House Leader Tom DeLay's Political Fundraising in the Name of Charity Concerns Philanthropy Watchdog; NCRP Urges IRS to Deny Tax-Exempt Status

11/20/2003

From: Sloan C. Wiesen of the National Committee for Responsive Philanthropy (NCRP), 202-387-9177, ext. 17, sloan@ncrp.org

WASHINGTON, Nov. 20 -- The National Committee for Responsive Philanthropy (NCRP) today announced that it is urging the IRS to deny tax-exempt status to a new "charity" set up by House Majority Leader Tom DeLay, R-Texas, through which high-end donors can buy access to him and other powerful politicians by sponsoring lavish private dinners and parties at next year's Republican convention. While net proceeds would purportedly go to children's charities, a hefty share of the contributions to DeLay's Celebrations for Children Inc. would pay for fundraising events to reelect President Bush -- giving donors a tax-deductible way around the new campaign finance reforms banning "soft money" campaign contributions. In connection with DeLay's latest attempt to blur the lines between political fundraising and charity, NCRP today also renewed its call for a corporate philanthropic disclosure law. NCRP's actions followed widespread media reports exposing DeLay's operation.

"The new DeLay venture evades campaign finance laws through political fundraising disguised as charity," said NCRP Executive Director Rick Cohen. "This so-called 'charity' is set up to divide its contributions between helping poor children and electing the very politicians whose policies help keep those children impoverished. It goes beyond hypocrisy to so exploit exploited children in the name of helping them. This is as shameful as it is shameless, and the IRS should not grant Congressman DeLay's latest creation the tax-exempt status intended for true charities. To do so would further erode public confidence in the nonprofit sector, which is already struggling in the wake of scandals, a soft economy, increased human need and cuts in public funding."

NCRP, a watchdog for philanthropic accountability, also voiced deep concern about the congressman's overall long-term manipulation of the charitable giving laws for political purposes, and renewed its call for a change in public policy on corporate contributions to charity.

Currently, the congressman's DeLay Foundation for Kids is under no legal obligation to disclose the identities of its contributors, what access their contributions have bought them or the names of and perks received by politicians involved in its charity events. Corporations are also under no legal obligation to report the charitable giving they engage in outside of their corporate foundations. NCRP cited these areas of secrecy in reaffirming its longstanding call for Congress to pass a law promoting public disclosure of corporate charitable giving.

"Now that politicians are manipulating charitable giving loopholes to get around campaign finance reforms and access major corporate backers, the public has an even greater interest in having Congress pass the corporate philanthropic disclosure law to promote openness and accountability in corporate giving," said NCRP Executive Director Rick Cohen. "Political fundraising in the guise of charity does a disservice to politics and charity -- and, above all, to the vulnerable Americans that both ought to serve."

Founded in 1976, the National Committee for Responsive Philanthropy is dedicated to helping the philanthropic community advance the traditional values of social and economic justice for all Americans. Committed to helping funders more effectively serve the most disadvantaged Americans, NCRP is a national watchdog, research and advocacy organization that promotes public accountability and accessibility among foundations, corporate grantmakers, individual donors and workplace giving programs.

For more information on NCRP or to join, please visit http://www.ncrp.org or call 202-387-9177.