ANCA Endowment Fund Responds To Crew Allegations

ANCA ENDOWMENT FUND RESPONDS TO CREW ALLEGATIONS

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Monday, April 13, 2009

WASHINGTON–The ANCA Endowment Fund Monday released the following
statement to its donors and the general public regarding ill-informed,
unsubstantiated, and incorrect allegations made in a press release
earlier this year by a privately funded non-governmental organization,
Citizens for Responsibility and Ethics in Washington (CREW).

Below is the statement:

The ANCA Endowment Fund, Inc. would like to address allegations
recently raised against it by Citizens for Responsibility and Ethics in
Washington (CREW) a purported citizens’ watchdog organization based in
Washington, D.C. Specifically, CREW has accused the ANCA Endowment Fund
of having "indirectly participated in countless candidate endorsements"
that were made by the ANCA Endowment Fund’s affiliated 501(c) (4)
organization, the Armenian National Committee of America (ANCA) The
only basis for CREW’s accusation is that the ANCA Endowment Fund and
the ANCA occupy the same address and share certain common directors,
and that the ANCA Endowment Fund made grant contributions to the ANCA
totaling $200,000 in 2005 and 2006.

The ANCA Endowment Fund is quite disappointed that CREW has accused
the ANCA Endowment Fund of engaging in prohibited political activity
based on incomplete and misleading information. It is more than curious
that its baseless attacks were made just prior to renewed efforts by
the ANCA to advance Congressional and Presidential acknowledgement
of the Armenian Genocide.

As a fundamental, threshold matter, the ANCA Endowment Fund does
not and has not ever endorsed candidates or engaged in political
campaign activity, whether directly or indirectly. The fact that the
ANCA Endowment Fund and the ANCA occupy the same address and share
certain common directors is neither proscribed under IRS rules nor
sufficient under the law to attribute to the ANCA Endowment Fund the
political activities of the ANCA or to threaten the ANCA Endowment
Fund’s tax-exempt status.

On the contrary, it has been a longstanding position of the IRS and
of the U.S. Supreme Court that a 501(c)(3) organization’s tax-exempt
status is not jeopardized simply by being affiliated with a 501(c)(4)
organization engaged in political activity that would be improper for
the 501(c)(3) to engage in itself. This is true even if the 501(c)(3)
occupies the same office space and shares the same directors as
the 501(c)(4). What is important is not where the organizations are
located or how many of their directors are common, but whether they
have observed their separate corporate formalities and dealt with each
other at arm’s length. There should be no legitimate dispute that the
ANCA Endowment Fund and the ANCA have done so here, as demonstrated
by the following relevant facts:

* the ANCA Endowment Fund is (and always has been) separately organized
and incorporated from the ANCA;

* the ANCA Endowment Fund maintains its own records and bank accounts
separate and apart from those of the ANCA; funds of each organization
have always been segregated from each other and properly accounted for;
* the ANCA Endowment Fund owns the building located at 1711 N Street,
N.W., Washington, D.C. 20036 at which its offices are maintained;

* the ANCA Endowment Fund rents office space within that 1711 N Street
building to various other organizations, of which only one is the ANCA,
and does so at market rates for all of its tenants; and

* the ANCA Endowment Fund and the ANCA pay for their own share
of common costs, which are allocated to each in proportionately
appropriate amounts.

In short, the ANCA Endowment Fund and the ANCA have consistently
observed their own corporate formalities and dealt with each other
at arms’ length. We believe this fact pattern leaves no basis for
the ANCA Endowment Fund’s tax-exempt status to be threatened merely
because it has some overlapping directors and the same address as the
ANCA. Had CREW had the courtesy to inquire about the actual facts,
it would have readily been able to ascertain that its allegations
were baseless. Perhaps it did not want to be burdened by the facts.

As for CREW’s other complaint that the ANCA Endowment Fund made
grants to the ANCA totaling $200,000 in 2005 and 2006, we believe
that complaint is similarly misguided. There is no prohibition on the
ANCA Endowment Fund’s making grants to the ANCA for proper purposes,
and no group or individual has come forward with any specific example
of any grant by the ANCA Endowment Fund to the ANCA made for any
allegedly improper purpose.

By contrast, we at the ANCA Endowment Fund stand firmly behind our
2005 and 2006 grants to the ANCA, which were made principally to
fund the ANCA’s Capital Gateway Program, which is designed to promote
the participation of qualified Armenians in national civic affairs,
a purpose entirely consistent with 501(c)(3) activity.

We hope that this information addresses any concerns you may have had
arising from the recent CREW allegations, and that it reaffirms your
confidence in us.

As always, we thank you for your continued support of the ANCA
Endowment Fund.

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