NH eyeing MADD's deal with Mass. firm
The Attorney General's Office is looking into an agreement between Mothers Against Drunk Driving and a Massachusetts wholesaler that uses the charity's logo to solicit donated items it then sells for profit.
In exchange for displaying the MADD logo on its clothing and book collection containers, CMRK Inc. of Northborough, Mass., pays a "license fee" of $10,000 a year to the charity, according to a "licensing agreement" between the two entities.
The white bins, placed at service stations or strip malls in several New Hampshire communities, bear the red MADD logo and read "Donate Clothing & Shoes" or "Book Recycling," but have no contact information.
Terry Knowles is assistant director for the Charitable Trusts Unit of the AG's Office. She's worked in that office for more than 30 years and said she's never seen an arrangement quite like the one between MADD and CMRK.
Knowles said her office has not opened an official investigation into the MADD donation boxes, but is looking into the situation. "We are moving on it because there are questions about what this is, and whether or not a consumer putting their clothing into this bin would believe that they are giving to Mothers Against Drunk Driving," Knowles said.
Her office started getting calls last summer from people asking whether the donation bins were indeed supporting MADD.
Last week, after Knowles' office had sent repeated requests for information to MADD's Texas headquarters, the charity sent the state a copy of its five-year licensing agreement with CMRK, dated Dec. 7, 2011.
"And now that we've looked through the agreement and started to reach a little deeper . . . we have more questions than answers," Knowles said.
Among the issues is the role of the for-profit company in soliciting donations under a charity's name, she said. "The question is why is it being done this way. There may be a perfectly legitimate reason, but when we see something that, again, we're not used to seeing, something unusual, we do ask about it."
Anna Duerr, director of communications for MADD's national office in Texas, said MADD's New Hampshire chapter does not have an executive director and relies solely on volunteers.
Asked how the CMRK clothing bins ended up here, Duerr said the MADD chapter in Connecticut "had seen the success that resulted from these types of clothing donation bins, and so we looked at it from the national office, and there was some interest in kind of expanding that to New Hampshire."
"MADD expanded the clothing donation program to New Hampshire this year in order to raise the necessary funds to locally achieve MADD's life saving mission to stop drunk driving, support the victims of this violent crime and prevent underage drinking in New Hampshire," Duerr wrote in a follow-up email.
The agreement grants CMRK a non-exclusive license to use the MADD name "for display" on clothing bins and book collection containers. Monthly payments of $833.33 are to be sent to MADD New Hampshire, 123 Goffe St., Manchester, with checks payable to Mothers Against Drunk Driving.
Knowles said her office is also looking into why those payments are being sent to New Hampshire, since the state chapter of MADD is no longer registered as a charity here. Only the national organization in Texas is registered.
MADD still has an office on Manchester's West Side. That office was closed Thursday afternoon when a reporter visited, and no one was answering the phone there last week.
Documents on file with the secretary of the Commonwealth in Massachusetts show Fawaz El Khoury as the sole principal of CMRK Inc., which is listed as a domestic profit corporation and described as a "wholesaler — used clothing."
According to reports published in the Berlin Daily Sun, Fawaz El Khoury purchased 10 convenience stores and service stations in the North Country for $3.8 million this year. In articles of incorporation filed with the secretary of state last January, El Khoury is listed as the contact person for those stores and CMRK's address is listed as the business address for those stores in articles of incorporation filed with the secretary of state last January.
Despite repeated voicemail messages left at CMRK last week, El Khoury could not be reached for comment.
Knowles said it's not unusual for nonprofits such as the American Heart Association and breast cancer charities to license their logos in exchange for a certain percentage of proceeds from sales.
Ordinarily, she said, "there is some kind of a statement made about what's happening with the charity that's allowed its name or logo to be used. Here you have none of that.
"All you have is the symbol and those four initials — MADD — so the question becomes: Because none of those bins say in any shape or form 'a certain percentage is going to MADD' or 'we've licensed this name,' you have no idea what the relationship is as a consumer between the charity and the bin."
Knowles said it's not yet clear where this falls under New Hampshire statutes that govern how charities operate. She said her unit may consult with the Consumer Protection Division of the AG's office "to see whether or not they have any sort of jurisdiction or indeed any investigative powers over this situation."
Some states require organizations to put disclaimers on collection boxes, explaining just what happens to donations, Knowles said, but New Hampshire currently has no such language in its statutes.
Still, Knowles said, while the deadline for House members to submit legislative service requests for 2013 bills was Friday, there's still time for state senators to do so.
"If we thought this was a pervasive problem, or something that is going to confuse our consumers or mislead them . . . we certainly would, with the permission of the attorney general, contact one of the senators to have legislation put in," she said.
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