Accountable Strategies blog

A blog about accountability issues in the public, private, and nonprofit sectors

Archive for July, 2007

The candidates and nonprofits

Posted by David Kassel on July 30, 2007

Nonprofits have come under increasing scrutiny in recent months for issues ranging from nonpayment of payroll taxes to a lack of financial transparency  to the simple fact of their increasing involvement in delivering federal and other governmental services.

Some of that scrutiny has lately been brought to bear on the connections that some politicians, particularly candidates for president, have with nonprofits.

In The Nonprofit Quarterly, Rick Cohen calls for higher standards of disclosure regarding nonprofit charities, particularly those charities that are connected to the candidates.  He writes:

Although it is difficult to imagine that the behavior of presidential candidates would be a role model … full disclosure of donors and expenditures of politicians’ charities should start with those established by or run by candidates, their family members, their aides, and their campaign staff.

Here are some thoughts on some nonprofit connections held by some of the major candidates for president:

John Edwards:

John Edwards’ connection with a Georgia-based nonprofit called The Center for Promise and Opportunity has generated a lot of scrutiny, starting with a June 22 article in The New York Times, which itself drew heavy criticism in the blogosphere.  The gist of the NYT piece was that Edwards established the nonprofit ostensibly to fight poverty, whereas in reality, he used it to finance his own travels and other political activity after his 2004 vice presidential campaign and before he announced his current campaign for the presidency. 

 The 2005 IRS tax filing for the Center for Promise and Opportunity doesn’t disclose the names of the donors of the $1.3 million in contributions it received, nor does it disclose the names of the consultants to which the Center paid $259,000.  The Center’s directors included members of Edwards’ political staff, including one who received more than $105,000 in compensation from the organization and another who received $70,000.

In the rebuttal to the piece noted above, Greg Sargent at TPM Cafe makes the valid point that the Times didn’t prove its assertion that Edwards used the nonprofit for political purposes and that it should have said only that the arrangement “raised questions” about whether that was its purpose.  The piece was “badly botched,” Sargent maintained.

Sargent’s criticism is fair, but the known facts about this nonprofit are still troubling.  Nearly 60 percent of the organization’s budget went to payments to employees and consultants.  And with the exception of the two directors, the recipients of those payments are not disclosed in the 2005 tax filing.  The stated purposes of the organization—which included “mobilizing young people to join the fight against poverty…” and “retreats and seminars with foreign policy experts to discuss Iraq, promotion of democracy and freedom throughout the world…”-are elastic and unfocused.  And the fact that Edwards himself, who founded the organization, isn’t listed as a director or anywhere else on the tax filing, simply invites suspicion.

Cohen maintains that “some of (Edwards’s) philanthropic connections are quite serious, positive, and heart-wrenching,” such as foundations and nonprofits that John and Elizabeth Edwards started in honor of their teenaged son, Wade, who died in a car accident.  Those organizations have provided scholarships and awards.

But as Cohen points out:

The Edwards 501(c)(3) nonprofit world, combined with his PAC and 527s, suggests that the candidate has a somewhat blurry conception of the distinctions between public charities and political tools. And this undermines the potentially noteworthy work of the foundations and charities he and his wife established in honor of his son.
Particularly disturbing about the Edwards scenario is his absolute unwillingness to reveal the names of donors. Politicians’ hiding donors and expenditures behind the confidentiality of the 501(c)(3) public charity status is an abuse of the public trust.

Let’s hope Edwards’ 2006 tax filing provides this needed disclosure.

Mitt Romney:

Mitt Romney may be a classic case of a politician trying to have it both ways with respect to 527s, a class of political nonprofit organizations set up to influence political elections.

527s remain largely unregulated by the 2002 McCain-Feingold campaign reform bill, which limited soft money spending by national political organizations.  Before he announced his intention to run for president, Romney, then governor of Massachusetts,  benefited from his chairmanship of the Republican Governor’s Association, a 527 organization, to run $900,000 in ads touting his accomplishments.  Ostensibly, these were ads in support of Kerry Healey to succeed him as Massachusetts governor, but as the GOP blog, GOPProgress, pointed out, Healey got significantly less face-time on the ads than Romney himself.

