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Jesse Helms's honeypot;
Senator Jesse Helms' nonprofit organization mainly elicits money
The Nation
July 20, 1998

By: Baker, Russ

In his early days Senator Jesse Helms railed against nonprofit organizations and how they were used to divert otherwise taxable income to outrageous and unworthy--by which he clearly meant liberal--projects. Times certainly have changed. Today Helms has his own nonprofit organization--one that collects vast sums confidentially from corporations that have business before the Senate committees he chairs or dominates.

The Helms Center, based at Wingate University in a small town in Helms's home state of North Carolina, would pass almost no test of altruistic purpose, educational integrity or any other reasonable benchmark for charitable enterprises. Currently there is little more in the center's "museum" than a collection of mementos from the Senator's long career--a "Jesse Helms, Commander, Afghan Freedom Fighters" sweatshirt; birthday greetings from Presidents; and a huge red "No" rubber stamp lying on a replica of the Senator's Washington desk. The remaining aspects of the center include an untouched "archive" of Senator Helms's papers, a speaker's series bringing two political figures a year to the Wingate campus and a conference teaching high school students the winning ways of capitalism.

Indeed, it's not clear what the center's purpose is even for Senator Helms himself: a way of keeping his name before the public, a source of jobs for political friends and relatives, a backdoor method of raising campaign money or a cozy spot to which he can retire. What is clear, however, is that the Helms Center is an example of the increasing use of nonprofits by politicians for dubious ends. "Campaign finance reform will never work unless the ties between politicians and their 501(c)(3) nonprofits are broken," says Gary Ruskin, director of the Congressional Accountability Project. "It's a tremendous loophole."

At the end of 1996, the last year for which figures are available, the center had net assets of $ 6.2 million, compared with $ 3.8 million at the beginning of 1995. In 1996 the center took in $ 1.3 million and spent about $ 350,000. It declines to give the names of its supporters, who are solicited as if the whole thing were a real estate trust. ("Funding is private and you have many opportunities for investment," declares a new fundraising video.) In fact, contributors aren't always very concerned about the center's actual purpose. "Many of the corporations care not at all about the programs and goals of the center," observed one board member, a former RJ Reynolds tobacco executive, at a meeting some years back.

The Nation phoned dozens of large companies, and virtually every one declined to say whether it had given to the Helms Center. Nevertheless, over the past few years, various donation amounts have surfaced, and they are huge--dwarfing the federal campaign limit per election of $ 5,000 in PAC contributions and $ 1,000 in individual gifts.

In one year alone, Philip Morris gave the Helms Center $ 200,000. Other single-year amounts include $ 100,000 from the United States Tobacco Company and a staggering $ 750,000 from RJ Reynolds--on behalf of a senator who has been perhaps the industry's most vigorous advocate as senior member of the Agriculture Committee and other panels.

Other big donors include textile companies Milliken (its chairman, the archconservative Roger Milliken, is on the Helms Center board) and Burlington Industries; Du Pont; and the federal corporate felon Archer Daniels Midland. North Carolina banks have pumped in hundreds of thousands, perhaps for the interactive displays on the North Carolina banking industry planned for a Free Enterprise Center to be opened in an annex next door to the Helms Center. Two companies that get high marks for unusual candor were the Brown & Williamson tobacco company, whose spokesman confirmed donations but not amounts, and the drug giant Glaxo Wellcome, which told The Nation that it has pledged $ 150,000 over three years for the Free Enterprise Center.

Equally enamored of the center are foreign powers that: are legally prevented from donating to political campaigns. A year after Helms, chairman of the Senate Foreign Relations Committee, threw his enthusiastic support behind the Gulf War, Kuwait presented the center with $ 100,000. The center was so hopeful of foreign support that in 1992 it agreed to pay board member Howard Segermark a commission to solicit money from "non-U.S. citizens, foundations, and corporations." In 1993 the Taiwanese government gave $ 225,000; a former staffer told the Washington Post that the donation followed a conversation between the senator and a high-ranking Taiwanese official. (John Dodd, who became center president in 1994, says he put a stop to accepting foreign money.) Recently an official of the Singaporean government beat a path to Wingate to participate in a Helms Center function.

A donor who gives generously to the foundation may find his access to the senator considerably enhanced. On a Helms Center fundraising list, next to the name of United States Tobacco, a note reads, "Need to set up through Senator Helms' office." Next to the name of Universal Leaf Tobacco is written, "Need to facilitate activity through Senator Helms." Helms's campaign efforts may also benefit. For example, a board member received payments from the Helms campaign for "airfare" during the last election.

