Better Government Association

Donations diverted to politicians

April 10, 2005
BY BEN FISCHER AND CHRIS FUSCO Staff Reporters
Chicago Sun-Times

When a Roman Catholic parishioner asked Cardinal Francis George about political contributions, George sternly denied money was being routed from collection baskets to candidates.

"The Catholic Church gives no money to political candidates," he wrote to the parishioner in 2000. "I don't know who gave you the idea that any parish or any agency has contributed to any particular political campaign. . . . We don't do it."

But a new analysis by the Better Government Association shows that a handful of Catholic churches -- along with dozens in other denominations -- are among a slew of Illinois not-for-profits that have given to politicians despite federal law banning such contributions.

All told, 220 tax-exempt churches, charities, universities and foundations have given $186,475 to state and local candidates and political organizations during the last five years. Baptist churches -- many of them on Chicago's West Side -- were the biggest group of givers, contributing about $52,000.

The gifts include cash, ticket buys for political fund-raisers and even college basketball tickets, the Chicago Sun-Times learned while researching the BGA's findings.

Archdiocese of Chicago Chancellor Jimmy M. Lago was surprised to learn of contributions by parishes including St. Sabina, St. Christina and St. Gregory the Great. He planned to remind their pastors that churches r isk losing their not-for-profit status if they're politically active.

Similarly, two Chicago aldermen who accepted money from not-for-profits immediately pledged to return the cash after being contacted by the Sun-Times.

In addition, the Illinois Attorney General's office, which helps regulate charities, plans to remind tax-exempt organizations of the rules.

Enforcement spotty

In many cases, it appears tax-exempt groups simply aren't paying attention to the law because IRS enforcement is spotty, and there's no state law banning state politicians from accepting the money, BGA leaders say.

In fact, as the Sun-Times was reviewing the BGA's analysis, the tax-exempt government watchdog group was sent invitations to fund-raisers for three state representatives: Raymond Poe (R-Springfield), Eddie Acevedo (D-Chicago) and Rich Brauer (R-Petersburg).

The BGA can't give politicians a dime.

"It's breaking the law," said Dan Sprehe, the BGA's chief investigator. "You have these organizations that provide so many services and are so important to their communities, and they're putting themselves at a huge risk."

All three representatives said they send invitations to everyone on the Secretary of State's lobbyist list, which doesn't distinguish nonprofit groups.

Baptist churches and other religious organizations on Chicago's West Side were prevalent on the BGA's list. The Christian Love Missionary Baptist Church, Community Christian Alternative Academy and Good Hope Freewill Baptist Church all contributed to Citizens for Action, a West Side group that works to elect Democratic candidates.

Citizens for Action was the biggest recipient of nonprofit donations, collecting $14,250. Ald. Michael Chandler (24th), who has close ties with the group, made no apologies. He said his campaign and Citizens for Action will continue to accept donations until being told otherwise.

How can you separate them?

The IRS declined to comment about specific groups, referring questions about tax-exempt organizations to its Web site.

"Over history, African-American institutions have always been involved with politics, going back to the civil rights era with the Southern Christian Leadership Conference and Martin Luther King," Chandler said. "I don't see how you can separate the two in my neighborhood."

Other tax-exempt groups said they've consulted with lawyers who have told them that, while giving directly to candidates isn't allowed, they can make contributions that allow members to attend political golf outings, dinners and other fund-raisers.

Such is the case at St. Sabina parish, which in October spent $2,500 to send several parishioners to a Navy Pier dinner honoring African-American leaders which was run by the 17th Ward Democratic Organization. In May, the church spent $1,500 to send volunteers to the same organization's golf outing.

"If it's an event where people are going and eating a dinner or golfing, I don't see a problem with that," said the Rev. Michael Pfleger, St. Sabina's pastor.

Chancellor says policy clear

But Lago, the archdiocese's chancellor, said archdiocese policy spells out that churches can't make campaign donations. They risk IRS fines or losing their tax-exempt status if they surface in state or federal campaign-finance databases, he said.

"My intention would be to call those parishes up and remind the pastor" of the law and church policy, Lago said. "The policy is we don't get involved in political, partisan activities."

Charities statewide will get another reminder soon from Attorney General Lisa Madigan, who plans to send them brochures on federal tax law, Madigan spokeswoman Melissa Merz said.

"This report is a valuable indicator that more education is needed when it comes to nonprofits making political donations," Merz said.

Aldermen giving theirs back

Along those lines, Ald. Ginger Rugai (19th) said she planned to promptly return $700 donated to her campaign in 2001 from St. Christina parish, which in 2004 was awarded two city grants worth up to $67,250 each to install environmentally friendly landscaping and a rooftop garden as part of a building expansion project. Rugai said she helped several groups within her ward get similar grants and added that the $700 played no role in helping the parish.

Also, Ald. Leslie Hairston (5th) said she will return donations from the tax-exempt University of Chicago in response to the BGA's findings, and a spokeswoman promised further changes to her fund-raising apparatus.

According to state records, the university has given $6,300 in cash and in-kind contributions to Hairston since 1999. University spokesman Larry Arbeiter said the donations were intended to support a back-to-school picnic Hairston hosts at the 63rd Street Beach each August where disadvantaged kids can get free school supplies.

However, at least some of the contributions went to Hairston's coffers, which then paid for the picnic, conceded Gerald McCarthy, campaign treasurer. In addition to returning the money, Hairston spokeswoman Delmarie Cobb said the alderman will establish a separate, non-political office to organize community events like the picnic in the future.

Also, in March 2001, Rep. Dan Brady (R-Bloomington) accepted $1,050 worth of tickets and hotel accommodations at the Missouri Valley Conference basketball tournament from Illinois State University, located in his district.

The Board of Elections database attributes the donation to the university itself. But ISU spokesman Jay Groves denied any wrongdoing, and said then-President Victor Boschini paid for the tickets with money from the university's private fund-raising foundation, which is tax-exempt, and then gave the tickets away.

But Thomas Pauloski, a federal tax lawyer with the Winston & Strawn law firm, and officials from the BGA both said that arrangement probably does violate IRS rules, because the tickets still had a cash value that was absorbed by the foundation.

Brady said at the time, he considered the tickets a personal gift. He said he listed the tickets on his campaign-finance reports as a precaution.

"We believe it's best to disclose things fully and let interpretation go where it may," Brady said.

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