Romney has since gone on to attack 527s, in explaining his opposition to the McCain-Feingold campaign finance reform bill.  In an interview with The Washington Post, Romney criticized the legislation as having “made things worse, not better,” adding that, “the law that he (McCain) passed that is in place now in our country has created a circumstance where those 527s rule the day. That’s what he put in place.”

Hillary Clinton:

The biggest nonprofit-related controversy involving Hillary Clinton I could find in an Internet search stemmed from a front-page February 27 Washington Post article, which began breathlessly:  “Sen. Hillary Rodham Clinton and former president Bill Clinton have operated a family charity since 2001, but she failed to list it on annual Senate financial disclosure reports on five occasions.”

The article went on to note that the Clinton Family Foundation has “enabled the Clintons to write off more than $5 million from their taxable personal income since 2001, while dispensing $1.25 million in charitable contributions over that period.  Hillary Clinton’s office immediately amended her Senate ethics reports after receiving inquiries from the Post.

This article received scathing criticism in Media Matters, which noted that the Post piece fueled numerous right-wing attacks on Sen. Clinton, “including the distorted claim that she had been operating a ‘secret foundation that has allowed her and her husband to avoid paying taxes on more than $5 million.'”

The WaPo article was, indeed, a largely baseless attack on Sen. Clinton.  It focused on a technical violation of the disclosure requirements for members of Congress under the Ethics in Government Act; but it didn’t establish that Clinton would have had any motive to keep the foundation secret.  In fact, as the article noted, not only did Clinton immediately provide the disclosure on her ethics reports, but the Clintons had duly provided tax filings for the foundation to the IRS.

When reporting on potential violations of the law, journalists have an obligation to establish some basis for a person’s motive in doing so.  If the violation can’t be shown to be more than an oversight, it isn’t worth more than a paragraph in the political-roundup section of the paper.  The Post article did imply that the Clinton foundation provided less in charitable contributions than it should have.  But the piece provided little context for the amounts foundations should contribute. 

Rudy Giuliani:

Giuliani appears to have had at least one controversial relationship with the long-time head of a nonprofit, the Twin Towers Fund, that Giuliani set up in response to 9/11, according to Cohen at The Nonprofit Quarterly.

Long-time Giuliani confidant Bernard Kerik, who was vice chair of the nonprofit, was the subject of much controversy over his presidency of another nonprofit, the New York City Correction Foundation.  During Kerik’s watch, that foundation was looted of $137,000, Cohen noted.  Giuliani later cut his ties to Kerik in the wake of that and other “personal and marital” issues involving Kerik.  But Cohen contended that Giuliani exhibited “a blindness to predatory behavior by one (of his) closest friends and confidants.”  That was not a great sign, he said “for a White House occupant in charge of appointing board members for nonprofit and quasi-governmental boards, and for setting a tone of accountability for the nonprofit sector.”

Barack Obama:

Obama appears to be benefiting from at least one nonprofit established on his behalf, which is employing a careful interpretation of campaign finance laws to maximize contributions to his campaign. 

Vote Hope, a Political Action Committee, which seeks to tap voters who have already given the maximum of $2,300 directly to the candidate, has been formed to provide a projected $2 million to Obama to help him win California. 

While campaign finance law prohibits PACs from spending unlimited amounts of money to further a specific candidacy, the Vote Hope PAC isn’t directly connected with Obama.  According to The Boston Globe, the donations to the PAC are considered legal as long as individual donors to the PAC “don’t retain control over how the money is spent.”

Although he is not connected with the PAC, the arrangement nevertheless is forcing Obama to walk somewhat of a political tightrope, since he has also been critical of 527s and their soft money role in financing campaigns.  Obama, however, never directly headed a 527, as Romney did, and thus has somewhat more of a basis for his criticism.

John McCain:

McCain was, of course, one of the two principal sponsors of the 2002 McCain-Feingold campaign finance reform legislation, and has since spearheaded efforts to bring 527s to heel under it.   In February, he reintroduced legislation to end 527 donations and supported a suit filed in court in 2005 to force the FEC to regulate 527s. But as The Washington Post has reported (in a legitimate story this time), McCain is financing his current presidential campaign with the help of some of the same GOP “fundraising giants who created and flourished in the soft-money system.”

