Rick Cohen

Congressional use of charities to bypass lobbying reform

Lobbying reform of a sort passed the Senate last week, described as "a measured response" by Senator Dodd and an effort "to do a better job of retaining (public) trust and confidence" by Senator Frist. Even as an enfeebled stab at lobbying reform, a far cry from the initial wave of post-Abramoff outrage, this bill completely overlooked the problem of purported charities established, controlled, or highly influenced by members of Congress and their functions to circumvent campaign finance and lobbying regulations.

Following on the heels of the remnants of lobbying reform, the epicenter for the misuse and abuse of charities and foundations by members of Congress, Tom DeLay, announced his decision not to seek reelection, although motivated by his sinking reelection prospects, not his links to nonprofit and lobbying scandals. Tom DeLay's nonprofit world encompasses a multiplicity of current and pending felons: former deputy chief of staff Tony Rudy, who just pled guilty to conspiring with Jack Abramoff, a plea that included links to Abramoff's misuse of charity money for a golfing trip to Scotland for "representative no. 1", who we all now know was Ohio Congressman Bob Ney; former chief of staff and one of DeLay's spiritual advisors, Ed Buckham, who along with his wife took 1/3 of the $3 million raised by the nonprofit U.S. Family Network he established and ran (largely financed by contributions from Abramoff's lobbying clients, and making payments not only to Buckham's wife, but to Rudy's too) , and Michael Scanlon, DeLay's former communications chief, who established and ran a bogus think tank called the American International Center staffed by two of Scanlon's boyhood pals, one a lifeguard, the other a yoga instructor, established as a front for laundering Abramoff client contributions.

Nearly every day there has been a revelation about a new purported charity or foundation established by or controlled by a member of Congress, in addition to DeLay's own eponymous foundation, ostensibly established by the former House Majority Leader and his wife to create a home for foster children, but known for its lavish "Fantasy Island" golf fundraisers involving members of Congress, lobbyists, and special interests operating without public disclosure. Among the leading foundations and charities linked to members of Congress are:
*the Ted Stevens Foundation, operated by the Senate's Appropriations Committee chairperson which attracts donations from a number of special interests with major business interests in front of that all-powerful committee;
*Senator Bill Frist's World of Hope fundraiser for AIDS charities that happened to attract a number of powerful pharmaceutical company contributors;
*and most recently, Rick Santorum's Operation Good Neighbor Foundation, with contributors including the bank that gave the senator a remarkably below market mortgage for his Virginia home, and managing to spend 60% of its charitable intake not on grants and programs, but on staff engaged in operations, and fundraising, not grantmaking--staff including Santorum campaign aides.

What could be wrong about a little Congressional star power for fundraising purposes if it's Bill Frist raising money for AIDS programs or Tom DeLay building a complex for foster children? What could be wrong with a charitable grant dispersion by Rick Santorum for community groups in Pennsylvania or Ted Stevens helping out some Alaskan nonprofits? Plenty, and the rapidly shrinking lobbying reform movement is unlikely to get at these scams and shakedowns, despite the quiet introduction and quick dismissal of an amendment by Senator Max Baucus calling for disclosure of donors to these foundations.

Special interests get to make contributions to members' charities and signal support and allegiance. In some cases, special interest donors get to buy invaluable buy influence and face time with legislators though their ostensibly "charitable" contributions, and because the charities are 501(c)(3) "public" charities, the names of donors and their donation amounts are not disclosed to the public. Legislators get to use their charities as places of employment for their campaign staff between elections, and sometimes as places of employment for family members as well. Legislators get to be seen handing out checks to needy nonprofits, certainly welcome photo-ops and more for House and Senate members facing tough reelection challenges, say like in the Pennsylvania Senate campaign. And they even get to use the distributions from their charities to thank political supporters, as in the DeLay Foundation's selection of Perry Homes to build the foster families units, Perry known not only for his construction company (Perry Homes), but for his financing of the Swift Boat Veterans for Truth 527 during the 2004 presidential campaign.

Irony of ironies, Santorum somehow ended up as co-sponsor of the Baucus amendment to expose these charity shams as though his own shenanigans with the Operation Good Neighbor Foundation had never seen the light of day. That's a story for another blog entry, and you've got to see who was contributing to that political "foundation".

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Posted at 3:25 PM, Apr 04, 2006 in Government Accountability
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