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Michelle Knuttila, the founder of the nonprofit HiCaliber Horse Rescue, spent thousands of donor dollars intended for rescuing and rehabilitating horses on late-night fast-food and bar tabs, mobile phone spy technology, Weight Watchers and other purchases from October 2013 to March 2015, according to financial documents provided to inewsource.
The money came out of one of HiCaliber’s PayPal accounts, an online payment system the Valley Center nonprofit used to solicit donations from around the U.S. and other countries.
Charities like HiCaliber must use all of their funds “in furtherance of its charitable purpose,” said nonprofit attorney Paul Dostart. Some of Knuttila’s purchases, such as restaurants and bars, may be legitimate, Dostart said.
But, he said, “If I were the attorney general or IRS … my first question is: How did this late night fast-food and bar tab relate to carrying out the company’s business?”
inewsource obtained HiCaliber’s PayPal transactions from San Diego County under a public records request. The data covered a nearly 18-month period and showed donor names and emails, vendor information, and account balances. The county said it forwarded the records to the District Attorney’s Office shortly after receiving them.
A spokesman for interim District Attorney Summer Stephan declined to comment or confirm an investigation of HiCaliber.
The Valley Center horse rescue is embroiled in allegations of fraud and animal abuse. Critics allege the nonprofit’s funds are being used for Knuttila’s personal expenses, and horses are being excessively euthanized without a veterinarian’s involvement. At least 10 local and state agencies are involved in investigating the nonprofit.
The Attorney General’s Office has prohibited HiCaliber from engaging “in any activity for which registration is required, including solicitation or disbursing of charitable assets” until it submits its 2016 financials to the state. The horse rescue’s PayPal account also is currently frozen.
Knuttila did not respond to an inewsource request for comment, but on March 2, inewsource interviewed her at the HiCaliber ranch. She was asked: “Are you, or have you ever, misused donor funds for your own personal gain or enrichment?”
“No,” Knuttila said.
”Not a dollar?” a reporter asked.
“No. No,” she said.
Detailed transactions
The PayPal records detail transaction dates, times, methods of payment and account balances; addresses and names of vendors; and identifiable donor information, including donation amounts. Most of the expenditures appear to be for items such as hay, veterinary bills and purchasing horses. In all, according to the records, HiCaliber spent more than $90,000.
The records show trips to sushi spots and Starbucks in Escondido, four months of payments to Weight Watchers International, purchases at Barnes & Noble and a payment to SMS SPY, a company that specializes in mobile phone spy technology.
“To be eavesdropping on people’s telephone conversations, there are a multitude of criminal statutes that deal with that,” Dostart said. “Holy cow, that’s bad.”
More than $1,600 in cash also was withdrawn from ATMs, including one on El Cajon Boulevard in San Diego on a Thursday morning in October 2014.
Though Knuttila did not respond to email and phone requests for comment from inewsource, she did go on Facebook Live Thursday to address this story and its findings. She said the spyware was installed on her own computer to catch a board member stealing documents; that she mistakenly used the company debit card for Weight Watchers payments but reimbursed the organization afterward; and that restaurant charges were for taking out volunteers for appreciation.
Knuttila added that “the paper trail is solid” and explains the reimbursements.
“I have no fear whatsoever with any of the allegations being made. I’m not going to make an apology for taking volunteers to dinner. I’m not going to make an apology for taking another organization out for drinks to ask what works for you.”
HiCaliber has a strong social media presence and raises money through Facebook donations, PayPal, Venmo, sales of merchandise and a variety of other avenues both online and in-person.
Local and state agencies investigating HiCaliber include the California Veterinary Medical Board and Attorney General’s Office, the San Diego County District Attorney’s Office, the Inland Valley Humane Society and the Ontario Police Department.
In addition, three former board members told inewsource they never saw HiCaliber’s financials during their tenure. One submitted a complaint to the Internal Revenue Service. Another, a veterinarian, is working with the California Veterinary Medical Board in its investigation.
