Hainan Cihang Charity Foundation Won't Solicit Funds in New York

Hainan Cihang Charity Foundation Won't Solicit Funds in New York

The Hainan Cihang Charity Foundation, a New York City-based foundation established by the HNA Group, a Chinese conglomerate, has told the New York attorney general's office that it will not register as a fundraising organization, Bloomberg reports.

In response to a letter sent by New York State attorney general Eric Schneiderman at the end of July advising the foundation, which recently received shares worth $18 billion from the Chinese conglomerate, to register with the state's Charities Bureau within twenty days or explain why it could not, the foundation said it would register instead as a nonprofit organization that merely holds, rather than solicits, funds. "Our client has not and does not intend to solicit charitable contributions in New York State, and therefore executive law registration is not required," attorney Michael Lehmann said in the letter. Foundation spokesperson Matt Benson told Bloomberg that the charity received its first $5 million donation in March, and that the donation, and future funding, would come from company sources.

Allen Wu, another lawyer for HNA and the foundation, previously had told Bloomberg that the foundation could not register with the AG's office until it had received its 501(c)(3) designation from the Internal Revenue Service, which was pending. However, Amy Spitalnick, a spokesperson for the attorney general's office, noted that "[c]haritable organizations are required to register regardless of their tax status."

Schneiderman also is seeking detailed information about the foundation, including the names of its officers and affiliates. The largest Chinese investor in the United States, the Hainan-based HNA Group has faced increased scrutiny ever since Anthony Scaramucci, the short-lived White House communications director, announced in January he was selling his hedge fund to an HNA subsidiary. That deal has been delayed by the Treasury Department's Committee on Foreign Investment in the U.S., which vets sales of American assets to foreign buyers. HNA's announcement that as a result of the $18 billion share transfer, 52 percent of the company is now owned by Cihang foundations, including a 22.8 percent stake held by a sister charity in China, has raised further questions about its murky shareholder structure and political connections.

Erik Larson. "HNA's Foundation Tells N.Y. It's Not Raising Funds in N.Y." Bloomberg 08/03/2017.