The Connecticut attorney general will drop a lawsuit against the USA for Africa Foundation this week following the Century City-based charity's compliance with Connecticut's strict charity laws.
"We've withdrawn the suit," Assistant Atty. Gen. Susan Brooks Flanders said on Tuesday. "That means we have filed the necessary papers to withdraw the action."
Flanders, one of three assistant attorneys general who enforce Connecticut's charity disclosure law, said USA for Africa filed an annual report and its Internal Revenue Service Form 990, showing earnings totaling $44,178,825 for 1985. Foundation officials have until May to file similar disclosure statements for 1986.
Most of the foundation's reported 1985 earnings of $38,209,126 were royalties from "We Are the World" record and merchandise sales.
Connecticut Atty. Gen. Joseph I. Leiberman and Consumer Protection Commissioner Mary M. Heslin sued the foundation in Hartford Superior Court on Sept. 26, asking that USA for Africa be restrained from soliciting charitable contributions in Connecticut until it filed a financial statement. The statement arrived last week, Flanders said.
"I regret that it took a lawsuit to obtain this information," Leiberman said in a prepared statement. "However, from our review, it appears that the charity raised and spent the public's money in a thoroughly proper manner."
In 1985, the foundation spent $731,864 on management overhead and provided $8,018,913 for African and domestic relief, according to the statement. Most of the remaining $35,428,048 was scheduled to be distributed after 1985.
Leiberman said his staff will be consulting with the charity on two technical questions raised by the report. One deals with specific information about promotional expenses. The other involves a schedule of grants and allocations for African and domestic relief.
Flanders said the public charities unit of the Attorney General's Office was established in June, 1985.
"The Solicitation of Charitable Funds Act has been around for many years but the attorney general only recently decided to establish a unit just to enforce the statutes," she said.
Though the USA for Africa case has received more notoriety than other charities, it is not the first time that the public charities unit has sued for financial disclosure, she said. Since its inception, the unit has brought both civil and criminal actions against several charities that solicit contributions in the state, she said. The Connecticut charitable reporting law and its enforcement procedures are generally regarded as among the toughest in the nation.
USA for Africa had not filed a similar disclosure statement with the California Attorney General's Office of Charitable Trusts in Sacramento as of Tuesday, according to an office official. The foundation obtained an extension on the normal filing deadline, however, and has until Nov. 15 to file the statement.
The foundation, officially known as United Support of Artists for Africa, produced the "We Are the World" single, album, video and other merchandise to raise money for famine victims in Ethiopia and other African countries.
This year, the foundation staged the Hands Across America spectacle over Memorial Day weekend. In that event, participants were asked to contribute at least $10 to stand in a single line from coast to coast during a 15-minute sing-along of "We Are the World," "Hands Across America" and "America the Beautiful." The estimated $15 million raised from the event is to be distributed to the homeless and hungry of the United States.
Hands Across America receipts and expenses will be required as part of the 1986 report to the Connecticut Attorney General's Public Charities Unit.