In another sign of the tough times in Washington these days, the White House Gift Shop, long run by a nonprofit group that helps uniformed Secret Service officers and their families, has gone broke.The Secret Service Uniformed Division Benefit Fund, which traces its roots to the 1940s and for years did business as the official White House Gift Shop, lists more than $600,000 in liabilities in a pending bankruptcy petition in Washington.
The fund — which operated independently of the White House and Secret Service, and was not a part of the government — disclosed tens of thousands of dollars in assets consisting mostly of Christmas decorations, as well as such trinkets as magnets, puzzles and paperweights, many valued at just a few dollars each.
The price of more than 140 Democratic and Republican mouse pads is listed as “???” in court records, while 10 unsold copies of the book “Adams’ Alligator” go for $8.48.
The bankruptcy petition, filed in June in a case that remains active, doesn’t explain why the fund went bankrupt in the first place, but court records reveal a recent history of tax troubles and litigation.
A trustee appointed in the case, Wendell Webster, said in a phone interview Thursday that he is trying to market and sell what assets remain, including a Cal Ripken Jr. commemorative plaque that the fund priced at $500 in bankruptcy papers.
The fund, billing itself as the official White House Gift Shop, operated a retail outlet in the Eisenhower Executive Office Building before moving into National Press Club, which the fund has since vacated.
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One of the creditors in the case, the landlord for the Press Club building, CPT NP Building LLC, filed a claim Oct. 2 for more than $120,000 over the lease, but then withdrew the claim days after filing it. An attorney did not return a request for comment on the reason for the withdrawal, but court records make clear that not much money is left for creditors.
“We are especially pleased to announce the forthcoming White House Gift Shop patriotic themed indoor park, gift shop megastore, two themed restaurants, and a full-service International Guest Center in downtown DC with project completion in 2018,” the site states.
In an email Friday, Anthony Giannini, of Giannini Strategic Enterprises, wrote that the nonprofit fund had operated as the White House Gift Shop. He wrote that’s a separate entity from the “White House Gift Shop, Est. 1946,” which he said hasn’t been affected by the bankruptcy. He said he’s setting up a foundation to continue the shop’s “original philanthropic missions.”
Bankruptcy records show the fund received $3,000 in the deal to transfer its online store software to the company.
The current site also includes a section for people to become benefactors of the benefit fund, donating $10 or more online. However, the fund has filed for Chapter 7 bankruptcy and is liquidating.
The site also includes a section for people to become benefactors of the benefit fund, donating $10 or more online. However, the fund has filed for Chapter 7 bankruptcy and is liquidating.
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David Lynn, a bankruptcy attorney for the fund, said that part of the website may be a vestige of old times. He said the fund has no involvement in the site. He declined to comment on what led to the fund’s demise.
The fund traced its roots back to 1946 and the establishment of the White House Police Benefit Fund, which would send flowers to members who had deaths in the family and provide retirement gifts.
The fund’s most recently available annual report to the Internal Revenue Service lists $10,550 in expenses in 2011 for golf, soccer and hockey tournaments for employees, $5,330 for luncheons for new graduates and their families and $1,108 for flowers and fruit baskets for hospitalized members and for funerals.
The same filing shows the fund lost $24,000 in 2011, reporting revenue of $273,000, which was down from $365,000 in revenue in 2008, according to IRS forms compiled by the website CitizenAudit.org.
Among other creditors in the bankruptcy case, the D.C. government has filed a claim for more than $6,000 for unpaid sales and franchise taxes.
Adding to the financial woes, the fund became entangled in litigation in California and the District over a licensing deal to sell products with the Great Seal of the United States.
Meanwhile, Mr. Webster is left picking through what is left of the Secret Service fund’s few assets to pay back creditors.
An attorney for Mr. Webster recently disclosed plans to sell off more than 7,000 holiday ornaments first in the fund’s bankruptcy petition, records show.
Although the fund placed the value of ornaments at more than $50,000, the trustee said the decorations ultimately could fetch a best offer price of a little more than $5,600.
• Jim McElhatton can be reached at jmcelhatton@washingtontimes.com.
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