posted on: Tuesday, January 31, 2006

Just ask the Fairbanks Daily News-Miner, which earlier this month reported on LOVE Social Services Center, which provides services to disadvantaged youth in Fairbanks, AK. Federal agents from the US Departments of Justice and Housing and Urban Development, along with agents from the FBI and IRS, searched LOVE’s headquarters, a church related to the organization, and the home of its executive director earlier this month. The organization is accused of misusing federal funds, including the possibility that LOVE used public grant dollars—intended to provide social services—to help buy and renovate a new facility for the church.

The executive director is Chris Hayes, whose husband Jim is the former mayor of Fairbanks and is the pastor at the church affiliated with the group. LOVE has received nearly $3 million in federal grants—thanks to Senator Stevens, the senior Republican Senator from Alaska who previously chaired the all-powerful Senate Appropriations Committee—since it was established in 2000. There are several personal connections between the Hayes Family and Stevens, including the fact that James Hayes—the son of Chris and Jim—worked as an aide to Stevens and lived at his Washington, DC house for a time.

Stevens has denied that his personal connections to the family had anything to do with helping secure grants for LOVE. It actually had to do with the good Senator’s concern for minorities—and it’s really best to just let his words do the talking; no interpretation on our end is necessary:

"That is not a personal thing, [LOVE is] part of the black community and I've worked for the black community in Fairbanks for a long time. I've always had a couple members of the black community of Alaska on my staff because I think, you know, they're a significant part of our state."

Well said, Senator, well said.

posted on: Monday, January 23, 2006

It’s hard to believe that anyone stumbling into the NCRP blog hasn’t heard the basics of Jack Abramoff’s network of corruption. Some brief exploration of articles written about Abramoff by NCRP staff in issues of Responsive Philanthropy, the Nonprofit Quarterly, the online Philanthropy Journal, and shortly the Chronicle of Philanthropy—and earlier entries in the NCRP blog itself--provides the basics on lobbyist Abramoff’s misuse of his personal foundation, the Capital Athletic Foundation, in his corrupt schemes.

No matter how much we write about the Capital Athletic Foundation, Abramoff’s particular uses of philanthropy raise some relatively unanswered questions that we pose here (in no particular order of priority):

1. Who or what is IIA and why did IIA contribute $500,000 to the Capital Athletic Foundation in 2003? Whether they were given the straight story or a bunch of lies, just about every donor had a motivation for making major donations to Abramoff’s foundation, few of them related to the Foundation’s mission of promoting sportsmanship among underprivileged children. The various Indian tribes responded to Abramoff’s requests for donations, as Abramoff was their lobbyist promoting their interests on Capitol Hill, the Israeli telecommunications company that wanted the wi-fi contract through the House Administration Committee was also an Abramoff lobbying client. But IIA?

According to CAF’s 2003 990PF, the IIA that gave $500,000 to the Foundation was listed with an address on Weisman Street in Tel Aviv. That address is an office complex, a stunning complex modeled after the Guggenheim Museum, loaded with embassies, international banking firms, and major Israeli law firms. According to the Washington Post, IIA stands for “International Interactive Alliance” which it identified as an international gambling company pushing internet gambling. However, IIA’s home base appears to be in Gibraltar, not Israel. Was it connected to Abramoff’s financing of sniper and other military equipment for radical West Bank settlers?

IIA’s contributions may not have been limited to $500,000. It apparently gave $1.5 million to Abramoff’s old firm, Greenberg Traurig, which turned some money to the right wing think tank, the national Center for Public Policy Research which gave the money to one of Abramoff’s scads of wholly-owned limited liability corporations, the Kaygold LLC (Kaygold’s address happens to be Abramoff’s home address as well and was listed by the National Center on its 2003 990 as one of its 5 highest paid contractors). Kaygold is then listed on CAF 990PFs as having contributed almost $48,000 in 2003 to the Foundation. Was Kaygold simply laundering more IIA money to and through the Foundation? Was IIA supportive of or opposed to the tribes’ interest in opening more casinos (since Abramoff used money for both pro- and anti-casino efforts, it could be either)? Wouldn’t major donations of this sort from off-shore entities catch someone’s eye at Treasury or the IRS itself?

