What’s behind the Omidi brothers’ charity?
The relationship between charities and philanthropists in the business community is governed by a sort of Newtonian law of equal and opposite benefits.
The charities get money, goods or services. Their donors get self-satisfaction, community goodwill (which might mean more customers coming in the door), and positive character references to display to jurors, regulators or congressional subcommittees, if necessary.
How much of that might apply to a newly formed Los Angeles philanthropy called No More Poverty? The organization, which was incorporated in May, was founded by brothers Michael and Julian Omidi, according to its website, because “to sit on the sidelines” while people around the world go without food and shelter “is not something that the Omidi Brothers can stand idly by and accept.”
Since being established, the organization has issued a fair number of news releases about its support of small charities. The idea, it says, is to encourage others to make their own donations to those organizations. No More Poverty lists some of its recipients on its own website too.
The website says the Omidi brothers have applied to the Internal Revenue Service for 501(c)3 status for their organization, which would make contributions to No More Poverty tax-deductible.
In principle, this is a laudable effort. Who can be against fighting poverty? Makes you want to know a little more about the Omidis, doesn’t it? That way, you can judge for yourself whether they should be permitted to raise money by using a tax deduction as a come-on.
The Omidis are the people behind the 1-800-GET-THIN advertising campaign for weight loss surgery that until recently was slathered over California freeways and the radio and TV airwaves. The ads, featuring the slogan “let your new life begin,” aimed to promote operations using the Lap-Band, a device surgically implanted around the stomach to suppress appetite. The ads disappeared after the Food and Drug Administration ruled in December that they violated prohibitions against “false or misleading” advertising by underplaying the procedure’s risks to patients.
The Times has reported that at least five patients have died following Lap-Band procedures at clinics affiliated with 1-800-GET-THIN, according to lawsuits, coroners’ autopsy reports and other public records. One of those deaths is under investigation by the Los Angeles Police Department’s Robbery-Homicide unit. Julian and Michael Omidi have been identified in court documents and other public records as owners of the clinics where the surgeries were performed. State insurance regulators are also investigating alleged insurance fraud connected with the centers.
Julian Omidi’s medical license has been revoked by the California Medical Board, which cited in its revocation decision his “penchant for dishonesty.” The board placed Michael, a doctor, on three years’ probation after he stipulated to a finding that he performed surgeries at an unaccredited center. The probation was completed in October.
Lawyers for 1-800-GET-THIN and the Omidis said in January that the business had never engaged in insurance fraud and that no wrongdoing at the surgery centers had ever been found. In the course of The Times’ reporting on 1-800-GET-THIN, the Omidis and their affiliated companies and their associates filed seven lawsuits against The Times, its journalists, and commenters on its website. All the cases have been dismissed.
Whether the Omidis’ No More Poverty gets its tax-deductible certification is up to the IRS, of course. But let’s just say that, given this record, one hopes that the IRS examines the application very carefully.
The record also warrants taking a close look at the altruistic efforts the Omidis have undertaken thus far. Their website states that they seek to work “to solve the issue of poverty in countries from Algeria to Zimbabwe.” Last week, the website was listing three charities they “support,” and a spokeswoman, Hallie Stafford, gave me the name of two more. One of those listed, Youth Speak Collective of Pacoima, which provides educational resources for low-income at-risk youths, told me late last week they haven’t received any money from No More Poverty. I called all the named recipients, and judging from what they told me, No More Poverty’s total outlay to them has been $4,000.
As was first reported by KPCC radio, another charity, Mountain View-based ReSurge International, which provides free reconstructive surgery to patients in the Third World, returned a $2,000 donation from Michael Omidi after learning about his background and discovering that it had been named on the website without its permission. “Our research turned up the problems surrounding his past,” ReSurge CEO Susan W. Hayes told me. Shortly after she objected to being listed on No More Poverty’s website, ReSurge’s name came down, she says.
Perhaps it’s churlish to wonder if this energetically publicized effort isn’t basically for show, as the Omidis face regulatory and legal issues stemming from their business. But considering that the GET-THIN enterprise at one point collected more than $20 million a month in revenue, according to testimony by a former surgeon there, this is rather a slow start toward the Omidis’ goal of increasing “the standard of living and quality of life for everyone living on this planet.”
That’s not to say that the Omidis’ feelings about poverty may not be heartfelt, or that their past record and the accusations about their business disqualify them as philanthropists.
Indeed, society would be immeasurably poorer were it not for the phenomenon of wealthy business leaders pondering their own pasts and striving to square things with the Big Guy before reporting to the Pearly Gates. There’d be no Carnegie libraries, museums, or Endowment for International Peace; no Ford Foundation; no Nobel Prizes. Public and private universities would have more vacant lots than richly equipped laboratories and classroom buildings.
Nor is it always a simple matter to find the dividing line between genuine altruism and self-serving philanthropy, especially when a commercial entity is making the contribution. The conundrum has even become part of popular culture: Remember the Broadway producer Max Bialystock of Mel Brooks’ ”The Producers,” giving little old ladies one last romantic thrill while extracting from them big investment checks made out to “cash.”
It’s hardly unusual for foundations to be established or contributions made “for appearances,” says Daniel Borochoff, founder of CharityWatch, which issues a charity rating guide several times a year.
“One can make the argument that charities don’t exist to give bad actors good images,” he says, “but many charities are hungry for money and aren’t paying too much attention to who’s giving it.”
As it happens, some recipients of money from No More Poverty had no idea who was behind it before they got the donations, and they’re unsure how to react. The nondenominational Mariners Church of Irvine received a $1,000 grant toward its outreach program in earthquake-stricken Haiti. A church spokesman, Blair Farley, says it didn’t know anything about No More Poverty before the donation came in, but “we’ve begun to hear about the darker side of who they are.” He says the church wasn’t asked for its permission before its program got listed on No More Poverty’s website, and that church executives will be considering whether to return the money.
Youth Speak Collective’s executive director, David Kietzman, says he’s aware of the Omidis’ background, but nevertheless feels that getting publicity through their website may help his program. “I view our association as being with No More Poverty” rather than with the Omidis, he says. “Who knows what could come of it? I figured it couldn’t hurt.”
Still, for small charities without a publicity machine of their own, a reputation for probity and integrity is all-important. In my experience, the managers of legitimate philanthropies are among the least cynical people in the world. But in this case as in others, applying a little cynicism to the motivations of people offering you money may be the safest approach.
Michael Hiltzik’s column appears Sundays and Wednesdays. Reach him at firstname.lastname@example.org, read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.