roundtable: Freedom Foundation Faces Scrutiny

roundtable: Freedom Foundation Faces Scrutiny

Freedom Foundation Faces Scrutiny

W. Curtiss Priest (BMSLIB@mitvma.mit.edu)
Thu, 27 Apr 95 12:53:54 EDT 

Message-Id: <9504271655.AA25578@a.cni.org>
Date:         Thu, 27 Apr 95 12:53:54 EDT
From: "W. Curtiss Priest" <BMSLIB@mitvma.mit.edu>
Subject:      Freedom Foundation Faces Scrutiny
To: Telecommunications Policy Roundtable <ROUNDTABLE@CNI.ORG>


"Freedom Foundation Faces Scrutiny"
CITS Observations on attached article:
W. Curtiss Priest

For many on the internet who were suspicious
of the role of The Progress & Freedom Foundation
and Newt Gingrich, it appears that those suspicions
are well founded.

While spokespeople for Gingrich and PFF deny any
wrong doing, statements calling the House
Ethics Committee's investigation "malicious imbecility"
only make these people appear more worthy of scruitiny.


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POLITICS
Regulation, Legislation and Public Policy

Freedom Foundation Faces Scrutiny

By Brock N. Meeks
Inter@ctive Week

The Progress & Freedom Found-
ation--a conservative think tank that
has sought to become a major policy
player on telecommunications issues
--has come under scrutiny by the
House Ethics Committee and the
Internal Revenue Service for its close
ties to House Speaker Newt Gingrich.

Although the organization is
required by law to be nonpartisan,
PFF spent about 43 percent of its $1.5
million operating budget in support
of Gingrich-led programs, according
to the group's financial records,
obtained by Inter@ctive Week.

PFF is set up as a
nonpartisan, tax-
exempt organization.
The organization states
that is has no ties to any
political or ideological
organizations, according
to papers PFF filed with
the Internal Revenue
Service in 1993.

In those papers,
PFF explains that the
"organization will
engage in only nonpar-
tisan analysis, study and
research of broad cul-
tural trends."

That statement
appears to conflict with
the findings of a month-long Inter-
@ctive Week investigation. Among
I@W's findings:

y PFF spent $483,000 to under-
write a college course taught by
Gingrich.

y The Foundation also spent
$151,000 on a major lobbying effort
targeting the dismantling of the Food
& Drug Administration.

y Board member Jay Keyworth
also is corporate director for EON, a
Virginia-based company that makes
wireless set-top boxes. EON's own
press materials say that it is "spear-
heading the drive to win Federal
Communications Commission allo-
cation of spectrum for Interactive
Video Data Services."

y PFF spent $148,000 to under-
write The Progress Report, Gingrich's
weekly cable talk show carried on his
own National Empowerment
Television.

y Supporters heavily overlap with
those giving to Gingrich's latest
reelection bid. Ten percent of all PFF's
charter supporters contributed
$29,740 to the Gingrich reelection
campaign, according to Federal
Election Committee records.

The web of interlocking contrib-
utors between Gingrich-sponsored
programs and PFF extends further.
Gingrich encourages businesses to
pony up as much as $50,000 to
become "sponsors" of his Renewing
American Civilization cable-broadcast
college course. A $15,000 corporate
donor to Gingrich's course,
HealthSouth Corporation, is also listed
as a PFF charter member. HealthSouth
is prominently featured in a video
shown by Gingrich during the course.
In addition, the money paid by
PFF to air the cable program went, in
part, to the country's 11th largest cable
company, Jones Intercable. In return,
Jones donated between $150,000 and
$200,000 in free cable time to air
Gingrich's program. Jones also spent
more than $100,000 last year to lobby
Congress about various issues, not the
least of which is the fate of the Public
Broadcasting System.

These conflicts have raised the
concern of the House Ethics
Comrnittee, based on complaints by
three Democrats who claim accepting
the free cable time violates House rules
which state that members can't accept
gifts of more than $250 annually.

Inter@ctive Week has learned
that Ethics Committee Chairman
Nancy Johnson (R-Conn.) is looking
into the allegations surrounding the
links between the cable company,
PFF and Gingrich.

The PFF links to Gingrich and his
own political action committee, called
GOPAC, have drawn the interest of
the Ethics Committee and the IRS,
which is "reevaluating" PFF's nonprof-
it status, according to an IRS source.

The PFF link to Gingrich's rising
political currency has proved lucra-
tive. From March 1993 to March
1994 the group raised $611,000.
During the remainder of 1994, when
it became clear that the Republicans
stood a good chance to capture both
the House and the Senate for the first
time in 40 years, an additional $1.07
million poured into PFF coffers,
according to its financial records.

Many of those backing PFF in
the later half of 1994 are
longtime Gingrich back-
ers. In fact, the top-level
executive committee of
PFF is shot through with
old line Gingrich backers,
not the least of which is
PFF President Jeffrey
Eisenach, who is the for-
mer executive director of
GOPAC.

The latest PFF tax
returns do not make any
link to GOPAC or
Gingrich. Any such link-
ing would violate IRS tax
exemption rules. However,
Eisenach is on record
acknowledging that he did
the basic groundwork of setting up
PFF while running GOPAC.

PFF also answered "no" on its lat-
est tax returns to questions of whether
or not it had any association with
other political organizations.

Gingrich spokesman Tony Blankley
characterized the House Ethics com-
plaints about the relationship among
the Speaker, Jones Intercable and the
foundation as "malicious imbecility."
Gingrich said the Democrats who
raised the complaint--Reps. Patricia
Schroeder (D-Colo.), Harry Johnston
(D-Fla.) and Cynthia McKinney (D-
Ga.) -- are "vicious, vindictive" and
people "who smear mud."

PFF spokesman Bill Myers main-
tains that the group hasn't violated any
IRS rules:"The lawyers . . . made sure
our papers were in order." All IRS
requirements had been met to the
lawyers' satisfaction, he said. When
questioned about the links between
GOPAC and PFF, he said"there are
no connections."


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