2. What was the Capital Athletic Foundation’s home schooling program, who ran it, what happened to it? In 2001, the Foundation apparently spent $102,000 on a religious Jewish home schooling program, and the Foundation recorded tuition income from the program to the tune of $13,420 in 2001 and $20,180 in 2002. Yet the Foundation reported no staff and of course provided no detail in the 990 on the 6-figure home schooling expenditure, so what was this program and who benefited from the expenditures and, hard to ask, the educational process?

Abramoff’s friend, Rabbi David Lapin, helped him create the religious school, the Eshkol Academy, which received $4 million in grants from the Capital Athletic Foundation. Better known for his multi-million consulting contract with the Marianas Islands (a no-bid contract to promote ethics in government, work including paying for a trip for Tom DeLay to the Marianas), another Abramoff lobbying client, Rabbi Lapin told the press that the school grew out of the home schooling program. Was Capital Athletic Foundation taking tuitions (generally at $12,000) for Eshkol kids under the guise of income for the foundation to use for its other activities? If the foundation did run a home schooling program, ostensibly in Maryland where Abramoff lived, wouldn’t the state of Maryland or Montgomery County have some interest in the operations and legitimacy of the foundation’s provision of home schooling services?

3. What was the story behind the creation and cancellation of the Capital Athletic Foundation fundraiser scheduled for March of 2003? As he plotted his complex web of surreptitious cash flows from donors to lobbyists to politicians and back again, maybe Abramoff enjoyed the delicious irony in planning a fundraiser for the Capital Athletic Foundation at the International Spy Museum.

The foundation had planned a fundraiser at the Museum, paying the wife of Congressman John Doolittle (R-CA) a substantial sum to put together the shindig. Certainly by 2003, there were plenty of indications that Abramoff was skating on thin ice, but that didn’t deter Julie Doolittle or the big-name stars she attracted to the event. The guest to be honored that night was to have been Jim Kimsey, one of the America Online (AOL) founders and head of the eponymous Kimsey Foundation. Dan Snyder, the majority owner of the Washington Redskins, was listed as a co-host of the party. Among the luminaries to attend with speaking roles, aside from members of Congress (DeLay, Santorum, Rohrbach), were Fox TV’s Tony Snow and Brit Hume and MSNBC’s Chris Matthews. Other big names in the event included opera star Placido Domingo on the event committee, Pittsburgh Steeler running back, Jerome “The Bus” Bettis, and Philadelphia Eagles running back Brian Mitchell. Despite being identified as the chair of the event, Snyder’s people say that he wasn’t involved in the event, but had only lent his name without knowing more than that, Matthews went vitriolic implying that he had been used by Abramoff and Doolittle and called Abramoff “Satan”, and the others have been quiet about the event.

We kid you not on the substance of the event, a “Spy Game Gala”, in which 30 teams of 10 people would interact with 15 paid actors to get clues to solve a spy puzzle designed by a video game designer and others. The winning team would get $50,000, but the event was intended to raise $300,000 for the foundation. The notice of the event on the DC Social Calendar included more than Snyder in a major role:

MARCH 26CAPITAL ATHLETIC FOUNDATION GALA SPY GAMEYou have been selected for a top secret Washington, D.C. Mission. Please join Daniel M. Snyder, Dinner Chair, and Tony Snow, Master of Ceremonies, in presenting The Capital Athletic Foundation's "Interactive Spy Game" in honor of James V. Kimsey, Founding Chairman of America Online. The Interactive Spy Game, created by the writer of the Lord of the Rings video game where one victorious team will win up to $50,000 in prizes, begins promptly at 7PM, at The International Spy Museum, 800 F Street, NW. Washington, DC Game Registration/Reception at 6pm. Come dressed to kill! (Black tie) Valet Parking Proceeds will benefit the Capital Athletic Foundation. 6 PM, International Spy Museum, 800 F St., NW; $1,000. Chairs: Daniel Snyder, Jack Abramoff, Jack Kemp, Joe Robert Jr., Eleanor Holmes Norton. Please report back to Special Agent Headquarters at (703) 416-6414 or rsvp@cconsulting.net .

