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Alexander Used Nonprofit Network to Raise Money, Hone Issues

June 21, 1995

WASHINGTON (AP) _ In the two years before he entered the presidential race, Lamar Alexander raised $5.5 million, assembled a staff and tested his ideas in a television show beamed across the nation.

And he did it without having to deal with federal election laws that sharply limit the size of contributions and require that donors be identified.

In fact, the 13 biggest donors to Alexander’s effort each gave $100,000 _ 100 times more than the maximum donation they could give to his presidential campaign.

His vehicle was the Republican Satellite Exchange Network, a nonprofit group Alexander formed in 1993.

On the eve of his campaign announcement, Alexander disbanded the group but took some of its key staffers and ideas with him.

The group is still pursuing tax-exempt status with the Internal Revenue Service, so it won’t have to pay taxes on the donations. It declined several requests to identify the donors.

Alexander isn’t the only presidential candidate to benefit from a nonprofit. Fellow GOP hopeful Bob Dole recently closed his tax-exempt foundation amid criticism it was assisting his campaign.

Colleen Pero served as the Alexander network’s executive director when he was its chairman. Now she is general counsel for Alexander’s campaign.

She said that the nonprofit and the campaign were kept distinctly separate, that she reviewed every mailing to make sure ``presidential politics did not enter into the communications.″

But she acknowledged part of the IRS’ delay in deciding whether the network will get tax-exempt status involves questions about whether the group was merely a front for Alexander’s campaign.

``They kept coming back with questions,″ Pero said.

Alexander’s show was broadcast by the group from a different location each month, and its guests often included state and local officials and Republican activists.

Alexander has acknowledged that the network would benefit his campaign.

``I had to raise several million dollars to support the network, so that’s given me an opportunity to build the party and to create a political and financial base,″ he said in a December interview.

``And, most importantly, it’s given me a chance to focus on the issues, say what we’re for and develop my message for where we’re going to take the country.″

The network also gave Alexander a place to assemble a campaign staff.

IRS and Federal Election Commission records show at least three of its top officials now work for the campaign. They are Pero, whose husband, Dan, is the campaign manager; finance director Agnes Warfield, who held the same job at RESN, and assistant press secretary Kevin Phillips, who was the network’s spokesman.

At least four others who now help the Alexander campaign, including national finance chairman Ted Welch, were members of the network’s National Leadership Council.

A comparison of the two group’s literature finds another striking similarity.

Alexander’s positions on welfare, job creation and foreign policy _ laid out in campaign literature _ are copied nearly word-for-word from ``What We’re For,″ a glossy booklet published by the network in November.

Critics say organizations such as the network or Dole’s Better America Foundation are being used to avoid tough campaign finance laws adopted two decades ago after Watergate.

``What I think we are seeing ... is political candidates and leaders becoming somewhat more adept at creating ways that their political backers can deliver money to their personal political empires,″ said Josh Goldstein, director of the Center for Responsive Politics, a nonpartisan Washington group that studies campaign finance.

``It’s not necessarily a slush fund, but it’s a fund that allows them to develop their political ideas without adhering to those pesky campaign finance laws,″ he said.

Dole announced earlier this month he was closing his foundation after The Associated Press reported it had raised more than $4 million and was spending money on items useful to a presidential campaign _ a poll asking voters to identify important issues, a TV ad and glossy brochure featuring Dole, and issues papers.

On Wednesday, Dole’s foundation identified its donors and announced it would return leftover funds to them. Contributions included $250,000 from Pride 21 Corp. in New York and $225,000 from Koch Industries Inc. of Wichita, Kansas.

Pero said because RESN is a nonprofit, its decision not to identify donors was ``perfectly appropriate and legal.″

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