IRS revoked police union’s 501.c3 after convicted tax cheat cop didn’t file returns

EAST CLEVELAND, OH – The twice-convicted police captain leading East Cleveland’s detective bureau may soon find himself facing new criminal charges after Ohio’s State Employee Relations Board (SERB) investigates why Fraternal Order of Police (FOP) Lodge #39 is still in existence. 

The Internal Revenue Service (IRS) automatically revoked FOP Lodge #39’s tax-exempt status in 2013 after its president, Captain Scott Gardner, failed to file required 990 tax returns in 2010, 2011 and 2012. 

The last 990 was filed for 2009.  EJBNEWS has learned no 990’s were filed between 2010 and 2018.  For the past 10 years Gardner and other Lodge #39 officials have been receiving dues from the wages paid to East Cleveland cops  without reporting what they’ve done with the money to the IRS.  

Cuyahoga County Prosecutor Michael O’Malley indicted Scott Gardner on January 29, 2014 for failing to report over $22,000 in earnings and for failing to collect withholding taxes from security company employees.

Gardner and other FOP Lodge #39 officials were required each year after the automatic IRS revocation to file an annual report to the SERB letting the state agency knowif the “tax exempt organization” complied with all laws.  The report is due within 5 months and 15 days after the end of the fiscal year.   EJBNEWS has reached out to SERB to learn if the reports were filed and why it was allowed to exist and collect public funds as dues as a revoked tax-exempt organization.

The most recent collective bargaining agreement between the FOP “gold” or Lodge #39 and the city is dated April 14, 2015.   It’s signed by “Gary A. Norton” as the mayor and expired on June 31, 2017.  The agreement appears to be “unexecuted” as it does not bear the signatures of contract lawyer Willa Hemmons or Gardner as Lodge #39’s official representative.  There is no companion legislation attached to the agreement which shows it was approved by East Cleveland city council.  It is signed on the FOP side by an official of the national organization, not Lodge #39, who has no authority to bind East Cleveland to the agreement.

Prior to the April 2015 contract Gardner was indicted by two separate Ohio county prosecutors for violating the state’s tax laws.

Captain Scott Gardner was appointed to lead East Cleveland’s detective bureau after he pled guilty twice for failing to file and pay taxes.

On November 21, 2013 the tax cheating detective was indicted by the Medina county prosecutor for trafficking in tobacco products to avoid paying taxes.  He pled guilty.

Approximately two months later on January 29, 2014 Gardner was indicted by Cuyahoga County Prosecutor Michael O’Malley for failing to pay taxes on over $22,000.  He was charged for failing to file tax returns between 2011 and 2013.  He pled guilty.  In April 2011 Ohio’s Secretary of State cancelled Gardner’s Non-Plus Ultra Investments, Inc. for not filing and paying taxes.

Gardner’s latest tax law violations could present other problems for him with SERB because the state agency recognized Lodge #39 as an employee collective bargaining unit based on the truthfulness of the information union officials filed in their annual report.   

East Cleveland’s mayor between 2006 and 2009 suspended Scott Gardner twice for insubordination and refused to promote him to sergeant. Gardner had written bad checks to security company employees. The former mayor wanted him fired. After 2009 Gardner was promoted to sergeant and later charged with two other detectives for stealing evidence from drug dealers. The letter above shows the plea agreement he signed to avoid a trial for being a tax cheater.

The state’s involvement in the 2015 through 2017 agreement with the “revoked” FOP lodge is evidence SERB officials believed they were interacting with a legitimate and legal employee organization.

Gardner and other union officials should have informed SERB that Lodge #39’s tax-exempt status was revoked; and the union was no longer authorized to collect dues or negotiate as a “recognized” and official collective bargaining unit. 

The essence of Lodge #39’s IRS tax-exempt revocation created a reality for East Cleveland cops that they have no union.  The city in 2015 had no legal obligation to negotiate or enter an agreement with FOP Lodge #39.  All the money collected for dues should be returned.

