Since ProPublica published its investigation last week into the practices of the pro-troop charity Move America Forward, officials with the group have stepped forward to defend it.
The 10-year-old charity says its main work is raising funds to send care packages to American troops in Afghanistan. Launched in part by Sal Russo, a political consultant who would become one of the most prominent figures in the Tea Party movement, the charity has won support from high-profile conservatives in politics and entertainment.
Our story reported that Move America Forward had misled donors and funneled millions to charity insiders and their businesses, according to tax records, fundraising appeals, other documents and interviews.
Over the last week, Russo, the charity’s chief strategist, spokesman Danny Gonzalez and director of outreach Scott Raab have given statements or interviews to other news outlets responding to the article (they have declined to speak with ProPublica). They’ve confirmed several of the story’s main findings, but insist the charity’s fundraising appeals are legitimate and its spending is in accord with rules for nonprofits.
Here’s a rundown of some of the story’s key points and the explanations offered by Move America Forward officials about them:
The fund drive for the Marine battalion that wasn’t in Afghanistan
In February 2013, Move America Forward launched a drive to raise money to ship care packages to a 1st Marine Division battalion nicknamed Geronimo, which was purportedly deployed to Afghanistan. That March, the charity claimed it had sent packages to all 800 of the battalion’s members in the war-torn country. But that couldn’t have been true, our story said: At the time, the Marines of Geronimo were actually in Okinawa, Japan.
Raab told the website RedState that while some members of the unit could have been stationed in Okinawa, “the unit members that we sent packages to were deployed in Afghanistan.” He also said Bill Durdin, the 1st Marine Division’s family readiness officer, had told ProPublica this, only to be ignored.
But Durdin did not provide ProPublica with the information on the unit’s location — 1st Lt. Spencer Kenyon, the unit’s public affairs officer, did. Kenyon confirmed that the battalion was deployed to Okinawa from November 2012 to May 2013. According to Capt. Alfred H. Reynolds, the 1st Marine Division’s public affairs director, after that the unit went to Camp Pendleton in California.
Using borrowed images in fundraising appeals
Our story said that Move America Forward has sometimes used images taken without permission from other charities, media sites, stock photo outlets, and even soldiers themselves in emails soliciting donations.
In some cases, Move America Forward’s appeals featured photos of smiling soldiers with care packages, without making clear that the packages had come from other charities such as AdoptAPlatoon and Operation Gratitude. One Move America Forward email featured a Marine named Larry Draughn, who had lost his legs fighting in Afghanistan and told ProPublica he had never heard of the charity or given it permission to use his story to solicit funds.
Gonzalez acknowledged to RedState that the charity never got Draughn’s permission to use his story, but maintains it never implied he endorsed the charity. After the Marine’s family contacted Move America Forward, it removed material about him from its website.
Gonzalez also acknowledged Move America Forward had borrowed images, which he explained as a financial necessity. “We don’t have the resources to send photographers all around the world so we rely on using publically posted photos to help tell the story, but we are never disingenuous about it nor do we ever claim that we took such photos ourselves,” his statement said.
But Carolyn Blashek, the founder of Operation Gratitude, said the image that Move America Forward took from her group’s website was provided for free by soldiers as a “thank you” for the care packages. She said using another charity’s photo was a dishonest way to approach donors.
The non-existent partnership with Walter Reed
In a press release issued last year, Move America Forward claimed to have a partnership with Walter Reed National Military Medical Center to send special wounded warrior care packages.
But a Department of Defense spokeswoman told ProPublica that it doesn’t endorse or partner with any charities, and Move America Forward is not included on the Defense Department’s list of charities that have met certain criteria, such as being nonpartisan and having a good rating from a charity-rating organization.
Walter Reed received a one-time donation of 200 care packages from Move America Forward in March 2013, according to a hospital spokeswoman.After ProPublica contacted Walter Reed, the hospital asked Move America Forward to remove the press release announcing its partnership.
Gonzalez and Raab said Move America Forward had worked closely with Walter Reed officials to put together care packages for recovering veterans, but admits it wrongly used the word “partnership” and has stopped using the word. The charity said it has visited wounded troops at the hospital and sent care packages there, and that criticism of its use of the word “partnership” is unfair.
Payments to companies run by charity insiders
Our story said that, according to tax filings, Move America Forward paid $2.3 million to Russo and his political consulting firm, Russo, Marsh and Associates, from 2008 to 2012 for services including “program management and advertising.” This constituted about 30 percent of the charity’s overall expenditures over that time.
We also found that the charity’s website used two companies to process credit-card donations — The Campaign Store, founded by Russo, and DonationSafe, founded by Shawn Callahan, Move America Forward’s former executive director. The charity’s records do not say how much it has paid the companies for this service.
Move America Forward officials did not dispute the payments to Russo and his firm. In the statement to RedState, Raab said the charity was reimbursing Russo for buying items that went into Move America Forward’s care packages. The charity lacked sufficient credit, Raab said, so it had to rely on consultants’ credit cards for big purchases.
In an interview that aired on Sirius satellite radio, Russo said he’d often make purchases of $20,000 worth of coffee or $15,000 worth of Gatorade for the charity and that these reimbursements accounted for 90 percent of what the group paid him and his firm.
A former consultant for the charity told ProPublica that the items in the care packages were donated, and those payments and alleged reimbursements were never reported on the charity’s tax forms.
Gonzalez told the website Hot Air that DonationSafe and The Campaign Store provided the charity with valuable services at competitive prices, but did not specify how much Move America Forward had paid them.
Tax experts said the IRS sees it as a red flag when charities steer business to for-profit firms run by insiders. The IRS would try to figure out if the arrangement was reasonable by asking how much the charity was paying and if it was the firms’ only customer, said Bruce Hopkins, a nonprofit lawyer in Kansas City.
Charities can reimburse consultants for valid credit card expenses, as long as they appropriately account for it in tax returns, said Lloyd Hitoshi Mayer, a law professor and associate dean at the University of Notre Dame who specializes in nonprofits and campaign finance.
Using charity assets for political purposes
Charities like Move America Forward, which accept tax-deductible donations, are not allowed to engage in politics like other nonprofits, such as trade associations and social-welfare groups. In its 2004 application for tax-exempt status, Move America Forward told the IRS that it would not directly or indirectly share facilities, equipment, mailing lists or other assets with any political organization.
Our reporting found that in 2012 Move America Forward appeared to have covered the rent for at least two political action committees, as well as Russo, Marsh and Associates, The Campaign Store and DonationSafe, all of which share its Sacramento office suite. (The charity also appeared to have subsidized the PACs by allowing them to use its mailing list.)
In his statement to Hot Air, Gonzalez acknowledged the charity paid the rent for all of the occupants of the office suite. He said the agreement did not violate the tax code because the charity uses most of the space and the other companies pay smaller bills for internet service and printer toner. He added that it would be “way too confusing” to figure out how much of the printing or internet cost each entity used and split the costs that way.
Experts on nonprofits said the IRS might accept such an arrangement, but would want to see methodical accounting and tracking of expenses to prove it was fair.
“I don’t know why it’s confusing to them when there are many, many affiliated nonprofits who have to do it,” said John Pomeranz, a Washington lawyer specializing in election activity by tax-exempt groups.