Appeals court rules against Feeding Our Future-linked nonprofit

Could this be the end for the free-food nonprofit Partners in Nutrition?

In a ruling published last month by the state Court of Appeals, the court ruled that the state Dept. of Education (MDE) was justified in denying hundreds of unpaid food invoices submitted by the St. Paul-based nonprofit Partners in Nutrition, d/b/a Partners in Quality Care.

To understand the link between the two nonprofits, Feeding Our Future and Partners in Nutrition, and the scandal around two Federal free-food programs, Joey Peters of Sahan Journal has a useful roundup of recent developments in the case. Peters writes.

While prosecutors have centered the case on Feeding Our Future, the defunct nonprofit that received hundreds of millions of dollars in federal money and distributed it to dozens of nonprofits, they haven’t formally charged anyone who worked for the similar nonprofit, Partners in Quality Care, which federal prosecutors have indirectly identified in the scheme.

In the Feeding scandal, Federal prosecutors have indicted 60 individual defendants. Fourteen have pled guilty and been convicted of their roles in the case. None have been sentenced, as of yet.

Another defendant has died awaiting trial in the case. Peters reports that the remaining defendants have Federal trial dates set for 2024, ranging from January through the autumn of next year.

Back to the state Court of Appeals. The Court did find in favor of Partners on one issue. The court ruled that MDE went too far in terminating Partners participation in the free-food program altogether. Further, the Court opened the door for Partners to renew its applications for an additional 213 new food distribution sites (footnote 11, p. 18).

However, it appears that Partners was counting on the revenue from those unpaid invoices to restart operations. The nonprofit now appears to be permanently closed. As the lawyers say, the issue may be moot.

In denying the payment of rejected invoices submitted by Partners, the Court referred back to a similar case involving another free-food nonprofit. New American Development Center (NADC, unrelated to either Feeding or Partners) also sued MDE last year for payment of rejected food invoices. The Court issued its ruling in favor of MDE in July of this year.

NADC makes for an interesting case study in collateral damage. The nonprofit has never been linked, in any manner, to the figures in the Feeding Our Future scandal.

NADC was founded in 2008, and prior to the pandemic, consistently produced $200,000 a year (give or take) in revenue. Once Covid hit, NADC signed up for the free-food programs and quickly rose to be one of the state’s largest independent sponsoring nonprofits, operating what may have been the second-largest single food distribution site.

According to the IRS form 990 tax return filed by NADC, the nonprofit did $9 million in business in calendar year 2021. The denial by the Appeals Court of approximately $900,000 in reimbursements to NADC for food invoices will be a blow to the nonprofit and its work.

Fortunately for NADC and its clients, free food is not the nonprofit’s only line of business. For example, NADC also participated in a short-lived housing program on behalf of the Minnesota Housing Finance Agency during the Covid emergency. NADC also operates a rental assistance program for the City of Minneapolis.

Here are some of the state sources of funding for the nonprofit (note the figures are presented on a fiscal year, not calendar year, basis):

The free-food scandal lives on in other state lawsuits. Early in the scandal (March 2022), state Attorney General Keith Ellison intervened in the efforts of Feeding Our Future to dissolve and go out of business. That lawsuit is now scheduled for a Zoom hearing in court on April 15 (Tax Day!) 2024.

Likewise, MDE sued Feeding Our Future and its former CEO Aimee Bock to recover costs from an earlier lawsuit. That case had a hearing earlier this month and is awaiting a ruling by the presiding judge.

The wheels of justice grind slowly.