IRS penalties for non-filing tax-exempt organizations that do so without cause are severe.  Information from the IRS website explains that organizations with gross receipts of less than $1,020,000 for its tax year will have a penalty of $20/day for each day that the return is late. The maximum penalty is $10,000 or 5 percent of the organization’s gross receipts, whichever is less.

Organizations with gross receiptsof more than $1,020,000 are penalized up to $100/day for up to a maximum of $51,000. 

The penalties against Gardner and other FOP officers who failed to file are $10 a day for a total of about $5000 per non-filed return.

Eric Jonathan Brewer

Cleveland's most influential journalist and East Cleveland's most successful mayor is an East Saint Louis, Illinois native whose father led the city's petition drive in 1969 to elect the first black mayor in 1971. Eric is an old-school investigative reporter whose 40-year body of editorial work has been demonstrably effective. No local journalist is feared or respected more.

Trained in newspaper publishing by the legendary Call & Post Publisher William Otis Walker in 1978 when it was the nation's 5th largest Black-owned publication, Eric has published and edited 13 local, regional and statewide publications across Ohio. Adding to his publishing and reporting resume is Eric's career in government. Eric served as the city's highest paid part-time Special Assistant to ex-Cleveland Mayor Michael R. White. He served as Chief of Staff to ex-East Cleveland Mayor Emmanuel Onunwor; and Chief of Communications to the late George James in his capacity as the Cuyahoga Metropolitan Housing Authority's first Black executive director. Eric was appointed to serve as a member of the state's Financial Planning & Supervision Commission to guide the East Cleveland school district out of fiscal emergency and $20 million deficit. Former U.S. HUD Secretary Alphonso Jackson told Eric in his D.C. office he was the only mayor in the nation simultaneously-managing a municipal block grant program. Eric wrote the city's $2.2 million Neighborhood Stabilization Program grant application. A HUD Inspector General audit of his management of the block grant program resulted in "zero" audit findings.

As a newspaper publisher, Eric has used his insider's detailed knowledge of government and his publications to lead the FBI and state prosecutors to investigations that resulted in criminal prosecutions of well-known elected officials in Ohio; and have helped realign Cleveland's political landscape with the defeat of candidates and issues he's exposed. Eric's stories led to the indictments of the late Governor George Voinovich's brother, Paul Voinovich of the V Group, and four associates. He asked the FBI to investigate the mayor he'd served as chief of staff for public corruption; and testified in three federal trials for the prosecution. He forced former Cuyahoga County Coroner Dr. Elizabeth Balraj to admit her investigations of police killings were fraudulent; and to issue notices to local police that her investigators would control police killing investigations. Eric's current work has resulted in Cuyahoga County Judge John Russo accepting the criminal complaint he guided an activist to file against 24 civil rights-violating police officers in the city he once led for operating without valid peace officer credentials. USA Today reporters picked up on Eric's police credentials reporting from his social media page and made it national.

Eric is the author of of his first book, "Fight Police License Plate Spying," which examines the FBI and local police misuse of the National Crime Information Center criminal records history database. An accomplished trumpet player and singer whose friendship with Duke Fakir of the Four Tops resulted in his singing the show's closing song, "Can't Help Myself": Curtis Sliwa of New York's Guardian Angels counts Eric among his founding chapter leaders from the early 1980's role as an Ohio organizer of over 300 volunteer crime fighters in Cleveland, Columbus and Youngstown, Ohio. For his work as a young man Eric was recognized by Cleveland's Urban League as it's 1983 Young Man of the Year.

Known in Cleveland for his encyclopedic knowledge of government and history, and intimately-connected with the region's players, every local major media outlet in Cleveland has picked up on one of Eric's stories since 1979. There is no mainstream newspaper, television or radio outlet in Cleveland that does not include an interview with Eric Jonathan Brewer in its archives over the past 40 years.