The Society for the Prevention of Cruelty to Animals Los Angeles visited HiCaliber on Jan. 2 and “closed their case after finding no evidence of animal cruelty or neglect,” according to emails obtained under the state’s public records law.
HiCaliber is bringing in more horses each week while at the same time trying to obtain a county permit that requires 100 or fewer horses on the property.
The county has observed that HiCaliber is “not taking steps to reduce the number of animals,” according to emails.
NOTE: This story was updated at 4:30 p.m. on March 15, 2018, with comments from Michelle Knuttila about the PayPal expenditures.
More in the series…
“HiCaliber volunteers say disease outbreak at Valley Center ranch not disclosed”
March 8, 2018
“Former board member and veterinarian details problems with finances, medical practices at HiCaliber Horse Rescue”
March 6, 2018
“Former HiCaliber board members distance themselves from horse rescue’s financials”
March 5, 2018
“Attorney General’s Office halts HiCaliber’s fundraising, spending for failing to file tax docs”
March 5, 2018
“Strong reaction to inewsource report on HiCaliber Horse Rescue”
March 3, 2018
“HiCaliber Horse Rescue ensnared in allegations of animal cruelty, fraud”
Feb. 28, 2018
We’ll let you know when big things happen.
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Editorial Standards Page
- Our Mission
- Ethics Policy
- Diversity
- Ownership Structure, Funding and Grants
- Financial Documents
- Fact-checking and Verification Standards
- Unnamed Sources
- Corrections and Clarifications
- Actionable Feedback and Newsroom Contacts
- Masthead
- Privacy Policy
Our Mission
inewsource is a nonprofit, nonpartisan newsroom dedicated to improving lives in the San Diego region and beyond through impactful, data-based investigative and accountability journalism.
Our Vision
Betrayals of the public trust are revealed and rectified, wrongdoing is deterred, and inequities are illuminated thanks to inewsource’s deep, dogged, fact-based reporting.
Our Values
Truth: Above all else, we value the importance of a free and credible press. Truth is the cornerstone of democracy and the core value for inewsource.
Transparency: We build trust with our readers by adhering to the highest standards and ethics, and to reporting with facts, precision and context.
Collaboration: Our newsroom prioritizes collaboration over competition. We regularly partner with media outlets on reporting projects and to share content.
Community: Our reporting serves the San Diego region, and we strive to build relationships with our audience by getting out into the community to listen and engage.
Ethics Policy
inewsource will conduct its business with the highest standards of decency, fairness and accuracy. These standards shall apply equally to inewsource employees, freelancers and all others engaged in gathering information on behalf of inewsource. All receive a copy of these ethical standards.
In the course of our reporting, we will consistently:
● Identify our organization and ourselves fully and avoid false representations of any kind to any source.
● Notify all sources before electronically recording any interview or conversation except in extraordinary cases authorized by the Managing Editor and Editor. If a source refuses to be taped, that must be honored; no recordings are to be made without consent.
● Respect the individual’s right to privacy. inewsource will never manipulate or barter private, personal, health, financial or other extraneous information in the course of preparing its reports.
● Any source we describe or write about in any significant manner must be contacted. The employee should document all efforts to contact the source, and if unsuccessful, should summarize these efforts at contact in the body of his/her writing.
In addition, inewsource follows the Code of Ethics of the Society of Professional Journalists. The latest version, revised in 2014, can be found here.
Editorial Independence Policy
We subscribe to standards of editorial independence adopted by the Institute for Nonprofit News (INN) as follows:
Our organization retains full authority over editorial content to protect the best journalistic and business interests of our organization. We will maintain a firewall between news coverage decisions and sources of all revenue. Acceptance of financial support does not constitute implied or actual endorsement of donors or their products, services or opinions.
We accept gifts, grants and sponsorships from individuals and organizations for the general support of our activities, but our news judgments are made independently and not on the basis of donor support. Our organization also may consider donations to support the coverage of particular topics, but our organization maintains editorial control of the coverage. We will cede no right of review or influence of editorial content, nor of unauthorized distribution of editorial content.
