Rick Cohen

Cheney, Bush, Katrina, and Charitable Giving

You have got to give it to the current administration for playing all the angles like professional pool players. Both President Bush and VIce President Cheney demonstrated their charitable inclinations in the 2005 tax year by making donations to a variety of charities, the veep donating an amazing $6.87 milliion out of a total family income between Dick and Lynne of $8.82 million (including her book royalties and his stock options).

The angle in this instance? The Cheneys took advantage of an unusual, one-time charitable giving incentive included in the Katrina Emergency Tax Relief Act (KETRA). Usually a taxpayer can deduct up to one half of his or her adjusted gross income (AGI) in charitable deductions. But ostensibly to spur donations for Katrina relief, perhaps because the Bush Administration was dilly-dallying so long with its own spending commitments in response to Katrina and last fall's other devastating hurricanes, KETRA allowed for unlimited charitable gifts made after August 28, 2005.

The catch? There was no requirement that the charitable donations had to go for Katrina-related charities, and the Cheneys' post-August donations of $2.5 million had no connection to Katrina. The point of the Katrina charitable giving incentive was to spur donations to help nonprofits meet the immense needs and demands they faced after Hurricane Katrina (and Rita and Wilma as well). While the federal government fumbled and bumbled its response to the victims of Katrina, nonprofits were out on the front lines delivering on their own functions and frequently finding themselves compelled to take the place of the federal government's Homeland Security response team.

Even George and Laura Bush got the point. The Bush family's charitable gifts for tax year 2005, a comparatively paltry $76,000 in contrast to the Cheneys' millions, included charitable recipients such as the American Red Cross, the Salvation Army, Catholic Charities of the Archdiocese of New Orleans, and the Mississippi Food Network. Not quite as tone deaf as the veep's Katrina-unrelated contributions.

In all fairness, the Cheneys weren't the only taxpayers to use this charitable giving loophole for purposes that didn't quite connect to Hurricane Katrina relief and reconstruction. One of the most controversial post-Katrina charitable donations was the $165 million that billionaire T. Boone Pickens gave to the golf program at his alma mater, Oklahoma State University, also reportedly qualifying for the Katrina charitable giving incentive. Pickens added a little spice to this concoction by getting the OSU golf program to invest the money, within minutes of its donation, in Pickens' own hedge fund.

KETRA is just one of the bevy of tax cuts and dodges that have been enacted under the Bush Administration allowing the superwealthy like Cheney and Pickens to keep more of their millions and billions out of the hands of government. In this case, the tax dodge came with the camouflage of helping the poor and dispossessed affected by the devastating hurricanes. It's easy to find any number of colleges and universities, in fact, pitching the Katrina charitable giving incentive to their alums and donors, New York University's fundraising letter serving as a good example. No Katrina benefit there, to be sure.

But you would have thought that the VP would have made an effort to target his post-August charitable giving to Katrina-related causes, if only because the Bush Administration had to rely on the performance of charities to provide relief in the wake of FEMA's stunning performance throughout the Gulf Coast region. Vice President Cheney? Tone deaf certainly, wrong-headed on tax and charity policy too.

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Posted at 10:34 PM, Apr 18, 2006 in Government Accountability
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