06.22.2010 1

Media Scrutiny of Berman’s Non-Profits Should be Directed Against ACORN

By Kevin Mooney —

Questions are being raised in The New York Times about the relationship between Richard Berman’s for-profit communications firm and the six non-profit firms he founded. The Washington D.C. lobbyist, turned policy advocate, has used the non-profits to help organize against policies that intrude on the free market and interfere with consumer choice.

But his critics insist that the non-profits are actually money-makers for Berman and Company, the communications firm.

Organizations such as The Humane Society and Mothers Against Drunk Driving (MADD) that are unaccustomed to playing defense have suddenly been forced into a position where they are forced to account for the economic and social costs of interventionist policies thanks to Berman’s efforts.  Reporter Stephanie Strom does a nice job of explaining some of the history and provides ample room for a company spokeswoman to address the chief complaints.

But it is worth noting that Strom is the same reporter who wrote about the ACORN organization in the months leading up to the 2008 presidential election. Her investigation was shut down when Anita MonCrief, the anonymous source Strom had been using, revealed that the Obama Presidential Campaign had sent its maxed out donor list to the Washington D.C. ACORN office. The relationship between Strom and  MonCrief, a former Project Vote/ACORN employee, is described here in a previous TimesCheck posting.

The front page report on Berman, his media campaigns and non-profit groups raise legitimate questions but they should also be applied with equal force against ACORN, which has been the subject of congressional investigations and voter registration fraud allegations. While it is quite evident that Times makes every effort here to discredit Berman, it is ultimately forced to concede that there is no evidence of any federal violations.

After auditing the Center for Consumer Freedom and the Employment Policies Institute, the Internal Revenue Service (IRS) could find no violations and exonerated Berman, the NYT acknowledges.

The same cannot be said of ACORN. Cleta Mitchell, co-chair of the Republican National Lawyers Association (RNLA), had identified numerous violations of federal law involving ACORN’s non-profit organizations based on testimony MonCrief delivered under oath. So is why is this is not a subject for further investigation?

“Project Vote should be investigated and audited by the IRS to ascertain whether Project Vote should be allowed to maintain its 501(c)(3) tax exempt status, based on the apparent misappropriation of charitable contributions for impermissible purposes,” Mitchell concluded in her analysis.

In her reporting, Strom  goes into detail about some of the campaigns Berman has organized against groups that typically curry favor with the liberal news media.

She reports as follows:

“Across two decades, Mr. Berman has founded the Center for Consumer Freedom and five other nonprofits with similarly innocuous names. His industry donors — including restaurant chains whose costs could rise if living conditions for animals have to be improved, and wine and spirits companies that might sell less liquor if MADD has its way — can claim a deduction for charitable donations or business expenses. And since nonprofit groups do not have to disclose their donors, Mr. Berman’s groups offer an even more valuable asset — anonymity for companies that would rather their customers not know they are behind certain attacks.”

Strom continues:

“His critics say Mr. Berman’s organizations are little more than moneymakers for his for-profit communications firm, Berman and Company. Last month, in what appears to be a new tactic by those critics, the Humane Society and MADD filed a complaint with the New York Commission on Public Integrity, charging that the American Beverage Institute and Berman and Company were in fact lobbying and had failed to register with the state as lobbyists.

Sarah Longwell, a spokeswoman for Berman and Company and several of its nonprofits, called the filing `a harassment P.R. strategy, pure and simple.’

‘These complaints are the desperate acts of groups who can’t respond to the substance of our criticisms,’ Ms. Longwell said.”

As it turns out, the community organizers formerly  known as ACORN also benefit from anonymous donors.

“Anyone who celebrates the demise of ACORN has celebrated prematurely because they are not going away,” MonCrief said in an interview. “The network is repositioning itself so it can receive new donations.”

ACORN, which stands for the Association of Community Activists for Reform Now, has received over $53 million in federal funds since 1994, federal records show. Although the U.S. Supreme Court turned away a legal challenge to last year’s congressional ban on public funding, there does not appear to be any concerted effort on the part of lawmakers to have it re-imposed.

MonCrief indentified Wellspring Advisors, Vanguard Charitable Endowment, the Rockefeller Fund and the Tides Foundation as the major conduits for facilitating anonymous donations.

“If someone wanted to contribute directly to ACORN without having their name attached to it they could give a  check to Wellspring Advisors, they can give to Vanguard Charitable Endowment, they can give to Tides Foundation,” she said. “There are so many ways ACORN can obtain money through these anonymous donors  and some are connected to the Rockefeller  Fund.  So long as there is an agenda they are going to make sure that money is funneled to them anyway they can.”

Strom, who has done some excellent investigative pieces, should consider reactivating her old source. Her front page report raises some interesting questions about how the tax code can be used to complicate disclosure.

For example, Roger Colinvaux, a law professor at Catholic University in Washington is quoted here and suggests that the anonymity of the donors makes it hard to determine whether Mr. Berman was really representing industries. Berman in turn says that his non-profits provide the public with great educational services “and are thus no different from the organizations his groups attack.”

Since Berman has been exonerated from any wrongdoing by the IRS, the NYT should shift its focus back in the direction of ACORN, which has been called out by its own members for financial misappropriation. The House Oversight Committee has already published two very detailed reports about the organization’s shady operations that can serve as the basis for new reports.

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