An organization that sprang up in the wake of a train derailment that released toxic chemicals in East Palestine, Ohio, will pay nearly $132,000 and disband, according to a Settlement Agreement released by Ohio Attorney General Dave Yost’s office.
The agreement also bars Ohio Clean Water Fund (OCWF) board member Patrick Lee from forming or holding any responsibilities within a charitable in the state of Ohio. The settlement dismisses the charges against OCWF, and does not call for Lee to admit any wrongdoing.
Under the terms of the settlement, OCWF will pay $116,904.88 in restitution and an additional $15,000 in civil penalties. OCWF founder Michael Peppel remains the subject of a lawsuit, as reported earlier in The NonProfit Times. According to a press statement from Yost’s office, Peppel and the AG’s office are working “to finalize details of an agreement that will protect the charitable sector from any similar misconduct by Peppel and others involved in this scheme.
OCWF was created after a train carrying toxic chemicals from Madison, Illinois to Conway, Pennsylvania derailed and spilled part of its cargo in East Palestine on February 3. The immediate area around the spill was evacuated, and within a wider circle people were warned about water and soil contamination.
According to the initial complaint, “Shortly after [the derailment] and before it was even incorporated, Ohio Clean Water began soliciting charitable contributions by and through its website at https://ohiocleanwaterfund.com/, mass text messages, and mass emails.” The website was offline as of the morning of April 12.
OCWF’s stated purpose was to raise funds for the purchase of bottled water, which was to be distributed to Second Harvest Food Bank of the Mahoning Valley. Leaders at Second Harvest were unaware OCWF was raising funds allegedly on the nonprofit’s behalf, and did not receive funds until Second Harvest posted a notice on its website saying it did not have a relationship with OCWF.
OCWF raised at least $141,000 from more than 3,000 donors, but is only known to have sent Second Harvest $10,000 after the notice was posted. “Unbeknownst to those donors, Defendants apparently spent at least $91,769.26 of those funds on administrative fees rather than programming, leaving $35,295.87 in Ohio Clean Water’s coffers,” according to the initial complaint.
“We sued to make sure the contributions improperly solicited from well-intentioned donors get into the hands of people who will use them for their intended purposes,” Attorney General Yost said in a statement accompanying the settlement agreement. “Our fight isn’t over, but this is a win.”
None of the court papers list an attorney for Peppel. Calls to two numbers believed to be associated with Peppel could not be completed.
