FRONT PAGE CONTRIBUTOR
A Charity “Scandal”, not a TEA Party One
The GOP Establishment wing of twitter is abuzz today about this story by ProPublica writer Kim Barker. ProPublica, for those who don’t know, is a far left-wing rabblerousing organization that has spent a ton of time and energy attempting to dig up dirt on right wing charities and PACs in an effort to slow the effectiveness of these groups. Ever willing to play the useful idiot, many establishment cronies are trumping up this story as proof of TEA Party corruption as alleged by Steve LaTourette’s nonsensical and hypocritical piece yesterday.
The basic thrust of Barker’s article is that Move America Forward, a charitable organization that purports to collect care packages to troops and which regularly hosts a Troopathon fundraising drive that is headlined by prominent conservatives, is being run improperly in a number of particulars. The overall insinuation and tone of the article is that Move America Forward does either little or no actual charity work and is in fact merely an improper conduit to make TEA Party consultants and/or their PACs rich. The folks who have a vested interest in discrediting the TEA Party have taken these insinuations and innuendo and are presenting them as what the article actually proves.
I have read the entirety of Barker’s article and as someone who has worked in house compliance with charities before, I can say the following things about the allegations in Barker’s piece, even if we assume that they are categorically true (which, coming from ProPublica, is not at all something I would assume):
- If true, some of the allegations clearly paint a picture of some violations of IRS regulations; however, they fall far short of the sensational allegation set forth in the headline that the charity is a full-scale swindle or scam. The allegations could just as easily be explained by poor or no advice of counsel. Again, if we assume that 100% of these allegations are true, they add up to negligence, but not at all necessarily fraud.
- If the ProPublica allegations are true, the charity definitely used some improper (if not illegal) practices to solicit donations – such as using stock images or images generated by other charities and creating the impression that they were in fact pictures generated by Move America Forward. This, of course, is highly unethical behavior within the charity universe and if true the people behind it (who, we can probably assume, are merely lazy low level development staffers and not necessarily any of the charity’s officers or directors, who likely would not have been involved in the minutiae of the content of every fundraising email) deserve censure. However, there is no indication that any of the prominent conservatives who volunteered their time to promote the Troopathon had any knowledge whatsoever that this was occurring.
- The article is peppered throughout with acknowledgements that Move America Forward does in fact send some care packages to troops. ProPublica finds it ominous that they cannot verify specifically how many were sent, and finds it super, super ominous that the officers and directors will not respond to ProPublica emails. Given what you see here in this piece and ProPublica’s entire bailiwick, this is in fact evidence of good common sense and not nefarious intent.
- Move America Forward appears to have either falsely claimed or overstated its relationship with various military institutions. If true, this is obviously suboptimal behavior, but this would not be the first charity that oversold itself during the course of soliciting donations.
- Even if you assume the worst case scenario about everything reported by ProPublica, this is a poorly run charity scandal. It is not a TEA Party scandal. The fact that this charity happens to be run by prominent TEA Party affiliated folks is not at all an indictment of the TEA Party as a whole, much less anyone who happens to have participated in Troopathon.
I hasten to note that I know nothing at all about Move America Forward or its daily operations. It may well be that it is a corrupt (as opposed to sloppy) charity. But I know bovine fecal material when I step in it, and I know the operating methods of ProPublica, and the folks who are gleefully grabbing on to this report and using it as a cudgel should think twice before they get burned.
Most of what is covered above requires no further explanation – they are not what you would ideally see from a charity but they are not evidence of actual corruption. Some of the allegations, however, need to be unpacked a bit more. The first and most relevant politically, is the allegation that Move America Forward “Pays Off TEA Party Cronies.” Here are the alleged facts upon which this allegation is based:
The driving force behind Move America Forward is Sal Russo, 67, the longtime political consultant who is listed on the 10-year-old charity’s tax returns as chief strategist.
Russo is better known for helping to form the Our Country Deserves Better PAC, also known as the Tea Party Express, one of the largest Tea Party groups in the country. Consultants from his Sacramento-based firm, Russo, Marsh and Associates, also set up two other PACs, the Move America Forward Freedom PACand the Conservative Campaign Committee, to aid conservative causes and candidates.
Russo and his associates have previously drawn attention for lavishing funds raised through the committees on themselves, using this money on an Alaskan cruise and fancy hotels as well as paying themselves huge consulting fees.
A closer reading of these paragraphs, which certainly paint an ominous picture, will show that they say nothing at all about the operation of Move America Forward – they are mere allegations that one of the people involved in it is someone who (again according to ProPublica) spends too much of the money donated to completely separate PACs on himself and his staff. There is literally nothing here about how the money donated to Move America Forward is spent.
