The National Diversity Council paid former President Bill Clinton and television star Oprah Winfrey thousands of dollars over the years.
Now, they’re bankrupt — and according to a lawuit, it’s because the firm lost millions of dollars to a controversial board member.
The National Diversity Council filed for bankruptcy on March 17 following a lawsuit by its board accusing co-founder R. Dennis Kennedy of misappropriating millions in donor funds.
According to the lawsuit, Kennedy “improperly paid himself millions of dollars from NDC’s donor funds” while using the nonprofit as a front for his for-profit consulting business, Diversity & Leadership Inc.
The group’s 2020 IRS disclosure shows Kennedy was paid $450,000 for just 10 hours of work per week, The Daily Wire reported. In 2022, Kennedy, chief executive officer Ángeles Valenciano, and chief financial officer Jason deGroot “unilaterally decided that they were owed almost $3 million in ‘back pay,’ and then paid themselves more than $1 million of donor funds,” the lawsuit alleges.
When board members became suspicious, the lawsuit claims Kennedy moved the nonprofit’s trademarks and web domains into his own name, creating a fake organization to trick donors into paying him directly.
“Kennedy, Valenciano, and deGroot conspired to protect their scheme and ill-gotten gains by attempting to destroy NDC and move its resources and partnerships to another organization where they could continue exploiting donors’ funds and the organization’s resources with minimal oversight,” the lawsuit states.
Tax records reveal extensive double-dipping, according to The Daily Wire report. Kennedy allegedly received $787,000 from the national nonprofit while also getting $351,113 from the Texas Diversity Council in 2021. Valenciano was paid $460,000 from NDC and $133,000 from Texas, while deGroot received $460,000 from national and $123,000 from Texas.
The three executives claimed to work full-time hours for multiple organizations simultaneously. The lawsuit alleges they “used NDC resources, such as their own time and the time of NDC staff, to assist with non-NDC organizations in order to benefit Kennedy’s other ventures.”
In 2021 and 2022, Kennedy filed for 350 trademarks with the U.S. Patent and Trademark Office, registering NDC’s name and key program names to himself personally. To prove he owned the phrase “National Diversity Council,” Kennedy allegedly sent the USPTO a screenshot of NDC’s website.
Kennedy also allegedly purchased thousands of domain names with NDC credit cards but put them under his personal control.
When confronted about the “back pay” in December 2023, the three executives allegedly conspired to destroy the organization. Emails presented in the lawsuit show Kennedy instructed staff to “remove board from website & Create a New Board” and “Drop the insurance for the Board; cancel today.”
On January 22, 2023, the board voted to suspend the trio with pay pending investigation. All three resigned on February 1, 2023, shortly before scheduled interviews for the investigation. The lawsuit claims deGroot transferred $200,000 to the Texas nonprofit before resigning.
Kennedy is now operating numerous “diversity organizations” that have been accused of being fronts for his for-profit business, including the Racial Justice Institute, National Belonging Institute, and Global Diversity Council. These organizations reportedly sell certifications and consulting services.
Clinton and Winfrey are scheduled to keynote a conference next month that the lawsuit claims is run by Kennedy through his for-profit business, with tickets to meet speakers costing $4,999.
The lawsuit describes the executives’ conduct as giving “rise to criminal liability…at a minimum, a third degree felony.”
Dawn Hooper, an accountant managing the bankruptcy for NDC’s board, confirmed that the website NationalDiversityCouncil.org is “not operated by the National Diversity Council” despite its name.