June 22, 2007

A Nonprofit to Support Sen. Edwards

There may not be comic strips in the NY Times, but this story on Senator John Edwards has a laugh a minute.

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.

The Center for Promise and Opportunity! Stop it! You're killin' me!

A nonprofit to finance the promise, opportunity and extreme styling needs of one of our nation's richest tort attorneys. Audaces fortuna juvat, baby!

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. And according to experts on nonprofit foundations, Mr. Edwards pushed at the boundaries of how far such organizations can venture into the political realm. Such entities, which are regulated under Section 501C-4 of the tax code, can engage in advocacy but cannot make partisan political activities their primary purpose without risking loss of their tax-exempt status.

Hat-tip: Insty, who points out "[T]here are two Americas: Those who manage to enrich themselves by exploiting legal technicalities, and those who do not."

Politics Posted by John Kranz at June 22, 2007 1:28 PM