Our organization will make public all donors who give a total of $1,000 or more. We will accept anonymous donations for general support only if it is clear that sufficient safeguards have been put into place that the expenditure of that donation is made independently by our organization and in compliance with INN’s Membership Standards.
Diversity
Diverse Voices
Inclusiveness is at the heart of thinking and acting as journalists, and it supports the educational mandate of inewsource. Race, class, generation, gender, sexual orientation, ability, and geography all affect point of view. inewsource believes that reflecting societal differences in reporting leads to better, more nuanced stories and a better-informed community.
inewsource is committed to employment equity and diversity.
Diverse Staffing Report
Below is a breakdown of staffing data at inewsource. We determine the composition of our staff by asking them to self-identify. It is based on a newsroom of 11 and a total staff of 15 as of August 2020. Percentages are based on 15 total survey responses. The numbers include full-time and part-time staff, full-time fellows and full-time and part-time interns.
| All Staff Percentages are based on 15 total survey responses. The numbers include full-time and part-time staff, full-time fellows and full-time and part-time interns. | Newsroom Percentages are based on 15 completed survey responses to this question. | Business Percentages are based on 15 completed survey responses to this question. | |||
| Yes – work on newsroom side | 73% | Yes – work on newsroom side | 73% | ||
| No – do not work on newsroom side | 27% | No – do not work on newsroom side | 27% | ||
| Total staff | 100% | Total staff | 100% | ||
| Gender Identity | Gender Identity | Gender Identity | |||
| Women | 80% | Women | 82% | Women | 75% |
| Men | 20% | Men | 18% | Men | 25% |
| Sexual Orientation | Sexual Orientation | Sexual Orientation | |||
| Straight | 87% | Straight | 82% | Straight | 100% |
| LGBTQ-identifying | 7% | LGBTQ-identifying | 7% | ||
| Not specified | 7% | Not specified | 7% | ||
| Speak a language beyond English at home | 33% | Speak a language beyond English at home | 18% | Speak a language beyond English at home | 75% |
| Race/Ethnicity | Race/Ethnicity | Race/Ethnicity | |||
| White | 67% | White | 73% | White | 50% |
| Hispanic or Latinx | 20% | Two or more races | 18% | Hispanic or Latinx | 50% |
| Two or more races | 13% | Hispanic or Latinx | 9% | ||
| Age | Age | Age | |||
| 20-29 | 40% | 20-29 | 45% | 20-29 | 25% |
| 30-39 | 47% | 30-39 | 45% | 30-39 | 50% |
| 60 or older | 13% | 60 or older | 9% | 60 or older | 25% |
* The percentages in the charts have been rounded and may not add up to 100.
Ownership Structure, Funding and Grants
inewsource is a nonprofit organization, whose legal name is Investigative Newsource. It does business as inewsource. The business was incorporated on Aug. 4, 2009 in the state of California. Tax-exempt status as a 501c3 was granted by the IRS on Sept. 15, 2010. inewsource is funded primarily by individual contributions and foundation grants. We are guided by a board of directors.
Editorial independence: Journalists employed by inewsource take no editorial direction from donors whose contributions may support the organization. inewsource will not hesitate to report on its donors when events warrant. Our Editorial Independence Policy details the firewall between journalism and revenue.
To be transparent with the public, inewsource lists its donors on its website. In cases where a donor is the subject of an inewsource story, additional disclosure will be made.
Financial Documents
We do our due diligence to earn your trust in our reporting, as well as in our governance and financial sustainability. All of our financial documents are made available to view so that our supporters can trust we are sound stewards of your philanthropy. Review our IRS Form 990s, audited financial statements and annual reports:
Tax Returns
Financial Statements
Annual Reports
Fact-checking and Verification Standards
Transparency is one of our core values. Today, there is a need to build trust with our audience because new media and ways of communicating spread lies and slanted news faster than “real” news. At the same time, this era of new technologies makes it easier than ever for news organizations to be transparent. People don’t just have to believe us, they can investigate our investigations with our source materials.
