Maryland lawmakers say tougher oversight bills for nonprofits rarely pass

(WBFF) — Efforts to tighten oversight of Maryland’s nonprofit organizations have stalled in Annapolis, even as critics say the state’s laws and enforcement leave the sector facing far less scrutiny than for-profit businesses.

State Del. Kathy Szeliga introduced legislation five weeks ago that would prohibit nonprofits from receiving state funding if they have not complied with state laws. Szeliga described the proposal as straightforward, saying during a hearing, “I’m presenting today a very simple and easy bill.”

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In an interview, Szeliga said she expected quick action. “I thought it’d be a slam dunk…” she said. “The bill just says look, if your taxes aren’t paid, or charter isn’t current, you can’t get state money.” She later added, “I was a little surprised that it wouldn’t have just passed immediately.”

But the bill faced resistance during the eight-minute hearing it received at the State House. One opponent warned, “It actually means you’d have to hire more accountants, more lawyers.” Another speaker at the hearing pointed to existing oversight, saying, “We actually do have an office that independently reviews every agency, every sub-department, isn’t that so?”

The bill has not advanced since. Five weeks after the hearing, the House Government Operations, Labor and Elections Committee had yet to vote on it.

Del. Ryan Nawrocki said he could not recall recent examples of lawmakers strengthening nonprofit oversight. “I can’t remember the last time a significant bill passed to put more teeth on non-profits,” Nawrocki said. Szeliga echoed that assessment, saying, “You know, I can’t remember the last time.”

Nawrocki argued the issue extends beyond a single committee. “It is more profound than just that committee if you look at the entire legislature I think you’ll get the same result,” he said. He also claimed, “Probably a half is employed by a nonprofit organization, so its a fox guarding the hens house.”

A FOX45 News investigation revealed that many members of the Government Operations, Labor and Elections Committee have close relationships with nonprofits. The chairwoman works on a council representing nonprofit labor unions, another delegate is the executive director of a nonprofit in Frederick, and almost half of the delegates on the committee are closely linked to the nonprofit community.

Taxpayer advocate David Williams said those connections can create conflicts of interest and called for recusals in some cases. “If you’re on the board of a non profit, you are compromised because you’re voting in the interest of the nonprofit and not for citizens..” Williams said.

Williams also suggested the lack of movement on Szeliga’s bill reflects broader resistance to increased oversight. “When you see a piece of legislation that doesn’t make it to a hearing or to a vote, there’s a reason, is that state legislators don’t want it to come to a vote,” he said.