by hilzoy
From the NYT:
“John Edwards ended 2004 with a problem: how to keep alive his public profile without the benefit of a presidential campaign that could finance his travels and pay for his political staff.
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.
A spokesman for Mr. Edwards defended the center yesterday as a legitimate tool against poverty.
The organization became a big part of a shadow political apparatus for Mr. Edwards after his defeat as the Democratic vice presidential nominee in 2004 and before the start of his presidential bid this time around. Its officers were members of his political staff, and it helped pay for his nearly constant travel, including to early primary states.
While Mr. Edwards said the organization’s purpose was “making the eradication of poverty the cause of this generation,” its federal filings say it financed “retreats and seminars” with foreign policy experts on Iraq and national security issues. Unlike the scholarship charity, donations to it were not tax deductible, and, significantly, it did not have to disclose its donors — as political action committees and other political fund-raising vehicles do — and there were no limits on the size of individual donations. (…)
Its directors included [“J. Edwin Turlington, a Raleigh lawyer who was the manager of Mr. Edward’s 2003 presidential exploratory committee” — earlier description from NYT article]; 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 $1.3 million the group raised and spent in 2005 paid for travel, including Mr. Edwards’s “Opportunity Rocks” tour of 10 college campuses, consultants and a Web operation. In addition, some $540,000 went for the “exploration of new ideas,” according to tax filings.
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.””
Discussion below the fold.
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