Transparency is key to building credibility.
inewsource reporters have primary responsibility for reporting, writing, and fact-checking their stories. But before a story is published, the reporter reviews all facts and sources with an editor or another reporter. Facts must be traced to a primary source.
In addition, we “transparify” certain investigative stories. This process involves publishing a version of the web story with hyperlinks to all the story’s facts. This is proof that all facts have been documented with primary evidence. We do this to build trust with our readers and to be as transparent as we hope the public figures and institutions that we hold accountable will be.
Unnamed Sources
Not all sources are created equal. Some sources cannot speak authoritatively, provide proper analysis or speak specifically to every inquiry placed before them. To maintain the integrity of our reporting, inewsource reporters must select sources who can speak with validity to the topic at hand, and avoid presenting unqualified or underqualified sources as experts.
If an interviewed source has a conflict of interest, or whose qualifications may be tangential or limited, reporters will note that within the context of the story.
It is incumbent upon reporters to fully background their sources to uncover conflicts of interest or slant prior to using them in a story.
Unless discussed prior to an interview, all subjects talking to inewsource journalists are on the record. Specifically, the source is identified by name and title, and their exact or paraphrased words are attributed to them for publication. If journalists speak with sources who are not politicians, public figures or those not commonly interviewed by journalists, staff should explain clearly that information discussed will be on the record and for publication.
There are times, however, when information may be critical for a story but cannot be found or verified by other means. For example, a source may be able to confirm specific information about a series of events they may have witnessed, but have legitimate concerns about using their name or title. The repercussions to the source could be legal, job-related retribution or personal safety. The source and journalist must discuss these potential dangers and terms of use should be agreed upon by both parties.
If inewsource publishes information from an anonymous source, inewsource will explain to readers, in as much detail as possible, why we agreed to anonymity.
Corrections and Clarifications
inewsource strives for accuracy in everything we do, which is why we are committed to fact checking our content. But sometimes we make errors. When that happens, we correct them. We also clarify stories when something we’ve written is confusing or could be misinterpreted.
We endeavor to always be transparent about our commitment to correcting errors and clarifying misperceptions. When staffers see, hear or read about a possible issue with the accuracy of any inewsource content, they are expected to bring it to the attention of an editor and the web producer so it can be evaluated to determine how to proceed.
Including the web producer is key because inewsource is a multimedia news organization and shares its content with multiple partners on multiple platforms. The web producer must alert these partners about corrections and clarifications.
Corrections and clarifications should be included at the bottom of stories and dated.
Actionable Feedback and Newsroom Contacts
Our audiences know the region we cover and have a stake in maintaining and improving the quality of life in San Diego and Imperial counties. We know your knowledge and insights can help shape what we cover and how we cover it. We invite your comments and complaints on news stories, suggestions for issues to cover or sources to consult. We rely on you to tell us when we get it right and when we need to keep pushing.
Your comments, questions and suggestions can be sent to the team as a whole at contact@inewsource.org or you can contact a specific member of our staff.
Masthead
CEO, Editor and Founder: Lorie Hearn, loriehearn@inewsource.org
Lorie Hearn is the chief executive officer, editor and founder of inewsource. She founded inewsource in the summer of 2009, following a successful reporting and editing career in newspapers. She retired from The San Diego Union-Tribune, where she had been a reporter, Metro Editor and finally the senior editor for Metro and Watchdog Journalism. In addition to department oversight, Hearn personally managed a four-person watchdog team, composed of two data specialists and two investigative reporters. Hearn was a Nieman Foundation fellow at Harvard University in 1994-95. She focused on juvenile justice and drug control policy, a natural course to follow her years as a courts and legal affairs reporter at the San Diego Union and then the Union-Tribune.
Hearn became Metro Editor in 1999 and oversaw regional and city news coverage, which included the city of San Diego’s financial debacle and near bankruptcy. Reporters and editors on Metro during her tenure were part of the Pulitzer Prize-winning stories that exposed Congressman Randy “Duke” Cunningham and led to his imprisonment.
