The AI Enterprise Initiative: Bylaw Article 2

 ARTICLE II – POWERS & ACTIVITIES (FINANCIAL FIREWALL)

2.1 Legal Powers

Legal Core:The corporation shall have all powers granted under Massachusetts General Laws Chapter 180 and Section 501(c)(3) of the Internal Revenue Code, including the power to receive and administer funds, enter contracts, hire staff, and carry out charitable and educational activities. All powers shall be exercised exclusively in furtherance of the nonprofit’s mission, with no private inurement.For Citizens:We can run programs, hire people, accept money, and build projects—but only to serve the public. No one in charge can personally profit.AI’s Role:AI tracks all activities against the mission, flagging any contract, hire, or action that risks serving private gain.Why This Matters:This locks in the nonprofit’s legal legitimacy while stopping the bait-and-switch most “charities” pull—claiming public service but funneling benefits to insiders. It makes powers real, but always mission-bound.

2.2 Financial Integrity

Legal Core:The corporation shall enforce strict financial controls:

• No cash withdrawals exceeding $400 within 24 hours without dual officer approval.
• No aggregate withdrawals exceeding $5,000 in a calendar month without Board notice.
• No funds transferred to LLCs, shell entities, or unverified affiliates.
• All accounts shall be registered under the corporate name, with no hidden accounts.

For Citizens:No big withdrawals without checks. No sneaky transfers to shady companies. No secret bank accounts.AI’s Role:AI monitors all transactions in real time. If suspicious patterns appear (e.g., repeated $399 withdrawals), it auto-freezes funds and alerts members.Why This Matters:This prevents the classic fraud tricks: laundering through LLCs, draining accounts slowly, or hiding funds. It ensures that money moves only for public good, never corruption.

2.3 Audits & Oversight

Legal Core:The corporation shall undergo:

• Daily AI pre-check audits of transactions.
• Weekly AI risk summaries.
• Monthly AI public audit reports.
• Annual independent third-party audits filed with the Massachusetts Attorney General and IRS.

For Citizens:AI checks the money every day, sums it up weekly, reports monthly, and outside auditors check yearly. Everything’s on the record.AI’s Role:AI runs constant audits, publishes dashboards, and verifies that third-party auditors match AI’s findings. Discrepancies trigger automatic alerts.Why This Matters:Fraud thrives when audits are rare and hidden. Daily, weekly, monthly, and yearly audits mean no cracks for corruption to hide in. AI acts as the permanent watchdog.

2.4 Contracts & Affiliation

sLegal Core:All contracts and partnerships must:

• Be mission-aligned and transparent.
• Be published publicly within 48 hours of signing.
• Prohibit affiliates from altering bylaws.
• Forbid subsidiaries structured as LLCs, shell corporations, or for-profit pass-throughs.

For Citizens:Every deal we make has to serve the mission, gets posted publicly, and can’t be hidden in shady company setups.AI’s Role:AI scans contracts for risks (e.g., donor kickbacks, private perks), checks compliance with bylaws, and posts public summaries.Why This Matters:Most nonprofit corruption happens in contracts—hidden consulting fees, shell groups, fake “affiliates.” This firewall stops it cold. 

2.5 Spending Transparency

Legal Core:All expenditures shall be:

• Logged within 24 hours.
• Published publicly within 48 hours with amount, purpose, and beneficiary.
• Categorized into mission-based programs, administration, or compliance.  Failure to disclose within deadlines shall trigger immediate review and freeze of discretionary funds.

For Citizens:Every dollar we spend gets logged right away, posted within two days, and sorted into clear categories. If leaders don’t post it, spending stops until they do.AI’s Role:AI posts all spending data to a public ledger, flags missing entries, and freezes funds if deadlines are missed.Why This Matters:Corruption usually hides in delayed or vague expense reports. Real-time disclosure makes theft nearly impossible. Citizens can track every dollar.

2.6 Emergency Spending

Legal Core:In cases of declared emergency (natural disaster, urgent health need, imminent harm to beneficiaries), up to $5,000 may be spent without prior Board approval, provided:

• AI logs the expenditure as emergency within 12 hours.
• Leadership notifies the Board within 24 hours.
• Public disclosure occurs within 48 hours.  Spending above $5,000 requires two Board approvals and AI verification.

For Citizens:In emergencies, leaders can act fast but only with limits. Small urgent spending is allowed, but everything is logged and explained within two days.AI’s Role:AI tracks emergency spending separately, confirms deadlines for notification, and alerts if leaders try to misuse the “emergency” label.Why This Matters:Without this, corrupt boards can drain funds under fake “emergencies.” With AI and strict limits, speed is possible without opening a fraud loophole.

2.7 Fraud Triggers & Enforcement

Legal Core:Fraud triggers include:

• Repeated withdrawals just under approval thresholds.
• Contracts with known shell corporations or affiliates under investigation.
• Missing audit data.
• Unexplained delays in transparency postings.  Upon detection, AI shall freeze affected funds, notify the membership, and escalate to the Board and Attorney General if unresolved in 14 days.

For Citizens:If shady patterns show up, AI stops the money right away, tells everyone, and forces leaders to explain. If they stall, the Attorney General gets involved.AI’s Role:AI continuously scans for red flags, auto-freezes accounts, and generates fraud reports with evidence logs.Why This Matters:This is the “kill switch” against corruption. Fraud isn’t debated—it’s flagged, frozen, and exposed automatically.

2.8 Citizen Veto Power

Legal Core:Members holding at least 25% of voting rights may veto any spending, contract, or policy within 14 days of publication. Vetoes are binding unless overturned by 90% membership approval and 3-of-4 AI consensus.For Citizens:If enough of you disagree with a decision, you can stop it. Leaders can’t ignore you unless almost everyone and the AI all say it’s okay.AI’s Role:AI verifies signatures on veto petitions, tracks deadlines, and enforces freezes until resolution.Why This Matters:Citizens aren’t just spectators—they’re governors. This prevents capture by elites, because the community can override bad leadership directly.

✅ With this, Article II is airtight:

• Hard financial caps (2.2, 2.6)
• Multi-layer audits (2.3)
• Fraud kill-switch (2.7)
• Citizen veto (2.8)