Who really was involved in this event? How connected to Abramoff were these luminaries? Or were they simply being good civic-minded Washingtonians volunteering to help a charity ostensibly operating to provide sports resources to kids? Were they so naïve not to recognize in 2003 exactly who and what Jack Abramoff was? Were they smart, savvy people who simply got duped or what?

4. What happened to the Capital Athletic Foundation’s awards? If you were a metropolitan DC philanthropic leader or foundation sector leader and a foundation popped up announcing a bunch of awards and programs, wouldn’t you take notice, keep an eye on the foundation, watch for notices of the awardees, inquire if you didn’t see anything? Somehow, Jack Abramoff’s Capital Athletic Foundation was big enough to make a splash, spend $6 million in less than four full years of operation, gather a gaggle of luminaries for a glitzy (subsequently cancelled) fundraiser, and no one asked what happened to the program?

Here was the purported statement of the Capital Athletic Foundation’s mission and program (taken from CAF’s now defunct website and from the information CAF supplied to Guidestar):

The mission of the foundation is to foster character development by promoting the American ideals of sportsmanship in all endeavors. Grants are made to public and private secondary schools for programs that integrate sportsmanship within the academic curriculum, and to Boy Scout troops, Girl Scout troops, and other youth organizations for programs that teach sportsmanship within the framework of organized group activities.

Program area(s): (1) National Sportsmanship Hall of Fame…(which) recognizes role models in sports, business, and civic life, who exemplify the ideals of sportsmanship…A national committee reviews nominations on an annual basis, and inducts honorees at the NSHF annual award dinner in Washington, DC…(2) Spirit of America Award…a lifetime achievement award conferred upon distinguished Americans who are role models in their respective fields and who represent the highest ideals of sportsmanship…(3) Spirit of America Certificate of Achievement for Schools:…certificates of achievement to secondary schools and colleges which do one of the following: Have outstanding records of sportsmanship in the athletic or scholastic activities; integrate the philosophy of sportsmanship within the educational curriculum; produce role models who embody the spirit of sportsmanship…(and) (4) Ambassadors of Sportsmanship Award… certificates of achievement to individual athletes, coaches, or teachers at the secondary school or the college level who are either role models or "ambassadors" of sportsmanship within their schools.

Given what is known about Abramoff’s philanthropic work, it all reads like a satire from The Onion, but it’s true. But don’t you think that all of the youth-oriented and sports-oriented foundations and nonprofits in the metro Washington area might have noticed the Capital Athletic Foundation, researched its programs, and looked for information about what this foundation was actually doing? It was listed by the Foundation Center as the 29th largest foundation grantmaker in DC in 2002 and the 25th in 2003, and none of the Foundation’s grantmaking peers or grant-seeking nonprofits wondered what had happened to these programs? What did the metropolitan Washington philanthropic sector think about and know about the Capital Athletic Foundation?

This is hardly all there is to Abramoff’s star turn as a budding philanthropist. The Capital Athletic Foundation’s 990PF filings are a gold mine of dubious, laughable, and horrific money laundering hiding behind the mask of a charitable foundation. NCRP noticed some of it. A number of other bloggers have caught it. Where was the Internal Revenue Service? Where was the self-regulatory fervor of the nation’s foundation trade associations? Maybe the IRS was so busy chasing All-Saints Episcopal Church for a guest sermonizer’s mention of George Bush that they missed CAF. Maybe the foundation sector leaders missed the Capital Athletic Foundation because Jack Abramoff failed to join their organizations and sign their statements of ethical standards. Someone should have caught, called out, and convicted Jack Abramoff for his misuse and abuse of philanthropy long before his non-foundation plea bargain earlier this month.

posted on: Thursday, January 19, 2006

After winning the right to name a new species of monkey after itself and making the final bid on eBay to win a grilled cheese sandwich that has the likeness of the Virgin Mary, the Associated Press reports that GoldenPalace.com--an online casino--recently purchased a kidney stone that William Shatner passed last year. Shatner received $25,000 for the stone, and has promised to donate the money to Habitat for Humanity.