Reading through this entire, very lengthy piece, there are only two actual alleged facts that show that Move America Forward is improperly funneling money to PACs. The first is based on flat out ignorance of FCC regulations:
According to its five most recent tax returns, Move America Forward paid out more than $2.3 million to Russo or Russo, Marsh and Associates for services including “program management and advertising.” That’s about 30 percent of the charity’s overall expenditures over that time.
“It was just so shady,” said Kelly S. Eustis, a former consultant for the Tea Party Express, also known as Our Country Deserves Better. “With PACs, I know it’s dirty money–it’s politics. But this is a charity that’s supposed to be helping the troops.”
Some of that money might have passed through Russo’s firm, paying for TV ads that the charity has claimed to run praising the troops. No major broadcaster in a top 10 TV market has reported an ad buy by Move America Forward since the Federal Communications Commission required such records be put online in 2012, however. Gonzalez, the Move America Forward spokesman, did not respond to a question asking whether the charity had run any TV ads on network affiliates in major markets since 2007.
ProPublica here just demonstrates a flat misunderstanding of what the 2012 FCC regulations require, which is that political/PAC ads be reported and placed in their online political file. The very point of these ads, from a charity compliance standpoint, is that they would not be required to be reported. Ads praising the troops are not political in nature and thus wouldn’t be found in an FCC search at all. Now, I don’t know whether Move America Forward ran the ads or not; but what I do know is that the fact that they weren’t found in the FCC political ad report is dispositive of nothing. Nor, yet again, is the fact that Move America Forward’s spokesperson has the good sense to ignore emails from ProPublica.
Move America Forward also routes charitable donations through companies started in part by Russo and Callahan, the charity’s former executive director.
In May, one button on the charity’s website sent donors to the website of a company that processes credit card donations called DonationSafe, founded by Callahan. Move Forward America doesn’t reveal how much it pays DonationSafe to process donations, but the company has received substantial fees for similar work for Russo-affiliated PACs.
Here is what I will say for the author of this piece; they have elevated the tactic of treating their own ignorance about basic facts in the story as proof of ominous behavior to an art form.
Finally, there is one actual fact which is definitely troublesome from an IRS compliance standpoint:
In its 2004 application for tax-exempt status, filed under penalty of perjury, Move America Forward told the IRS that it would not directly or indirectly share facilities, equipment, mailing lists or other assets with any political organization.
Yet Move America Forward shares its Sacramento office suite with at least two ofthethree PACs set up by Russo, Marsh, as well as The Campaign Store, DonationSafe and Frontline Strategies, a political consultant firm where Callahanis a partner.
According to the charity’s 2012 tax return, Move America Forward paid about$82,000 in rent that year. The PACs reported paying no rent for the same period, according to filings with the FEC. The office’s property manager confirmed to ProPublica that the rent for the office is now about $83,000 a year, plus fees for use of the common area, indicating that in 2012, the charity likely covered the rent for all of the suite’s occupants.
First of all, I don’t know whether the statement at issue was true when Move America Forward actually filed their original application or not, and the ProPublica article does not say. Second, this arrangement, as well as the arrangement in which the Tea Party Express was apparently given free access to Move America Forward’s email list, are definitely improper under IRS regulations, if we again assume ProPublica is being truthful and accurate. There is nothing wrong or improper about the actual sharing of office space, material, staff, or mailing lists per se, but the organizations definitely should have had in place a cost sharing agreement whereby the PACs reimbursed the charity for the use of the office space and equipment. While improper (if true), these facts are most suggestive of negligence rather than active fraud, and they are definitely a long way from proving that the charity was “lining the pockets of TEA Party cronies.”
There is nothing in the lengthy article at all to support the most damaging innuendo of all; that Move America Forward is actually a shell that bilks people of their donation money that is supposed to go to troops and instead uses it to line the pockets of scam artists. In fact, buried among several paragraphs where ProPublica again treats their own ignorance and inability to uncover facts as proof of wrongdoing, ProPublica is forced to acknowledge that the one fact they were actually able to uncover is that some troops did in fact receive care packages from Move America Forward:
Bill Durdin, the family readiness program coordinator for the 1st Marine Division, said Move America Forward recently sent care packages to at least five units in the division, but said a “thank you” letter from him to the charity included in a March 2013 email praising donors for the Geronimo pledge drive had actually been written a year or two earlier. In an email to ProPublica, Durdin described the charity’s use of his letter as “a serious case of ‘Cut & Paste(ing)’!”
How nefarious. Fundraisers used cut and paste.
Again I emphasize that I know nothing about Move America Forward or their practices. I’ve never participated in the Troopathon or given money to them and was only barely aware that they existed before today. It may well turn out that they are poorly run and are improperly using donor money. But I do know that this article today does not prove that. And I know also that it utterly fails to prove what it is being used for today, that this is a scandal that in any way meaningfully implicates a TEA Party group. This is not a TEA Party scandal. Even if all the innuendo splattered about by this story is true, this is a poorly run charity scandal.