At least six of McCain’s first eight national finance co-chairmen have given or raised large donations for political parties or 527 groups, the Post reported.  In all, the finance co-chairs have given at least $13.5 million in soft money and 527 donations since the 1998 election.  The piece doesn’t show McCain to be a complete hypocrite, since he’s apparently not tapping into 527s directly. But it does effectively tarnish his reformer image.

Posted in campaign finance and lobbying, Nonprofit, Public | 3 Comments »

One group’s attempt to quantify Bush’s impact on government

Posted by David Kassel on July 18, 2007

George W. Bush is widely known to be concerned about his legacy, and he may indeed be doing all he can to cement a future historical judgment of him.  Only it looks as though it may just turn out to be as one of the worst presidents in U.S. history.

It may not even be Iraq that ultimately brings that judgment down upon him.  It may be the concerted effort he (or Dick Cheney) appears to have made to dismantle our constitutional system of democratic checks and balances and to turn the country in the direction of a police state.

Can we quantify the constitutional damage Bush and Cheney have done?  One recent attempt to do so is contained in a new report  issued by the nonprofit OpenTheGovernment.org  and the People for the American Way Foundation.

If anyone in the House of Reps is looking to compile a Bill of Particulars against the Bush administration for its assorted high crimes and misdemeanors, they might well begin with this report, which is a compendium of the myriad actions the administration has taken in the wake of 9/11 not only to make government more secretive, but to deceive Congress and the public on issues ranging from Iraq to Medicare to the environment.

Quite a bit of what  the Bushies have done (that we know of) to thwart the Constitution and our democratic process is at least mentioned here.  The report lays it out in a dispassionate yet easily understandable manner that only now and then conveys the chilling nature of those actions, such as the White House instructions to the EPA after 9/11 to tell the public that the air around Ground Zero was “safe,” even though the EPA had not conducted full testing. Now we know of course that the air wasn’t safe and that scores of police and firefighters later died of cancer resulting from toxins in the air.

The report focuses on the concerted effort by the Bush administration since 9/11 to make government operate under a thicker and thicker cloak of secrecy, and suggests that things have indeed gotten worse than they’ve ever been before.  Among the topics covered are the administration’s efforts to weaken the 40-year-old Freedom of Information Act, its consistent use of executive privilege, its growing practice of classifying public records, its use of “covert propaganda” in both the foreign and domestic media, its secret court proceedings that include detentions of people on immigration-related and terrorism charges, and its increasing efforts to gag and punish whistleblowers and investigate leaks of secret and potentially illegal activities.

As the report’s Foreword states:

Most Americans recognize the need to safeguard national security information from improper public disclosures that would damage the national interest. But national security has become a blanket excuse to withhold information from the public as well as from Congress, especially in the aftermath of the 9/11 terrorist attacks.

Interestingly, in what might not even have been a conscious intention of the author, the report highlights the general ineffectiveness of Congress thus far in thwarting these attacks on the Constitution.  In case after case, the report mentions legislation that has been proposed to rectify the damage in specific areas, and notes that the legislation has yet to be enacted.

Take the FOIA, for instance.  The report states that “the chilling of FOIA in the Bush Administration began nearly from its outset.” In October 2001, then Attorney General John Ashcroft issued a memo on FOIA that substantially undermined the law’s presumption of openness. The memo encouraged agencies to limit disclosure of information and ordered them to “carefully consider” such interests as national security, business information, and personal privacy before allowing the release of any information.

In the meantime, backlogs in responding to FOIA requests have been increasing.  In some cases, requestors can wait years for the information that they requested.  So, what has been done about this?  The report states that In March 2007, the House passed the “Freedom of Information Act Amendments of 2007” (H.R. 1309), while the “Open Government Act” (S. 849) was awaiting floor time in the Senate for debate and a vote.

The WatchdogBlog.org, by the way, reported early this month that S. 849 was being held up by Republican Senator Jon Kyl of Arizona on behalf of current Attorney General Alberto Gonzales.  According to WatchdogBlog, the bill would:

  • Restore meaningful deadlines for agency action under FOIA;
  • Impose real consequences on federal agencies for missing statutory deadlines;
  • Clarify that FOIA applies to agency records held by outside private contractors;
  • Establish a FOIA hotline service for all federal agencies; and
  • Create a FOIA Ombudsman as an alternative to litigation.