We're just happy to have found a news story involving casinos and charity that includes no reference to Jack Abramoff.

posted on: Monday, January 09, 2006

Jack Abramoff’s misuse of the Capital Athletic Foundation’s tax-exempt funds might have done great damage to the public’s sense of philanthropic credibility, not to mention how much the public can rely on the IRS to catch philanthropic miscreants like Abramoff and company, but maybe there’s a perverse silver lining for a few charities from the nation’s biggest political scandal since Teapot Dome in the 1920s.

In their scramble to escape association with the likes of Abramoff, politicians, from President George W. Bush to state and local officials, are dumping campaign contributions received from or through Abramoff and in many cases donating the funds to charities.

Now there’s a fundraising strategy for hard-pressed development staff: Look for political scandals and lobby, whoops, wrong word, solicit, nope, that doesn’t work, contact the politicians that received the illicit swag and convince them to donate the spoils to charity.

None of the suddenly pristine politicians of both parties are disgorging the Abramoff-linked contributions as illegal, mind you. While Abramoff clearly misrepresented himself to his political donors and often advocated against what they thought they were getting him to lobby for, politicians frequently get campaign contributions from a variety of sources, many of which don’t look much more appetizing than Abramoff and his companions.

President Bush, for example, has decided to ditch $6,000 in campaign contributions from Abramoff himself (plus his wife and a contribution from the Saginaw Chippewa Tribe that Abramoff represented), even though Abramoff was well recognized as a “Bush Pioneer” for having regularly bundled $100,000 or more per cycle. The beneficiary, according to the RNC, will be the American Heart Association. That’s only a small part of the $300 million Bush raised in the 2004 election cycle, but who knows how much additional ill-gotten loot charities might be able to carve out of the RNC’s coffers?

A number are donating the proceeds to charity, and the AP wire has actually been running a tab of politicians ditching their Abramoff dollars in a belated attempt to avoid association with his cesspool of problems.

Some reports identify the specific charities benefiting from Abramoff-funneled funds:

Congressman Walter Jones (R-NC) has turned over $1,000 to the Salvation Army;
Congressman Paul Ryan (R-WI), has divvied up all of $949 between the USO Operation Phone Home and the Bert Blaine Memorial Heart Association Heart Walk;
Senator Judd Greg (R-NH) $12,000 to Marguerite’s Place;
Congressman Eric Cantor (R-VA) has given $10,000 to the William Byrd Community House;
Congressman John Sweeney (R-NH) has turned over money to the St. Jude Children’s Research Center;
Congresswoman Kay Granger (R-TX) has given to the Boys and Girls Club of Greater Forth Worth,
Congressman Marilyn Musgrave (R-CO), $1,000 to Crossroads Safehouse;
Congressman Heather Wilson (R-NM), $1,000 to the Great Southwest Council of the Boy Scouts of America;
Congressman Lane Evans (D-IL) to the Community Caring Conference;
Senator John Warner (R-VA), $1,000 to the Pentagon Memorial Fund;
Senator George Allen (R-VA), $2,000 for housing for the families of wounded military service people;
Congressman Ernest Istook (R-OK), $6,000 to the Oklahoma Medical Research Foundation; Congressman Mike Ferguson (R-NJ), $1,000 to the Children’s Specialized Hospital Foundation;
Congressman Mark Foley (R-FL), $2,000 to a Palm Beach drug- and alcohol-rehabilitation program;
Former House Majority Leader Tom DeLay (R-TX), $15,000 to various suburban Houston charities; and
Congressman Tim Holden (D-PA), $1,000 to an unnamed animal shelter. Clearly animals and kids do well as hard-to-criticize places to donate the campaign plunder and decontaminate itchy politicians’ images.
Some recycling of Abramoff campaign contributions into charity contributions went to groups addressing relief and reconstruction issues related to Hurricanes Katrina and Rita:

Senator Thad Cochran (R-MS) giving $8,000 and Congressman R. Wicker (R-MS) turning over $250 to the Mississippi Hurricane Recovery Fund,
Congressman J.D. Hayworth (R-AZ), $2,250 to the Salvation Army Katrina Disaster Fund,
Congressman Jim McCrery, as much as $35,000 to the Salvation Army,
Congressman Bob Simmons (R-CT) giving $1,250 to the Bush-Clinton Katrina Fund,
And in addition, Senator Craig Thomas (R-WY) gave $8,000 to victims of a 2005 tornado in the town of Wright, Wyoming.

