People Helping Horses has agreed not to misrepresent how it spends donations and to routinely audit its finances, the state Attorney General's Office said Friday. The group also has agreed to implement financial controls and provide management training for its executive director and other executive-level employees.
The agreement also prohibits former Executive Director Gretchen Salstrom from being involved with the nonprofit in any capacity. She also is barred for a decade from leading a nonprofit in Washington.
Investigators allege that Salstrom misused donations for her own personal use.
"Gretchen Salstrom was helping herself to money intended to help horses," state Attorney General Rob McKenna said.
Salstrom allegedly used donations to pay for her own horse and dog-breeding business and used the nonprofit's credit cards for "questionable" travel and entertainment expenses, according to state officials.
Salstrom and the group entered into agreements that settle the allegations in complaints filed by the state Attorney General's Office. Salstrom doesn't admit any wrongdoing as part of the consent decree filed in Snohomish County Superior Court.
She has agreed to pay $5,000 for the state's attorney costs. People Helping Horses was fined $50,000. The state agreed to suspend the fine if the group complied with the agreement. The nonprofit faces up to $25,000 in fines if it violates the terms of the consent decree.
An investigation was launched in December 2011 after the state Attorney General's Office received a tip from a concerned citizen.
Investigators learned that People Helping Horses had raised more than $1 million in 2010. They reviewed the group's fundraising practices. The investigation determined that the organization violated the Charitable Solicitations Act, state officials said.
The group claimed it offered a therapeutic riding program for kids with health problems even though it ended the program, said Sarah Shifley, an assistant attorney general who handled the case.
The nonprofit also advertised that it would partner with schools and other horse programs, when it didn't, she said.
Additionally, it falsely claimed that it checked up on horses after they were adopted from their shelter, Shifley said.
The nonprofit has agreed to place donations in segregated accounts and use the money for the purposes stated when soliciting the donations.
Diana Hefley: 425-339-3463; firstname.lastname@example.org.
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