Childhood Leukemia Foundation sues US FTC to stop deception probe
3:21 pm Friday, June 02nd, 2023
WASHINGTON (Reuters) – The Childhood Leukemia Foundation (CLF) filed a lawsuit against the U.S. Federal Trade Commission (FTC) on Friday, asking a court to stop an investigation into whether it spent more than 90% of donations it receives on fundraising and payroll.
In its complaint filed in federal court in New Jersey, the foundation asked the court to rule the FTC probe of its operations “unlawful.” It argued that the FTC, a consumer protection agency, had no jurisdiction because the group was a non-profit.
An FTC order from 2022, and posted on its website, said the agency was seeking to determine if the foundation was being deceptive.
“The investigation centers on whether CLF’s program spending is so de minimis that it is deceptive to tell consumers that their money will be spent on the purported charities,” then-Commissioner Christine Wilson wrote in an order denying a CLF petition to scrap a document demand by the agency. Wilson stepped down earlier this year.
The order said CLF’s Form 990s, which are filed to the IRS if a group is tax exempt, showed that the foundation received contributions and grants totaling about $11.5 million between 2019 and 2021 and spent some $9.1 million on fundraising and another $1.3 million for employee compensation,
The FTC declined to comment. The Childhood Leukemia Foundation did not immediately respond to a request for comment.
(Reporting by Diane Bartz; Editing by Bill Berkrot)