A few members of Congress remembered that the donors most viciously misused by Abramoff were Indian tribes and therefore donated their campaign booty to Indian charities:

Senator Dick Durbin (D-IL), $11,000 to the American Indian Center of Chicago and the American Indian Health Service of Chicago;
Senator John Thune (R-SD), $2,000 to the White Buffalo Calf Woman Society;
Senator Tim Johnson (D-SD), $8,250 to Billy Mills Running Strong for American Indian Youth; Senator Barbara Mikulski (D-MD), $5,000, Congressman Bob Ney (R-OH), $6,500, and Congressman Ralph Regula (R-OH), $1,000 to the American Indian College Fund;
Senator Kent Conrad (D-ND), $3,750 to North Dakota’s tribal colleges;
Senator Max Baucus (D-MT), $18,892 to seven tribal colleges; and
Senator Conrad Burns (R-MT), some portion of the $150,000 he received given to Native American charities, the remainder refunded to donors.

Noteworthy recyclers of Abramoff campaign contributions into donations for as of yet unnamed charities include House Speaker Denny Hastert (R-IL), who has donated $70,000 to charities; Senator Rick Santorum (R-PA), $2,000; Congressman Tim Holden (D-PA), $1,000; Congressman Roy Blunt (R-MO), $8,500; Senator Elizabeth Dole (R-NC), $1,000; Senator Jim Talent (R-MO), $3,000; Senator Hillary Rodham Clinton, $2,000; Senator Gordon Smith (R-OH), $4,000,; and Senator John Sununu (R-NH), $3,000.

No word yet on how or whether recently resigned Congressman Randy “Duke” Cunningham plans to dispose of the $12,500 he received in campaign contributions from tribes represented by Abramoff. Of course, the Duke did find a way of offering to contribute some of his personal booty that he got in bribes from defense contractor MZM, donating some of the proceeds from a house sale to San Diego charities to help clean up Top Gun’s sullied image, though the charities had some interesting right-wing political relationships (see “The Duke’s Demise” in the Summer 2005 issue of Responsive Philanthropy). Unfortunately, Cunningham was unable to use charity to clean up his image fast enough with disclosure of the extent of his corruption, as evidence of more bribery spun him out of Congress and unlikely to devote more cash to charities (see “The Duke’s Demise: Part Deux” in our blog archives).

Unlike Cunningham, Abramoff hasn’t yet cried crocodile tears in front of the press microphones, but he has certainly looked as miserable as possible while copping his pleas in Washington, DC and in Florida on successive days. As members of Congress and others run as fast as they can from his campaign finance donations, they might soon appear equally distressed as Abramoff names names and provides details. Their panic-stricken donations to charities might not provide the ethical comfort or the political cover that they might need.

Nonetheless, a few charities might be able to benefit from the rapidly spreading phenomenon of Abramoff-induced guilty consciences. In the wake of the indictments and plea bargains surrounding Abramoff, some in the press have taken to calling him “Casino Jack”. Based on the flow of his money now diverted to named and unnamed charities, maybe Abramoff should be dubbed “Charity Jack” instead.

posted on: Tuesday, January 03, 2006

If you’ve been keeping an eye on NCRP’s webpage and the NCRP blog, you know that NCRP has been keeping an eye on the nonprofit and philanthropic response to the devastation wrought by hurricanes Katrina, Rita, and Wilma in 2005.

We’ve also been watching what other organizations have captured about the challenges in the nonprofit response, and we assume nearly all of you have seen the litany of press stories about the American Red Cross (ARC), culminating in a new investigation by the Senate Finance Committee after the resignation of the ARC CEO and the revelations about some of the ARC’s peculiar governance and accounting practices.

