Posted on 11/29/2010 8:54:23 PM PST by Libloather
White House Refuses to Release Donors to David Axelrod's Charity
By John Cook
In 1998, White House senior adviser David Axelrod co-founded a charity aimed at curing epilepsy, which his daughter suffers from. It raised $800,000 last year from corporate and private donors. The White House won't say who they are.
**SNIP**
David Axelrod has no current official affiliation with CURE, but the organization's press materials describe him as a "CURE father and co-founder," and his White House bio says he "helped found" it. Susan Axelrod serves as CURE's chair, an unpaid position. Any viewer of Fox News piece, which is a moving account of their attempts to help their grievously wounded daughter, would understand that CURE is very close to their hearts. Which could make it fairly tempting way for the philanthropically inclined to gain access to the White House.
CURE raised $796,000 from corporate and individual donors last year and another $826,000 from foundations, according to financial statements accompanying its 2009 tax return, for a total of $1.6 million from private sources. None of those donors have been systematically disclosed, despite the obvious potential for an apparent conflict of interest were someone with a business or policy agenda before the White House to support CURE. When Gawker asked the White House for the identities of CURE's donors, a spokesman responded with a statement refusing to do so:
(Excerpt) Read more at gawker.com ...
Those who want to garner favors with the powerful can't just hand the official money.
Instead the official says, “wouldn't you like to give to my charity that is helping _______?” The donor then gives millions to the “charity” that has a board of directors controlled by the pol's friends.
The charity has awareness raising conferences twice a year in Tahiti or Los Vegas and needs to hire all kinds of staff and paid “consultants”.
The charity funds honorariums and gifts to consultants for their many favors in volunteering to pitch in and help the cause.
When the Pol is out of office, guess who is the Executive Director with the $300,000 a year salary?
The list, ping
Let me know if you would like to be on or off the ping list
EXCERPT But the Obama White House refused to comply with a Freedom of Information Act request from the Chicago Tribune for board minutes on the grounds that Freddie Mac was a “commercial” entity during the time Mr. Emanuel was a director, even though it was wholly owned by the government at the time the request was made.
December 23, 2009
Attorney General of the United States of America
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Attorney General Holder:
We write to demand an immediate investigation into the activities of White House Chief of Staff Rahm Emanuel. We believe there is an abundant public record which establishes that the actions of the White House have blocked any investigation into his activities while on the board of Freddie Mac from 2000-2001, and facilitated the cover up of potential malfeasance until the 10-year statute of limitations has run out.
The purpose of this letter is to connect the dots to establish both the conduct of Mr. Emanuel and those working with him to thwart inquiry, and to support your acting speedily so that the statute of limitations does not run out before the Justice Department is able to empanel a grand jury.
The New York Times reports that the administration is negotiating to double the commitments to Fannie and Freddie for a total of $800 billion by December 31, in order to avoid the congressional approval that would be needed after that date. But there currently is no Inspector General exercising independent oversight of these entities. Acting Inspector General Ed Kelly was stripped of his authority earlier this year by the Justice Department, relying on a loophole in a bill Mr. Emanuel cosponsored and pushed through Congress shortly before he left for the White House. This effectively ended Mr. Kelly’s investigation into what happened at Fannie and Freddie.
Since that time, despite multiple warnings by Congress that having no independent Inspector General for a federal agency that oversees $6 trillion in mortgages is a serious oversight, the White House has not appointed one.
We recognize that these are extremely serious accusations, but the stonewalling by Mr. Emanuel and the White House has left us with no other redress. A 2003 report by Freddie Mac’s regulator indicated that Freddie Mac executives had informed the board of their intention to misstate the earnings to insure their own bonuses during the time Mr. Emanuel was a director. But the White House refused to comply with a Freedom of Information Act request from the Chicago Tribune for those board minutes on the grounds that Freddie Mac was a “commercial” entity, even though it was wholly owned by the government at the time the request was made.
