In one of the biggest stories in the last few weeks, Linux and Main reported Friday that the KDE League - KDE's promotional (and press release issuing) organization - had ceased to exist. According to the report at the time, that publication's Dennis Powell said the situation consisted of missed payments on a franchise fee, but also suggested that the KDE League might be failing to release information as required by the Internal Revenue Service. Now, with new information obtained by Open for Business, it seems these concerns can be laid to rest.
The issues expressed in the article mentioned above, and another one published on Monday, break down their concerns into four points. These were the dissolution, web site outage, tax-exempt status, and secrecy of financial records. While not all of these concerns were directly related to the original article's coverage, all of them have had some light shed on them in the past few days.
As the second Linux and Main article noted, the first issue resolved itself when the Delaware Secretary of State's office realized that the dissolution was an error on their part. Apparently much of the problem arose from the Secretary of State's office assessing late fees that do not apply to not-for-profit organizations such as the League. With the resolution made, the organization's status has been resolved retroactively, and as League chairman Andreas Pour mentioned, “It actually doesn't affect much [anyway].”
The second issue concerned the disappearance of the League's web site. Domain records show that the web site is hosted courtesy of KDE League Chairman Andreas Pour's company, which had suffered a hardware failure in mid-September. This problem was also remedied earlier this week, even though Pour's own sites remain down due to the software upgrades needed after the hardware failure.
Perhaps the most controversial issue over the past few days was the League's tax status, which Linux and Main's sources suggested was 501©(3) - a non-profit charity. The ramifications of such a claim suggested that the League very well could have been in violation of IRS requirements for public availability of financial records. Mr. Pour denied these claims over the weekend, saying the League had never filed for such status, yet the article published at Linux and Main on Monday repeated the assertion with quotes from a Delaware state official (the state the League is incorporated in). However, after Mr. Pour sent us a letter last night noting that the IRS's charity database, which is publicly viewable, did not list the KDE League, we decided to stop by the IRS's site in an attempt to confirm this. Indeed, the IRS's database (which seems to be exhaustive) reported that there were no charities with “KDE” in their name, thus confirming that the League is not a 501©(3) entity.
The final issue was the ever-present complaint about the secrecy of the League's financial records. In a release issued last night by Matthias Kalle Dalheimer, the president of KDE e.V., it was noted that KDE e.V., which has veto power in the League, was in part responsible for the decision not to disclose any records. According to Dalheimer, “The Board of KDE e.V. does not believe it is productive to disclose the books of the KDE League to the general public, but is of course willing to authorize the KDE League to disclose the books to elected KDE e.V. members.” Dalheimer also touched on questions about “accounting irregularities,” stating that “at this point and with the current knowledge absolutely no reason to believe that there are any irregularities in the bookkeeping of the KDE League.”
For more information from KDE e.V., you can find their response at KDE Dot News. Also, for your convenience, we have gathered a summary of key quotes from Mr. Pour and Mr. Powell (of Linux and Main) below, if you are interested in refreshing your memory on everything that has happened in the past few days. Finally, on a side note, it should be said that the minor 3.0.4 bugfix release of KDE is now available.
Executive Summary of Events
After receiving requests on the various public KDE mailing lists as to whether the information from the Linux and Main report mentioned at the beginning of this piece was correct, Mr. Pour responded, “Parts of it [are true]. As to the dissolution issue, that is something that needs to be straightened out with the League's lawyers, who are supposed to be handling this, undoubtedly some clerical mix-up.”
Pour clarified his statements on the KDE-Cafe list, saying, “The dissolution thing is something states [use] as a sledge-hammer to get companies to pay the franchise taxes. This is particularly important in Delaware, as the state uses its corporate laws for general revenue generation. It actually doesn't affect much, the most important result is that you cannot sue others in court. Once you pay, your corporate powers are restored retroactively.” He continued, “As to the supposed IRS from [sic] … the League is not a non-profit but rather a not-for-profit and hence need not file the forms.”
The discussion, which became heated at times, continued through out the weekend without any real progress. The only apparent accomplishments, it seemed, was that of escalating the debate into a head spinning array of responses and counter-responses that quickly became almost unmanageable. Other parties subscribed to the said mailing list joined in as the conflict transformed itself into a primer on IRS tax-code, which only served to move the debate from a specific case to that of more abstract theory as it plowed along on Sunday.
Then on Monday, the Linux and Main reporter revisited the issue after apparently conversing with the Delaware Secretary of State's office on the subject. The report dismissed Pour's assertions from two days prior, saying “The state has record of its having been granted 501©(3) status …The corporation, she said, is 'in good standing now.' … Delaware says that the KDE League either had or claimed that the IRS had granted it the designation.” The report also questioned Pour's statement concerning its not-for-profit status, linking to the organization's by-laws, which call it a “not-profit” corporation instead.
The plot thickened again yesterday afternoon when Mr. Pour repeated accusations against Linux and Main, this time with an apparent denial, from the Delaware Secretary of State's office, of the information published in Mr. Powell's second report. In his letter, the chairman reported, “To answer these questions [about the League's 501©(3) status] I was transferred to Dot Savage, who told me that she made the good standing correction yesterday. I read her the quotes from the “story”, and she insisted (a) that she had not said those things; (b) that nobody should have said those things; and © that they were factually incorrect. She made clear the obvious, that Delaware is concerned only with state corporate law and not with federal tax law (i.e., tax-exempt status).”
The second news report was amended with an update referring to Andreas Pour's latest communique, as well as a response, Tuesday evening. The Linux and Main response read, “Readers are encouraged to follow the link and read the response. Linux and Main stands by its story.”
Yet it seems that Pour may have finally found the “checkmate” that can settle this debate. As mentioned in the main portion of this report, the Internal Revenue Service has no record of the KDE League being a 501©(3) organization. Thus it seems we can finally bring this debacle to a close with the finality of the taxing authority's very own opinion.