Government Watchdog Calls for State and Federal Investigations into Abortion Foe, the Heidi Group

The Heidi Group may have violated criminal laws by failing to execute its state contracts and may have violated its nonprofit tax status by conducting prohibited activities

FOR IMMEDIATE RELEASE: September 26, 2017

Contact: Daniel Stevens, dstevens@campaignforaccountability.org, 202.780.5750

WASHINGTON, D.C. – Today, government watchdog group Campaign for Accountability (CfA) filed a complaint with Travis County District Attorney Margaret Moore requesting an investigation into whether the Heidi Group, an anti-abortion nonprofit based in Texas, violated criminal law by misappropriating taxpayer funds.  In addition, CfA filed a complaint against the group with the IRS.

Read the complaints here.

Read an executive summary of the complaints here.

CfA Legal Counsel Katie O’Connor said, “The Heidi Group was barely solvent before the State of Texas agreed to fork over $7 million to fund it.  Prosecutors should look into whether the Heidi Group and its founder and executive director, Carol Everett, misappropriated taxpayer funds by failing to deliver the services pledged in state contracts, but nevertheless continued to submit reimbursement requests.  Texas taxpayers deserve to know where their hard-earned money has gone.”

Between 2016 and 2017, Texas Health and Human Services signed two contracts with the Heidi Group’s Executive Director, Carol Everett, designating nearly $7 million in state funds for the nonprofit.  The Heidi Group promised to provide family planning and reproductive health care to low income Texans by helping subcontractors expand their services.  The state of Texas initiated these programs after eliminating state funding for Planned Parenthood, which led to a significant decrease in women’s access to state health programs.

CfA’s six-month investigation of the Heidi Group, relying on thousands of pages of state records, reveals an appalling record of mismanagement and neglect by Everett. CfA found the Heidi Group provided almost no work for its $1.6 million contract through the Healthy Texas Women (HTW) program or for its $5.1 million contract through the Family Planning Program (FPP).  In March, Everett told a staffer in the governor’s office, “No, we don’t look good, and no, we’re not doing what I planned to do, and no, we’re not doing what I wanted to do,” according to a voicemail obtained by CfA through an open records request.

Click here to read about Carol Everett’s misleading public statements and questionable partners.

CfA has discovered other problems as well. For instance, many of the subcontractors included in the Heidi Group’s original HTW contract appear to be ineligible to provide HTW services through the Heidi Group.  Additionally, the Heidi Group has failed to implement and promote a promised toll-free number to connect prospective clients to the closest clinic.  The Heidi Group has collected nearly a million dollars of taxpayer funds and could collect millions more despite its obvious failure to meet its contractual obligations.

CfA’s complaint asks the Travis County District Attorney to investigate whether Everett and the Heidi Group misappropriated money in violation of Texas’s theft statute, as well as whether the group engaged in deceptive business practices.

CfA also called on the IRS to investigate whether the Heidi Group violated its nonprofit tax status. CfA’s investigation found the Heidi Group failed to maintain a three-person board, as required by law, spent money on expenses that seem unrelated to its tax-exempt mission such as a cruise and a Lincoln Town Car, and engaged in unreported lobbying activity and prohibited electioneering.  Carol Everett, representing the Heidi Group, testified before the State Legislature, and the organization regularly advocates for government policies and regulations. Additionally, the Heidi Group endorsed a congressional candidate, and Everett has participated in several political campaigns where she was identified as the head of the Heidi Group.

Read the IRS complaint here.

O’Connor continued, “In its zeal to defund Planned Parenthood, Texas has wasted money on a group that is misappropriating taxpayer funds and providing no services, leaving women without access to health care. State authorities should immediately investigate the Heidi Group and Carol Everett to find out where all the money has gone and the IRS should strip the group of its nonprofit status.”

CfA’s complaints against the Heidi Group mark the beginning of a new initiative, the Themis Project.  CfA is drawing on its experience as a national accountability organization to expose misconduct and malfeasance in the anti-choice movement.

Click here to sign CfA’s petition to Texas public officials.

CfA is nonprofit watchdog organization that uses research, litigation, and aggressive communications to expose misconduct and malfeasance in public life and hold those who act at the expense of the public good accountable for their actions.