If the Treasury approves the $800 billion commitment to Fannie and Freddie by the end of the year, it will mean that under the influence of Rahm Emanuel, the White House is moving a trillion-dollar slush fund into corruption-riddled companies with no oversight in place. This will allow Fannie and Freddie to continue to purchase more toxic assets from banks, acting as a back-door increase of the TARP without congressional approval.
Before the White House commits any more money to Fannie and Freddie, we call on the Public Integrity Section in the Justice Department to begin an investigation into the cause of Fannie and Freddie’s conservatorship, into Rahm Emanuel’s activities on the board of Freddie Mac (including any violations of his fiduciary duties to shareholders), into the decision-making behind the continued vacancy of Fannie and Freddie’s Inspector General post, and into potential public corruption by Rahm Emanuel in connection with his time in Congress, in the White House, and on the board of Freddie Mac.
We also call for the immediate appointment of an Inspector General with a complete remit to go after this information.
We both come from differing political ideologies. One of us is the conservative head of a transparency foundation, and the other is the publisher of a liberal political blog. But we make common cause today out of grave concern for the future of our country in the wake of corruption-riddled bailouts. These bailouts continue to rob Main Street to benefit Wall Street, and, because of that, we together demand the resignation of Mr. Emanuel, a man who has steadfastly worked to obstruct both oversight and inquiry into the matter. Rahm Emanuel’s conflicts of interest render him far too compromised to serve as gatekeeper to the President of the United States. We will lay out the details further below, and are available at your earliest convenience to meet with you directly.
Sincerely,
Jane Hamsher
Grover Norquist
Tax-exempt nonprofits, charities, govt authorities, trusts, foundations, and unions, have the potential and may, in fact, be major money laundering conduits. They wrap themselves in all sorts of high-sounding causes while engaging in activities that are fraudulent and benefit insiders at the expense of law-abiding Americans. 501C’s are used to run just about every kind of fraudulent accounting schemes, some observers say.
As part of the Tax Exempt Compensation Enforcement Project, the Internal Revenue Service (IRS) intends to examine non-profit organizations (NPO), to learn more about the practices nonprofits follow as they fill out Form 990, the main public disclosure documents for charities and foundations, and whether accounting fraud and tax evasion is taking place, and whether the compensation of specific individuals is excessive, and whether instances of questionable compensation practices may evade IRS and banking and SEC laws.
The IRS will examine NPO insider transactions, such as (1) loans, the (2) sale, (3) exchange or (4) leasing of property to non-profit officers and others. In particular, the IRS will look to see how organizations report (5) “excess benefit transactions” on Form 990, and (6) executive pay.
News agencies reported some 2,000 charities will be reviewed under a new IRS enforcement effort to determine whether NPO are abusing their tax-exempt status. “We are concerned that some charities and private foundations are abusing their tax-exempt status by paying exorbitant compensation to their officers and others,” said IRS Commissioner Mark Everson. The IRS began the new enforcement project at the end of July and will continue through 2005.
The IRS has received complaints that 501C’s are being used to run just about every kind of off-the-books accounting fraud.
Concerns have also been raised that the IRS has been stymied in its efforts to penalize falsified tax documents and official financial instruments to cover-up theft, and the failure of individuals to report stolen money as income (stolen money is taxable).
Legal fees and administration fees, line items in most non-profit accounting reports, are well-used money laundering schemes that evade US taxes and use fraudulent accounting techniques to violate US banking and SEC laws. Placing phantom employees on the charity’s payroll is another well-used scheme.
One routine fraud is one charity writing checks to another charity as the MO to launder tax-exempt money for themselves. The recipient takes a cut then kickbacks the remainder to the checkwriter.
Thanks for the info.
Right there is a "problem" which is present in all Third Way / "public-private enterprises" / affirmative action programs / preferential contracts (e.g., unions).