Regarding classifications of documents, the OpentheGovernment.org report notes that on an average day of the year, nearly 40,000 items, such as documents, files, or videos, are classified by government officials and private contractors.  This number has been increasing for the last ten years and has substantially increased in the last six years.  In 2003, President Bush issued an executive order which “significantly changed the presumptions about classification. It removed the requirement that, if there were a significant doubt about classification, it should not be classified,” the report notes.

The report also describes the practice by the administration of “selective declassification (of records) for political means,” such as the decision by President Bush to secretly declassify sections of a National Intelligence Estimate that supported claims of weapons of mass destruction in Iraq. These were leaked to reporters by the Office of the Vice-President, the report points out.

And there is the increasing use of the claim that information is privileged as involving state secrets or that information is “sensitive.”  Some of the recent uses of sensitive information that the report cites include:

  • The DC government was not allowed to see information on trains that are allowed to travel through the District carrying hazardous cargoes.
  • The Nuclear Regulatory Commission attempted to suppress a report by the National Academy of Sciences that it did not agree with.
  • The Federal Energy Regulatory Commission  refused to share information about the safety of a proposed Liquid Natural Gas plan with the Connecticut Attorney General because it was Sensitive Energy Information.
  • The Department of Homeland Security refused to name the new DHS ombudsman.

Then there’s executive privilege.  The report notes that starting in 2001, the administration began using expansive claims of executive privilege to resist Congressional inquiries into a variety of areas.  It cites numerous cases in which executive privilege has been cited, including the Boston FBI’s misconduct in the 1960s that resulted in an innocent man being imprisoned for 30 years, Justice Department memos on campaign finance prosecutions, copies of the President’s Daily Brief relating to perceived terror threats prior to 9/11, the activities of then White House Counsel Alberto Gonzales when he was nominated for Attorney General, Supreme Court nominee John Roberts’ activities in the Justice Department, and public access to the historical records of past presidents.

The WH is of course claiming executive privilege in withholding information from Congress on its warrantless wiretapping surveillance program. 

The report also presents dozens of examples of orders and attempts by the administration to gag public officials, particularly scientists, such as this gem about the U.S. Geological Survey, which required scientists to obtain “pre-approval” of all presentations, reports or other public releases of any material that has “findings or data that may be especially newsworthy, have an impact on government policy, or contradict previous public understanding.”  One can be pretty sure where the Bush administration would have come down in the 17th Century controversy over Galileo’s claim that the earth revolves around the sun.

The report further details the ineffectiveness of the Office of Special Counsel in protecting whistleblowers in the administration and notes that threats have increased against whistleblowers who reveal information on mismanagement of agencies such as the NSA and FBI and abuses by military contractors. The report adds that the House passed the “Whistleblower Protection Enhancement Act of 2007 (H.R. 985) and that the bill was referred to the Senate (S. 274) where it was awaiting a floor vote.

Read it, it’s worth it.

Posted in FOIA, Public | Comments Off on One group’s attempt to quantify Bush’s impact on government

What’s being done about the presidential signing statements?

Posted by David Kassel on July 9, 2007

Maybe a special counsel needs to be appointed.  Maybe a lawsuit should be filed.

So far, though, it’s unclear exactly what Congress has done or plans to do in response to presidential actions, which have been described as ”threatening to overturn the existing structures of constitutional law.”

There doesn’t seem to be a concerted plan of action.

The issue I’m referring to is President George W. Bush’s use of signing statements to indicate that he won’t obey selected provisions of laws enacted by Congress.  The practice has also been described by the nonpartisan Congressional Research Service as a strategy to expand presidential power at the expense of  Congress.

Rep. John Conyers Jr., the chairman of the House Judiciary Committee, launched an “aggressive” investigation into the use of the signing statements following a hearing in late January.   No hearings, however, have been scheduled since, although an “oversight and investigative unit” of six attorneys hired by the Committee’s Democrats is continuing to investigate the matter, according to a staffer I talked to in a call to Conyers’ office.

In early May, House Speaker Nancy Pelosi suggested she might file suit over the signing statements.  This was more than a year after The Boston Globe reported that Bush has used signing statements to challenge more than 1,100 sections of bills — more than all previous presidents combined.  

I emailed Pelosi’s office on July 6, asking whether a lawsuit was still being contemplated, and whether the idea of a special counsel had been considered as well.  I haven’t yet gotten a response.

