Nauman Foundation reported almost $3 million in stock investments in various pharmaceutical , semiconductor, biotech, energy, telecom, and real estate holdings. As the rest of the country suffered financially during the pandemic, Russell’s foundation reported significant capital gains.
A fourth generation Nevadan, James Todd Russell resides in Carson City with his wife Jeanne. In 2007, Russell was appointed by Governor Kenny Guinn to the First Judicial District Court for Carson City and Storey County, Judge James Todd Russell’s father is former Nevada Governor Charles H. Russell, who served two terms from 1951-1959. His grandfather is Judge Clark J. Guild. Russell also served as the Deputy Attorney General for the State of Nevada in 1975. Prior to Russell’s appointment by Guinn, Russell was an Attorney in private practice, working for Allison, MacKenzie, Russell, Pavlakis, Wright, & Fagan from 1976 to 2006. Today, the firm is known as Allison Mackenzie.
Allison Mackenzie is a lobbyist ESG Law Firm, deeply entrenched in Nevada politics. “Allison MacKenzie, with its registered lobbyists, represents numerous clients before the state legislature and interim committees. The firm’s members are actively involved in professional and other organizations in their community. Attorneys within the firm hold or have held positions on the state judicial selection committees, the state board of bar examiners, the state continuing legal education committee, the state practice and procedure committee, disciplinary committee, local bar administrative and fee dispute committee, and executive counsel of the young lawyers’ section of the state bar. Members of the firm serve or have served on the Carson City Redevelopment Authority, Historical Architectural Review Committee, the Carson City Airport Advisory Committee, as well as held leadership roles in Saferide, Rotary, Masonic Lodge, Special Olympics, Soroptimists, Carson Water Management Board, Carson City Children’s Museum, Volunteer Attorneys for Rural Nevada and a variety of other charitable and community-involved programs”.
Allison Mackenzie’s current staff are directly tied to Russell’s John & Grace Nauman Foundation through their involvement with the Carson City Children’s Museum and also the Boys & Girls Club of Western Nevada through Attorney Ryan Russell. According to IRS Form 990’s filed by Judge Russell’s CPA Firm, Judge Russell’s Foundation annually donates thousands to both organizations.
In analyzing the foundation’s charitable contribution output, it seems that the John & Grace Nauman foundation donates only a small fraction of their revenues, with several years at only 4.2% of their intake and the highest at 6.3%.
Unfortunately, Form 990’s for 2018 are missing from the IRS database. Form 990’s outside of the years outlined below going back to 2010 are not accessible. The available Form 990’s, many over 100 pages each, outline millions of dollars in investments, assets, and stock transactions.
YEAR FILED & TAX PERIOD BEG. YR VALUE OF ASSETS/ DONATION OUTPUT
2016: July 1, 2015 to June 30, 2016 $2,364,609/ $111,000 amounting to 4.6%
2017: July 1, 2016 to June 30, 2017 $2,320,558/ $105,000 amounting to 4.5%
2018: July 1, 2017 to June 30, 2018 *MISSING FROM THE IRS DATABASE*
2019: July 1, 2018 to June 30, 2019 $2,471,910/ $118,500 amounting to 4.7%
2020: July 1, 2019 to June 30, 2020 $2,250,685/ $114,157 amounting to 5%
2021: July 1, 2020 to June 30, 2021 $1,968,279/ $125,000 amounting to 6.3%
NOTE: MARKET VALUE OF ALL ASSETS FOR THE 2021 FILING TOTALS $2,817,004
THE FOUNDATION REPORTED A CAPITAL GAIN OF $270,249 DURING COVID.
It’s important to note every Form 990 Russell and his CPA Firm filed with the IRS includes the following legal disclosure: “All income earned is used for contributions to Organizations that are themselves tax exempt under 501(c)3.”
Here is a recap of the outgoing donations reported by Russell & his CPA, sourced from publicly filed Form 990’s reported and recorded by the IRS:
The Boys and Girls Club of Western Nevada
Total received from the John & Grace Nauman Foundation, 2015 through 2021:$41,450.00
- The address of 673 S Stewart Street, Carson City, provided on every Form 990 cannot be located on the Carson City Assessor Website. The data has been scrubbed and appears to be hidden from public view.
- An in-person visit to 673 South Stewart Street in Carson City shows a building which has been shuttered, with boards over almost every window except the point of entry. A large red sign stating “State Property – Do Not Enter” is displayed at the front door. To the right, sharing the same parking lot, is the Carson City Fire Station. The red arrows highlight the building address identified on Judge Russell’s Form 990 as the location of “The Boys and Girls Club” listed on his Form 990. There is no signage indicating this is a habitable building and there is no signage indicating this is a location for “The Boys & Girls Club of Western Nevada”.
- The Website for The Boys & Girls Club of Western Nevada lists several locations on their website, however, the address in receipt of over $41,000 from Russell’s Nauman Foundation does NOT match any of those locations.
- The Boys & Girls Club of Western Nevada Board of Directors listed on the website Includes Jeffrey Berns’ Blockchains LLC, which is located at the Reno Tahoe Industrial Complex in Storey County, where Russell was/is presiding. It also includes JP Morgan Chase, Southwest Gas, Briggs Electric, Lumos & Associates, & LP Insurance, the Carson County Sheriff, Nevada Association of Counties, Nevada Mining Association, Advo Wealth Advisors, Allison Mackenzie Law Firm, Carson Tahoe Health, Argentum Partners, Barrett Financial, Ramac Industries, and GE Bently Nevada.