Freddie Mac and Fannie Mae were never a purely "commercial" entities, they were created and sponsored and backed up by the U.S. Government and they acted and received special beneficial treatment (such as borrowing at lower interest rates) because they were GSEs. As Government-created, Government-sponsored entities they were and acted as direct instruments of government housing policies. Remember the political hue and cry about "Haliburton!" which was just a contractor of services that government occasionally needed and contracted for on "as needed" basis? A far cry, in terms of size, influence, preferential treatment or institutional corruption, from the Feddie (Fannie+Freddie) who served as government-created and government-supported direct instruments of policy, with a high potential of conflicts of interest.
In 1938 President Franklin Roosevelt created Fannie Mae as part of the government-owned Reconstruction Finance Corporation; its mandate was to buy FHA (Federal Housing Administration) loans. Fannie Mae began buying VA (Veterans Administration) mortgages in 1948. It was rechartered as a public-private, mixed-ownership corporation in 1954. The Housing Act of 1968 divided the corporation into the Government National Mortgage Association (Ginnie Mae, which retained explicit government backing) and Fannie Mae, which went public (with only an implicit US guarantee). Fannie Mae retained its treasury backstop authority. In 1970 Congress created Freddie Mac (Federal Home Loan Mortgage Corporation) and enlarged Fannie Mae's field of action to include conventional mortgages. In 1984 Freddie Mac issued common shares to members of its overseer FHLB and in 1989 started trading on NYSE under the symbol FRE.
Freddie Mac re-audited its earnings from 2000 to 2003, because their auditors uncovered accounting irregularities and employee misconduct. Further investigations, executive oustings, restructuring, and numerous lawsuits followed. In late 2003 Freddie Mac announced the findings of its re-audit. The company admitted to understating earnings by $4.4 billion between 2000 and 2002 and overstating profits by $989 million in 2001, all in an attempt to smooth out results and show steady profit growth.
In 2006 the company paid a record $3.8 million fine to settle allegations by the Federal Election Commission that the company made illegal campaign contributions to members of the US House Financial Services Committee. It also agreed to pay $4.65 million to settle a lawsuit related to its employee 401(k) plan.
Freddie remains a central element in the government efforts to make housing affordable. In 2009 it introduced the Home Affordable Modification Program (HAMP) and Freddie Mac Relief Refinance Mortgage programs, which have helped hundreds of thousands of borrowers avoid foreclosure. Unfortunately, defaults didn't stop and in 2010 Fannie and Freddie together owned more than 160,000 foreclosed homes.
Until 2003, Fannie Mae has not been filing SEC reports, but in response to increasing demands from competitors who thought Fannie was in bed with federal government, Fannie registered its common stock with SEC, which helped uncover the violation of accounting rules for public companies. Chairman and CEO Franklin Raines, CFO Timothy Howard, Controller Leanne Spencer and auditor KPMG were ousted in December 2004 after the SEC determined Fannie Mae had violated accounting rules. The inquiry was prompted by accusations Fannie Mae had manipulated earnings; earnings from 2001 through 2003 were restated and those from 2004 and 2005 were each released more than a year late.
Predictably, the companies contributed to the financial crisis in their mission to provide housing funds to more citizens, which was accomplished by relaxing lending standards, mandated and enforced under the Community Reinvestment Act of 1977. In September 2008, due to losses related to the subprime mortgage crisis, the federal government seized and placed both Fannie and Freddie into conservatorship. Also in 2008, the Federal Housing Finance Administration (FHFA), was created to oversee Fannie and Freddie, as well as the 12 Federal Home Loan Banks (federal banks that fund housing and urban development projects).. The FHFA was granted more authority than its predecessor agencies, the Federal Housing Finance Board (FHFB) and the Office of Federal Housing Enterprise Oversight (OFHEO)).
So either way WH wants to play it, they will lose... information will come out, it's just a matter if they want to be even more embarrassed for trying to cover up Rahm's history on the Freddie BOD.
G-r-e-a-t research——thanks.
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