One might expect the Government Accounting Office to take a look at Katrina response issues, as it did after 9/11, and a few tepid statements have been released recently that touch on the nonprofit service delivery angle. The GAO’s December report, Hurricanes Katrina and Rita: Provision of Charitable Assistance (http://www.gao.gov/new.items/d06297t.pdf), highlighted a couple of interesting problems. The most significant was that the Red Cross, which the GAO described as having taken in $1.5 billion, well over half of the charitable giving in response to Katrina, was on occasion not all that present in hard-to-reach areas. This delicately worded extract from the GAO report hints at some of the problem:

GAO teams that visited the Gulf Coast in October 2005 observed that the American Red Cross did not provide relief in certain areas because of safety policies; and thus, other charities, such as the Salvation Army and smaller charities, often helped to meet the needs of those areas. The American Red Cross told us that with the American Society for Civil Engineers and FEMA, it had previously developed policies intended to protect the safety of service providers and victims following a disaster. These policies include not establishing shelters in areas that may become flooded during a disaster or in structures that strong winds may compromise. However, victims remained in areas where the American Red Cross would not establish shelters…GAO teams in Mississippi observed that the Salvation Army and smaller charities, such as local church organizations, filled many of the needs for volunteer services that the American Red Cross did not meet. Additionally, GAO teams estimated that in the Birmingham, Alabama, area, a significant portion of the approximately 7,000 evacuees were being cared for and sometimes being housed by local churches and their members.
If Senator Grassley’s committee is concerned about the Red Cross, the sector should be concerned that smaller organizations (though the Salvation Army was the #2 recipient of Katrina-designated charitable contributions after the Red Cross, though “only” $270 million compared to the ARC’s $1.5 billion according to the GAO) were willing to go into the areas and set up programs and shelter where the Red Cross wouldn’t or couldn’t. Yet, unlike the many valiant local and regional nonprofits in the Gulf Coast region doing what they could with obviously a pittance of resources, the Red Cross is a Congressionally-charted nonprofit charged with disaster relief, it is among the first recommendations of politicians when asked where caring donors might send their contributions in the wake of natural and man-made disasters (Katrina being a combination of both), and even a compulsory beneficiary of government-induced charitable donations, to wit: In December, Illinois Attorney-General Lisa Madigan offered 18 gas-gouging gas stations in the state a deal, either they ante up $1,000 contributions to the Red Cross by January 5, 2006 or face fines of up to $50,000 to punish them for their Katrina-related profiteering (http://www.sj-r.com/sections/news/stories/74473.asp).

Maybe the Red Cross shouldn’t always be the default recommendation of government officials pushing charity in place of competent government response, as President Bush did in the immediate wake of Hurricane Katrina, thanking Catholic Charities and the Salvation Army for their good work, but pitching the Red Cross (“The Red Cross needs our help. I urge our fellow citizens to contribute.”) as a preferred option for donors (http://www.whitehouse.gov/news/releases/2005/08/20050831-3.html).

Maybe joining the Senate Finance Committee’s investigation might be more appropriate for the White House rather than shilling for the Red Cross fundraising effort. What’s a Congressional Charter for if after raising $1.5 billion the Red Cross shunts the responsibility to a bunch of tiny nonprofits (plus the Salvation Army) that don’t have the Red Cross’s money but have a big chunk of mettle and courage?

The GAO has issued a couple of other reports addressing Katrina-related issues, including two looking at contracting issues (http://www.gao.gov/new.items/d06246t.pdf and http://www.gao.gov/new.items/d06235t.pdf). Most intriguing to us was the early report in September on the problems of oversight and accountability in the government’s preparation for and response to the disaster (http://www.gao.gov/new.items/d051053t.pdf). Lots of legislation popped up in Congress calling for special Inspector Generals and oversight czars and multi-agency task forces.

For both government contracting and for charitable and philanthropic responses such as the Red Cross’s, we need a real-time accountability mechanism, so that we don’t look back years from now and bemoan the problems that should have been foreseen, became all to readily apparent to observers on the ground, and could have been prevented but for the lack of watchdogs able and willing to look at the nonprofit and philanthropic side of the Katrina response.