Far from its promise to be (in the words of its mission statement) "an independent, non-profit organization established to further the principles of democracy, the free enterprise system and moral values," the Helms Center scores only on the middle point. "To a great extent, the free enterprise system is freedom," explained center president Dodd during a visit from The Nation. The center's educational mainstay is a Free Enterprise Leadership Conference, where high school students hear from Helms's business cronies and learn to manage fictional corporations. For further information on capitalism, schoolchildren can visit the "museum," which opened in a stately house in 1994, and help themselves to piles of brochures from the corporate-funded, anti-union National Right to Work Committee. This year an archive will open on land next to the museum. According to former center archivist Jack Ralston (who was let go several years ago) Helms's papers, long boxed up on a landing in the Wingate University library, reveal little about what really goes on in Congress. "There were letters from constituents complaining about the weather or they weren't getting enough on their peanut crops," he recalls.

With its peculiar combination of business boosterism, Helmsgilding and programmatic junk food, the center stands apart from several other nonprofits dedicated to former and current Southern senators, and perhaps explains the increasingly arm's-length relationship with the university of which it is, on paper, a part. Helms Center documents state that Helms's senatorial papers are "owned" by Wingate University but managed by the center, which was originally to be on campus but eventually opened several blocks away. This arrangement contrasts sharply with the picture painted by university officials in the late eighties, when the Helms Center Foundation was gearing up. Arts and sciences dean Jerry Surratt recalls that dubious faculty were assured the center would emulate the respected Richard Russell Library for Political Research and Studies, which forms an integral research division of the University of Georgia's library system. In reality the Helms Center doesn't follow that model any more than it resembles the Strom Thurmond Institute of Government and Public Affairs at Clemson University--also tied to a standing senator--which contains both a research institute staffed by economics, political science, and sociology faculty, and a library mn by a professional archivist. Funding for the Thurmond institute comes from conservative private foundations (Annenberg and DeWitt Wallace) and government funds (the State of South Carolina, NASA and the National Endowment for the Arts), and it addresses serious research topics--population and retirement trends, community economic development, etc.

Although the Helms Center board includes several Wingate officials as figureheads, a quick look at the collective mug shots suggests what's really going on. At various times, the fifteen-member board has included the senator's wife, his daughter, a current Hill staffer and a former legislative assistant, two campaign treasurers and several large campaign donors. Helms's daughter is currently the vice chairwoman, and the chief of staff of the Senate Foreign Relations committee, Adm. James "Bud" Nance, retired, is board secretary. The staff is also not of conventional nonprofit caliber. Dodd, the center's president, previously ran a political fundraising firm in northern Virginia and worked on Helms campaigns. Estelle Snyder, the center's affable publicity person, previously worked at Wingate.

It may be disheartening that almost any pathetic excuse for a charity can attain nonprofit status, and that a powerful elected official can dance a deux in private with corporations seeking to curry favor, but it should not be surprising. So far, the tremendous growth of the charitable sector has not been accompanied by much will to scrutinize it. And the IRS has only a handful of inspectors to police thousands upon thousands of groups. True, a few operations have been successfully targeted. For example, the American Campaign Academy, run by Newt Gingrich's longtime adviser Joe Gaylord, lost its tax status in 1989 when the US Tax Court ruled that it was masquerading as purely educational when it was all about training GOP operatives; and an earlier Helms nonprofit, the Coalition for Freedom, was shut down by the IRS for running blatantly partisan activities. But these are exceptions. Meanwhile, in a more typical case, Jack Kemps conservative policy organization, Empower America, was granted tax-exempt status by the IRS in December, reversing an earlier ruling that the group's activities "substantially benefited the Republican Party and politicians affiliated with the Republican Party." To qualify as "nonpartisan," almost any shred of evidence was adequate--or example, Empower America showed the IRS a videotape it had produced on education reform that included Democratic Representative Charles Rangel, and an urban renewal discussion that featured Al From, president of the Democratic Leadership Council, and Democratic Senator Joseph Lieberman.

"Current law doesn't provide a very satisfactory way of sorting these things out," says University of Miami law professor Frances Hill, an expert on nonprofits and politics. One interesting development is a pending bill from Representative Paul Gillmor, an Ohio Republican, that would require large, publicly held companies to disclose their contributions to individual charities. Ironically, supporters seem primarily intent on stopping companies from giving to more liberal causes that do not advance corporate interests. So far a number of corporations have begun lobbying against the bill. Meanwhile, other national figures are setting up, or surely considering setting up, their own versions of the Helms Center. Should Senator Al D'Amato win a squeaker fourth-term race, one wonders what history lessons might be dispensed to schoolchildren wandering through anal D'Amato Center for the Advancement of Civilization--and what heretofore unthinkable mountains of cash might pass through it.

Russ Baker covers politics and media and is a contributing editor of The American Benefactor magazine. Research assistance was provided by Sarah Gordon.

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