Saturday, June 23, 2007

NYT Exposes Edwards: Poverty Center's Main Beneficiary Was Edwards

The New York Times, violating a rule not to hurt one's own, ran a article that revealed the truth behind John Edwards "poverty center" at UNC Chapel Hill. While the NYT had a glossed over title of "In Aiding Poor, Building a Bridge to 2008" clearly the bridge was using a non-profit to fund his campaign, travel, and broaden his exposure while he held no official office by claiming he was fighting poverty; he was certainly ensuring that poverty would never touch his own doorstep.

Directly from the horses mouth, the NYT:

Mr. Edwards, who reported this year that he had assets of nearly $30 million, came up with a novel solution, creating a nonprofit organization with the stated mission of fighting poverty. The organization, the Center for Promise and Opportunity, raised $1.3 million in 2005, and — unlike a sister charity he created to raise scholarship money for poor students — the main beneficiary of the center’s fund-raising was Mr. Edwards himself, tax filings show.

...Mr. Edwards, a former North Carolina senator, set out to keep his political options open by promoting issues he cared about, like poverty.

“He wanted to learn, travel and be in a position to be a viable candidate,” said J. Edwin Turlington, a Raleigh lawyer who was the manager of Mr. Edward’s 2003 presidential exploratory committee. “He had the ability to raise money to fund his activities. He had a vision, and he knew it would take money.”
Mr. Edwards mixed policy and politics in a way that allowed his supporters to donate to the causes he believed in — and to the organizations he had set up. He also set up two political action committees, something commonly done by politicians thinking of running for president.

But it was his use of a tax-exempt organization to finance his travel and employ people connected to his past and current campaigns that went beyond what most other prospective candidates have done before pursuing national office.

Now, besides the hefty fees he charged for giving speeches against poverty, recall the hedge fund Edwards went to work for that Edwards remarked was a 'way for him to learn more about poverty' -- from which he collect a hefty $500,000 consulting fee:

He was hired by the Fortress Investment Group, a New York hedge fund, to “develop investment opportunities,” according to a 2005 Fortress news release.

...“Fortress became a vehicle for foreign travel,” Mr. Turlington said, “but it was also a way to spend more time with sophisticated financial people.”

The "Poverty Center's" ...directors included Mr. Turlington, the Raleigh lawyer; Miles Lackey, Mr. Edwards’s former chief of staff; Alexis Bar, his former political scheduler; and David Ginsberg, Mr. Edwards’s current deputy campaign manager.

The Edwards campaign declined to disclose the amounts raised or spent by the two similarly-named nonprofit agencies — the Center for Promise and Opportunity and the Center for Promise and Opportunity Foundation — since their 2005 tax filings, which are the most recent to have been filed.

...Of the explicitly political entities, Mr. Edwards’ OneAmerica Committee 527 organization allowed donors to give without limitations. The money was transferred to his leadership political action committee. Leadership committees were initially created to allow prominent politicians to raise money for distribution to needy office-seekers. But Mr. Edwards spent the entire $2.7 million he raised for OneAmerica, including $532,000 raised by the 527, on himself, an increasingly common trend among politicians.

And this fianl last opinion quoted by the NYT: Nonprofit groups can engage in political activities and not endanger their tax-exempt status so long as those activities are not its primary purpose. But the line between a bona fide charity and a political campaign is often fuzzy, said Marcus S. Owens, a Washington lawyer who headed the Internal Revenue Service division that oversees nonprofit agencies.

“I can’t say that what Mr. Edwards did was wrong,” Mr. Owens said. “But he was working right up to the line. Who knows whether he stepped or stumbled over it. But he was close enough that if a wind was blowing hard, he’d fall over it.”

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