Rick Cohen

Rick Santorum’s Unusual Foundation: Part II

The notion of charitable fundraising and grantmaking attracts lots of people to new nonprofit organizations, even those founded by Senator Rick Santorum of Pennsylvania. On the board of advisors of the Operation Good Neighbor Foundation, a charity that has received much critical attention in recent weeks, you'll find some well-known people with generally positive if not respected reputations. For example, former Philadelphia Mayor W. Wilson Goode is on the board, cited as a director of the AMACHI program, a faith-oriented mentoring program devised by the former head of President Bush's faith-based program, John DiIulio. Bill Strickland of the well known Manchester Bidwell Corporation, provides Operation Good Neighbor Foundation a nonprofit leader widely seen by liberals and conservatives as effective and innovative.

But as Part I of Rick Santorum's Unusual Foundation described on this blog, a Senator's or Congressman's nonprofit charity frequently serves functions which may be less than fully charitable, though, under current laws and regs, not expressly illegal. And it attracts donors and advisors whose interests may be as much geared to hobnobbing with legislators, getting the kind of invaluable personal "face-time" that lobbyists compete for, as to expressing some sort of charitable purpose.

Santorum's foundation has its share of lobbyists on the board of directors and the board of "advisors" and evidence of some corporate grant sources that have been covered in the mainstream press, including a $10,000 donation from the bank that provided Santorum with a highly attractive mortgage that by all appearances he wouldn't have otherwise qualified for. The largest donor to the Santorum foundation happened to be a developer in successful pursuit of federal subsidies for a riverfront real estate development project.

Anything wrong with this? Nothing except that despite Santorum's assertions to Imus that he isn't really involved in the foundation except for check-presentations and photos, it's hard to believe that the calculus of these high end corporate, banking, and real estate donors didn't include access and favor with the senator himself. How else to explain the fact that the first corporation to weigh in with a sizable grant to the Operation Good Neighbor Foundation some years ago was Microsoft, picking the then unknown foundation because of its track record and program or because of its Santorum connection? A Common Cause report suggested it was clearly the latter, part of the "Microsoft playbook" for purchasing favor with members of Congress, especially as it faced federal anti-trust litigation.

One wonders how the presence of the CEO of American Business Financial Services in a leadership role on the foundation's advisory board comports with the notion of being a "good neighbor". ABFS was repeatedly brought to court by the U.S. Attorney for the Eastern District of Pennsylvania on predatory lending charges. ABFS finally acceded to a forbearance agreement in which it had to cease its violations and make payments to HUD-approved housing counseling organizations. Subsequently, acknowledging that it was hard to make money on ABFS's business model given the proliferation of anti-predatory lending laws and associated lawsuits ABFS faced, the company declared bankruptcy, quickly evolving from chapter 11 bankruptcy to chapter 7 liquidation. Also caught in the bargain was the $19.6 million in public economic development incentives that ABFS scored to move 700 jobs into downtown Philadelphia and increase that total by 320 new ones, an assertion that Philadelphia officials claimed ABFS had reached when the facts were to the contrary.

Predatory lending isn't being a good neighbor in anyone's book. The access-hungry lobbyists and corporations hanging around Santorum's foundation don't convey much of a sense of charity and philanthropy either. What the Santorum Foundation, like the DeLay Foundation for Kids, the Ted Stevens Foundation, Bill Frist's World of Hope, Jack Abramoff's Capital Athletic Foundation, and others show is how easy it is for politicians and some donors to misuse and abuse the 501(c)(3) nonprofit organizational form. Santorum's Operation Good Neighbor Foundation is an archetype of the problem, a holding pen for campaign staff, a medium for lobbyists and corporate interests to send signals of support for the legislator, a venue for special interests to buy relatively anonymous access and face-time with lawmakers, and instruments for members of Congress themselves to either help their friends with extra income or show themselves as philanthropic benefactors as they face reelection challenges.

This is a public policy problem that has escaped the lobbying reform efforts of the past few months and needs to be addressed.

Rick Cohen: Author Bio | Other Posts
Posted at 7:28 PM, Apr 09, 2006 in Government Accountability | Santorum
Permalink | Email to Friend