- Russell and his CPA make a legal claim on every Form 990 Filed over a period of years that a nonprofit called The Boys & Girls Club of Western Nevada operates at 673 South Stewart Street and is a 501c3 NonProfit. No conclusive records exist with the IRS or the Nevada Secretary of State which reflect any business is registered at this address. This address appears to be owned by Carson City and the State of Nevada.
- In addition, no records indicating The Boys & Girls Club of Western Nevada, the entity outlined on the website, could be located reflecting 501c3 nonprofit status.
Total received from the John & Grace Nauman Foundation, 2015 through 2021: $24,000.00
The Treasurer and main contact listed on Form 990 is John McKenna.
McKenna is also a trustee and treasurer for the John & Grace Nauman Foundation.
McKenna also lists his professional affiliation with the Carson City Board of Supervisors, Ward 3.
McKenna, a CPA, lists his professional employment connection as “Freeman Williams”. Freeman & Williams Investment Company, LLC is located in Reno.
- The donation received from the John & Grace Nauman Foundation is not recorded on the Form 990.
- Brewery Arts Center indicates they received US Federal Grant dollars from the US Treasury.
- This address also houses the Nevada Artists Association, which is a collective of artists who rent personal booths to sell their artwork: https://nevadaartists.org
- Even though it appears that “Nevada Artists” rents out booths to each artist to sell their wares, Brewery Arts Center shared the following on their Form 990 filed and recorded with the IRS. Unfortunately, it is unclear who actually operates the center and bears the bulk of the expenses, with both entities claiming the same operations:
- Despite 100 volunteers, Brewery Arts Center Total Program service expenses year ending June 2020 totaled $424,507.
- The Brewery Arts Center appears to hold a FCC Radio license at this address under the name of Jeff Cotton, which is an interesting need for a “cultural arts consortium offering art classes to children and adults”.
Capital City Arts Initiative, also known as CCAI
Total received from the John & Grace Nauman Foundation, 2015 through 2021: $23,000.00
The actual location of this IRS- approved 501c3 is inside the Carson City Courthouse at 885 East Musser Street, where Judge Russell works. It would be interesting to see bank statements tracking every penny of issued to CCAI from Russell’s Foundation.
The First Presbyterian Church
Total received from the John & Grace Nauman Foundation, 2015 through 2021: $17,598.00
The First Presbyterian Church in Carson City appears to own three separate lots:
The Church itself, the Annex across the street at 306 West Musser Street, and part of the parking lot located diagonally from the church itself, across from the Annex. Carson City Assessor records reflect no Deeds exist (called Geneology) and no taxes are paid. In addition, no business license could be located in Secretary of State records, and no responsive records could be found in the IRS database reflecting the First Presbyterian Church operates as a charitable nonprofit entity.
University of Nevada Reno
Total received from the John & Grace Nauman Foundation, 2015 through 2021: $396,500.00
Judge Russell and his CPA filed federal records indicating donations year after year were submitted to an incomplete and incorrect mailing address of “Mail Stop 076” for almost $400,000. A call to the UNR Accounting Office confirms the mail stop records filed on Russell’s Form 990 does not exist, and clarified all donations are recorded under Mail Stop 162.
It would seem prudent to explore if UNR received donations from the John & Grace Nauman Foundation, and explore why a seasoned CPA would record such an egregious address error. Did UNR receive these funds?
Judge James Todd Russell’s article outlining the formation of the John & Grace Nauman Foundation paints an elaborate picture surrounding “Todd Russell”. While Todd is Judge Russell’s middle name, it appears a “Todd Russell”, who is a pivotal figure in the inception of this Foundation, is not involved.
In fact, Judge James Todd Russell lists his home address as the foundation’s headquarters and even states for the record that’s where “Todd Russell” is located. Unfortunately, it’s not just the address of The Boys & Girls Club of Western Nevada which does not exist in Assessor Records – Judge Russell’s home address is also missing, which is problematic. Censorship of public information is an issue. We can see his neighbors’ records are clearly accessible, however Judge Russell’s information has been removed from the system.
Data from other public records show a deed at Judge Russell’s address under the ownership of “Todd and Jeanne B. Russell Trust”. Who exactly is “Todd Russell”, the person who owns Judge Russell’s home with his wife Jeanne in a Trust?
Judge James Todd Russell operates a foundation which invests millions of dollars in ESG Companies, and during the Covid crisis, this same foundation enjoyed considerable capital gains. Because this foundation is classified as a private foundation, they enjoy special tax benefits, but seemingly disregard strict State and Federal rules which allow them that privilege. Foundations are typically formed to serve a public benefit. Russell’s foundation retained the services of a professional CPA to not only manage millions of dollars in investments and stock trades, but also ensure compliance to State and Federal Laws as they gift donations to public charities.
Over a significant number of years, they have made donations to entities which are not 501c3 nonprofit entities, yet they claim this repeatedly on federal records. To learn one of those buildings is blatantly boarded up – one has to wonder where the money outlaid is going, and what else they are doing with revenues behind the scenes.
Judge Russell is in a powerful role where he is expected to maintain and uphold ethical and professional responsibilities, to serve the public at large lawfully and impartially, and rule on evidence and facts without bias. How can we trust a man who is the president of a foundation who seemingly exercises unethical business practices?
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