Hearn began her journalism career as a reporter for the Bucks County Courier Times, a small daily outside of Philadelphia, shortly after graduating from the University of Delaware. During the decades following, she moved through countless beats at five newspapers on both coasts.
High-profile coverage included the historic state Supreme Court election in 1986, when three sitting justices were ousted from the bench, and the 1992 execution of Robert Alton Harris. That gas chamber execution was the first time the death penalty was carried out in California in 25 years.
In her nine years as Metro Editor at the Union-Tribune, Hearn made watchdog reporting a priority. Her reporters produced award-winning investigations covering large and small local governments. The depth and breadth of their public service work was most evident in coverage of the wildfires of 2003 and then 2007, when more than half a million people were evacuated from their homes.
Managing Editor: Laura Wingard, laurawingard@inewsource.org
Laura Wingard is the managing editor at inewsource. She has been an editor in San Diego since 2002, working at The San Diego Union-Tribune, KPBS and now inewsource. At the Union-Tribune, she served in a variety of roles including as enterprise editor, government editor, public safety and legal affairs editor, and metro editor. She directed the newspaper’s award-winning coverage of the October 2007 wildfires and the 2010 disappearance of Poway teenager Chelsea King. She also oversaw reporting on San Diego’s pension crisis.
For two years, Wingard was news and digital editor at KPBS, overseeing a team of four multimedia reporters and two web producers. She also was the KPBS liaison with inewsource and collaborated with inewsource chief executive officer and editor Lorie Hearn on investigative work by both news organizations.
Wingard also worked at the Las Vegas Review-Journal as the city editor and as an award-winning reporter covering the environment and politics. She also was the assistant managing editor for metro at The Press-Enterprise in Riverside. She earned her bachelor’s degree at California State University, Fullerton, with a double major in communications/journalism and political science.
Assistant Editor and Senior Reporter: Brad Racino, bradracino@inewsource.org
Brad Racino is the assistant editor and a senior reporter at inewsource. He has produced investigations for print, radio and TV on topics including political corruption, transportation, health, maritime, education and nonprofits.
His cross-platform reporting for inewsource has earned more than 50 awards since 2012, including back-to-back national medals from Investigative Reporters and Editors, two national Edward R. Murrow awards, a Meyer “Mike” Berger award from New York City’s Columbia Journalism School, the Sol Price Award for Responsible Journalism, San Diego SPJ’s First Amendment Award, and a national Emmy nomination.
In 2017, Racino was selected by the Institute for Nonprofit News as one of 10 “Emerging Leaders” in U.S. nonprofit journalism.
Racino has worked as a reporter and database analyst for News21; as a photographer, videographer and reporter for the Columbia Missourian; as a project coordinator for the National Freedom of Information Coalition and as a videographer and editor for Verizon Fios1 TV in New York. He received his master’s degree in journalism from the University of Missouri in 2012.
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By using the Site or Services you consent to this Privacy Policy.
Log Data
Like many site operators, we collect information that your browser sends whenever you visit our site (“Log Data”).
This Log Data may include information such as your computer’s Internet Protocol (“IP”) address, browser type, browser version, the pages of our site that you visit, the time and date of your visit, the time spent on those pages and other statistics.
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Like many sites, we use “cookies” to collect information. You can instruct your browser to refuse all cookies or to indicate when a cookie is being sent. However, if you do not accept cookies, you may not be able to use some portions of our site.
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Additionally, we may use third party services — such as those that provide social media conveniences, measure traffic, send newsletters and facilitate donations — that may place cookies on your computer. We don’t have any way of knowing how such services handle the resulting data internally. inewsource makes no claim, nor takes liability for the insecure submission of information via these applications.
Here are the services whose cookies you can find on inewsource.org:
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Personal Data
We only collect personally identifiable information such as your name and email address when you sign up for a newsletter, donate to our organization, or otherwise submit it to us voluntarily. We do not share your personal data with any third parties other than some common service providers, whose products use your information to help us improve our site, deliver newsletters, or allow us to offer donation opportunities.
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If there are any questions regarding this privacy policy, please contact us at contact@inewsource.org or call us at 619-594-5100.
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