Black Lives Matter foundation succeeds in having fraud lawsuit against organization dismissed

Black Lives Matter Grassroots Inc. claimed the BLM foundation had raised donations off the work of city-based BLM chapters, then defrauded the public and shut activists out of decision-making.

A California judge has dismissed a civil lawsuit that grassroots racial justice activists from around the U.S. brought last summer against a foundation with stewardship of the Black Lives Matter movement’s charitable endowment worth tens of millions of dollars.

Black Lives Matter Grassroots Inc., a collective of organizers, claimed Black Lives Matter Global Network Foundation Inc. had raised donations off the work of city-based BLM chapters, then defrauded the public and shut activists out of decision-making.

In dismissing the lawsuit, Los Angeles County Superior Court Judge Stephanie Bowick sided with the foundation’s lawyers, who argued that local BLM activists failed to prove they were entitled to the raised funds or that the foundation’s leaders had siphoned off millions of dollars for nefarious purposes, among other unproven allegations.

The fraud claim against the foundation was, in part, based on the alleged misrepresentation of a $6 million Los Angeles-area compound purchased with donated funds. The foundation says the property, which includes a home with six bedrooms and bathrooms, a swimming pool, a soundstage and office space, is used as a campus for a Black artists fellowship. BLM chapter organizers say the donated funds were never intended for use that way.

If the fraud allegations were “premised upon misrepresentation rather than concealment, the complaint fails to sufficiently allege the how, when, where, to whom, and by what means the representations were tendered,” Bowick said in a court order issued Tuesday.

Melina Abdullah, co-founder of BLM Grassroots, said Thursday that the group was “stunned and dismayed” by the court’s dismissal order. A lawyer for the local organizers said an appeal would be filed “immediately.”

“As always, the work of Black Lives Matter continues, regardless of the court ruling,” Abdullah said in a statement.

In response to the ruling, the BLM foundation said it also will move forward with its work.

“We have stayed true to our principles, philanthropic duties, and organizational focus despite countless blatant fabrications, misrepresentations, and innuendos of misdeeds lodged against us,” reads a statement the foundation released Wednesday night.

It filed motions to dismiss the lawsuit under California’s Strategic Lawsuit Against Public Participation statute, or anti-SLAPP. The law is meant to prevent plaintiffs from using the courts as a way to intimidate people and organizations that are exercising their free-speech rights.

Justin Sanders, an attorney for BLM Grassroots, said the legal basis of the ruling is a “terrible example of the letter and not the spirit of the law being followed.”

The local organizers’ complaint, filed in state Superior Court last September, had singled out foundation board secretary Shalomyah Bowers and his firm, Bowers Consulting. Bowers’s firm was brought in by BLM co-founder Patrisse Cullors, before her resignation as head of the organization in May 2021, to help the organization build out infrastructure.

The foundation had been financially supporting BLM chapters in the U.S. and Canada, but it desperately needed help amid an unprecedented wave of monetary support and public attention, following the murder of George Floyd by police in 2020. After receiving $90 million in donations between 2020 and 2021 — and spending $37 million on grants, real estate, consultants, and other expenses — the foundation invested $32 million in stocks.

The foundation ended the 2021-2022 fiscal year with roughly $30 million in assets.

Its 2020-2021 IRS filings show Bowers’s firm received $2.1 million to provide operational support, including staffing, fundraising and other key services – that was the lion’s share of what the organization spent on consultants in that fiscal year. But local organizers failed to prove in court that either Bowers or his firm siphoned several millions of dollars in fees from donated funds, as their lawsuit alleged.

These specific allegations against Bowers were “confusing and unintelligible,” Bowick wrote in the court’s dismissal order.

A separate statement issued by Bowers’s firm said the BLM board secretary was deciding how to seek accountability for how the lawsuit affected him and his business.

In a public letter to BLM Grassroots released after the court ruling, the foundation opened the door for mending the relationship with local BLM organizers.

“The problems we face as a community are too great for us to be divided,” the letter reads. “The only way to deal with the critical issues of police brutality, ending state sanctioned violence, economic prosperity for Black people, and achieving a world where Black people across the Diaspora thrive, experience joy, and are not defined by their struggles, is if we heal the past and re-imagine the future.”

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