Could Baton Rouge Crime Stoppers use court-derived funds for legal fees or directors’ insurance?

Plain-English summary

Baton Rouge Crime Stoppers asked whether it could spend money received from the courts on attorney fees or directors and officers liability insurance. In 2006, the Attorney General said the answer depended on how those costs related to the organization’s crime-information work. Article 895.4 restricted court-derived money to rewards, a tip hotline, and other purposes directly related to obtaining information on criminal activities.

The AG left the factual connection to Crime Stoppers, presumably its board. If the board found the legal or insurance expense directly related to obtaining crime information, the court-derived funds could pay it; if not, those funds could not. The opinion distinguished donations and other money received outside Article 895.4, which the statute allowed the organization to spend for any lawful purpose.

Currency note

This opinion was issued in 2006. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Could court-derived Crime Stoppers money buy directors’ insurance?

Only if the organization determined the premium was directly related to obtaining information on criminal activities. The AG did not decide that factual question itself.

Were attorney fees automatically an approved use of those funds?

No. The same direct-relationship test applied to legal fees.

Could the organization use donations for those expenses?

The AG said funds from other sources, including donations, could be used for any lawful purpose under the statute.

Background and statutory framework

Article 895.4(L) limited money received by a certified Crime Stoppers organization under that article. Article 895.4(M) treated funds from other sources differently. The opinion applied those separate rules to litigation expenses and insurance, leaving the direct-relationship finding to the organization.

Citations

• La. C.Cr.P Article 895.4 (court-derived funds and other-source funds).

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/05-0380

Original opinion text

April 25, 2006
OPINION NUMBER 05-0380

90-A-1 PUBLIC FUNDS & CONTRACTS
La. C.Cr.P Article 895.4
Mr. Sid Newman
Executive Director
Discussion of the permissible uses of funds
received by Baton Rouge Crime Stoppers, Inc.
Baton Rouge Crime Stoppers, Inc.
pursuant to La. C.Cr.P. Article 895.4.
440 Third Street c/o 2nd Floor
Baton Rouge, Louisiana 70802

Dear Mr. Newman:

You requested an Attorney General’s opinion regarding the use of funds received by Baton Rouge Crime Stoppers, Inc. (“Crime Stoppers”). You advise that individuals who make day to day decisions for non-profit entities face the potential for personal liability exposure in the event of litigation involving their decisions, as do the entities themselves. Even if the claims are ultimately proved unwarranted, the cost of defending against lawsuits can be devastating. You indicated that Crime Stoppers receives funds from the courts pursuant to La. C.Cr.P Art. 895.4. You question whether Crime Stoppers may use such funds to pay attorney’s fees and/or to purchase Non-Profit Directors and Officers Liability Insurance.

La. C.Cr.P Art. 895.4 sets forth the permissible uses of funds received by Crime Stoppers pursuant to the Article, and provides in pertinent part as follows:

L. All funds received by a certified crime stoppers organization under this Article shall be used solely for the purposes of paying rewards to individuals who provide information on criminal activity to the certified crime stoppers organization, for the operation of a hot line used for receiving that information, and for other purposes which are directly related to obtaining information on criminal activities.

In order for Crime Stoppers to use these funds to pay attorney’s fees and/or to pay for insurance, the payment of attorney’s fees or insurance premiums must be “directly related to obtaining information of criminal activities.” This is a factual determination that must be made by Crime Stoppers (presumably by the Board of Directors). If the Board of Directors determines that the payment of attorney’s fees or insurance premiums are directly related to obtaining information on criminal activities, then the payment of such costs would be permissible under Art. 895.4.

Page 2

Mr. Sid Newman
OPINION NUMBER 05-0380
-2-

If the Board determines that payment of such costs is not directly related to obtaining information on criminal activities, Crime Stoppers may not use funds received pursuant to Art. 895.4 to pay such costs. However, Crime Stoppers could still use funds received from other sources to pay attorney’s fees and insurance premiums under Art. 895.4(M), which provides:

M. All funds received by a certified crime stoppers organization from sources other than this Article, including donations to the organization, may be expended for any lawful purpose, including the purposes set forth in Paragraph L above.

Trusting this adequately responds to your request, we remain

Yours very truly,

CHARLES C. FOTI, JR.
ATTORNEY GENERAL

BY: _________
KENNETH L. ROCHE, III
Assistant Attorney General

CCF, JR/KLR, III/jv

Page 3

OPINION NUMBER 05-0380

90-A-1 PUBLIC FUNDS & CONTRACTS
La. C.Cr.P Article 895.4

Discussion of the permissible uses of funds received by Baton Rouge Crime Stoppers, Inc. pursuant to La. C.Cr.P. Article 895.4.

Mr. Sid Newman
Executive Director
Baton Rouge Crime Stoppers, Inc.
440 Third Street c/o 2nd Floor
Baton Rouge, Louisiana 70802

Date Received:
Date Released: April 25, 2006

KENNETH L. ROCHE, III
ASSISTANT ATTORNEY GENERAL