In June,  the Government Accountability Office presented the first clear evidence that federal agencies have actively disobeyed laws that were challenged by the president through the signing statements.

Presidents prior to Bush have made a practice of issuing signing statements.  But the difference with the present administration may be the sheer scale of the practice and Bush’s determination to use the signing statements to evade laws he considers to be unconstitutional or simply doesn’t want to comply with.   As The Boston Globe’s Charlie Savage noted, among the laws Bush said he can ignore are military rules and regulations, affirmative-action provisions, requirements that Congress be told about immigration services problems, ”whistle-blower” protections for nuclear regulatory officials, and safeguards against political interference in federally funded research.

In December 2005, Bush asserted that he can bypass a statutory ban on torture. In March 2006, the president said he can disobey oversight provisions in the Patriot Act reauthorization bill.  He has declared in signing statements that he does not have to obey laws forbidding US troops from engaging in combat in Colombia, or requiring him to tell Congress before diverting money to ”black sites” where suspected terrorists are secretly imprisoned.  He has also stated that he will ignore laws passed by Congress forbidding warrantless domestic spying.

According to The Globe, last year, the American Bar Association stated that Bush’s use of signing statements was “contrary to the rule of law and our constitutional separation of powers.”

Admittedly, the options available to Congress as recourse aren’t easy ones nor are they sure of success.  For instance, there’s the question as to whether members of Congress would have standing to bring a lawsuit regarding signing statements.  And what could Congress practically hope to accomplish through a hearing process in which it subpoenaed agency heads who had disobeyed laws?

I emailed some questions about congressional options to George Dargo, a professor at the New England School of Law, who has criticized Bush for using the signing statements “to subvert the mechanisms of law enactment contained in Article I (of the Constitution).”

Dargo replied:

…when it comes to the question of a member of congress having standing to sue the executive,  you have the added problem of separation of powers.  Can you allow a member of Congress, having lost in the legislative arena, to get a “second bite at the apple” in the judicial arena?  … It appears to me that it would be a real constitutional issue that a court would have to consider.  …I am just suggesting that members of Congress would have to show some real “injury” in order to prevail on the issue of Standing in order  to have a court review the issues “on the merits”.
 
As to the agency subpoenas: well, hauling agency heads before Congress can be very intimidating in itself.  But in addition, there is always the budgetary sword of Damocles: there is the implicit threat of a  budgetary reduction or other method of control by Congress that can force agencies to cooperate.  And if there is a law violation by the agency then Congress can refer its findings to the Justice Department for possible prosecution.  I think the agencies are much more vulnerable than is the Chief Executive on this issue of Signing Statements if there are violations of the agency’s mandate under its Organic Act and its Amendments.

So, the situation is far from hopeless.  Regarding lawsuits, in particlar, Republican Senator Arlen Specter introduced legislation last year that would explicitly give Congress standing to bring lawsuits against the signing statements.  The ABA has also urged passage of this legislation.  Yet, the bill has so far apparently gone nowhere and the lawsuit option has somehow “not gained traction in Congress.”

This all isn’t to say that Conyers’ Judiciary Committee isn’t conducting a thorough review of the signing statements issue and won’t come forward in the near future with some concrete and well-developed proposals that give Congress recourse in this matter.  It’s just that, so far, things appear to have moved slowly and haphazardly in Congress.  Maybe this sense of haphazardness stems from  criticisms  that have been levied against congressional and other Democrats even from sympathetic quarters that they lack the vision thing.  It would seem the signing statements constitute one of a number of areas in which a concerted plan of action is needed by Congress in order to preserve its constitutionally protected balance of power.

Btw, I wrote before about how a series of bad presidential appointments coupled with inappropriate accountability structures have made it difficult to clean up fraud, waste, and abuse at the Department of Homeland Security, and particularly at the Federal Emergency Management Agency.

Interestingly, President Bush maintained in an October 2006 signing statement that he has the executive authority to disobey a new law in which Congress set minimum qualifications for future heads of FEMA. Congress passed legislation stating that the president must nominate a candidate who has “a demonstrated ability in and knowledge of emergency management” and “not less than five years of executive leadership.”  Bush signed the bill and then issued a signing statement saying he could ignore the new restrictions, maintaining that the FEMA provision interfered with his power to make personnel decisions.

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