RSS Feed MenuDebbie Schlussel posted a long piece last evening about a charity that Sean Hannity is affiliated with, accusing them of malfeasance and mismangement.
FrumForum has done an exhaustive investigation of the charity in question, Freedom Alliance, and found enough evidence to substantially rebut each of Schlussel’s claims. I’ll approach them one by one.
Schlussel Accusation: Sean Hannity improperly benefited from Freedom Alliance by charging private jets, hotel stays and luxury cars.
Freedom Alliance’s press release today stated categorically that they have “never provided planes, hotels, cars, limos, or anything else to Sean [Hannity] … to be clear Sean pays for all his own transportation, hotels, and all related expenses for himself and his family and friends and staff.” We are satisfied that this is true.
It is true that Freedom Alliance spent $60,000 on aviation services in 2006, but there is no evidence that this was for Sean Hannity’s benefit, and it seems unlikely that the money was used to lease a Gulfstream 5. Rates for G5 aircraft average around $8,000 an hour. $60,000 would not buy much at that rate.
We have also been able to confirm that Sean Hannity has no operational control over the organization. Nor is he even a member of the group’s board.
If Schlussel stands behind her statement, then she will have to do better than a quote from a blind source, who is, as she admits, a friend of a friend.
Schlussel Accusation: Too Little of Freedom Alliance’s Spending Has Gone to Program Outcomes.
FrumForum has intensively investigated Freedom Alliance’s 990 Forms, which have been submitted to the IRS and checked by an independent auditor.
Debbie Schlussel alleges that only $1 million of the organization’s $8.8 million in revenue was going to soldiers and scholarships in 2008. This figure is the product of a misleading and selective reading of the organization’s tax forms.
The numbers that Schlussel cite refer to direct financial transfers to individuals – that is, if there is a direct grant that Freedom Alliance gives to a soldier. This does not include all the positive work that doesn’t involve a direct grant.
Freedom Alliance also spends money on non-cash benefits for military families, involving things like taking soldiers to sporting events and sending care packages to troops.
The highest paid employee earned $152,000 in 2006. The second highest paid employee earned $83,000. In 2007, Freedom Alliance spent about $1 in $7 on salary and benefits.
Total staffing costs may seem high, but they are not out of line with what is spent at many other charities. For example, the Armed Services branch of the YMCA spent about $1 in $2 on salaries and benefits in 2008.
Schlussel Accusation: Soldiers Get Grants of Very Low Value
Schlussel is unhappy with “the fact that in each year’s tax returns soldiers described as having brain trauma injuries, multiple amputated limbs, and severe burns over most of their bodies get a few hundred bucks each from Freedom Alliance and in almost every case, no more than $1,000.”
However, this accusation is much weaker when you examine the Department of Defense regulations regarding donations to active duty soldiers.
According to the DOD Joint Ethics Regulation, gifts with a value of over $1,000 must go through a lengthy bureaucratic process which involves ethics officials. Calls to the Department of Defense confirmed this point.
What becomes clear is that there is a bureaucratic process to get approval from an ethics official, and that the costs of working through the bureaucracy for this purpose may want to be avoided by a charity, especially one that is working in a lot of other areas.
Schlussel also decries Freedom Alliance donations of less than $1,000, complaining for example that Freedom Alliance only gave $200 to a serviceman who lost both legs and his left arm. FrumForum has determined that lower-value grants like these are approved for specific purposes, often requested by a DOD case officer. This applies to cases where, for example, a serviceman may need a bus ticket home to visit his family.
The sums may seem small, but a soldier who is already receiving a government benefit may greatly value an airline ticket that goes above and beyond the Department of Defense’s budget.
Schlussel Accusation: Too Little Money Is Being Spent on Scholarships for Children of the Fallen
Schlussel complains that “167 students got an average of just $4,803.89 each in tuition. With the amount this charity raises, these kids should all be getting a free ride paid for by Freedom Alliance.”
The scholarships that she is referring to are considered and approved annually, meaning that a freshman can qualify for about $20,000 over four years.
Further, $4,800 covers more than a year’s tuition at an average Catholic private school and a substantial portion of tuition at many colleges. For example, it nearly covers a year’s tuition at the University of Georgia ($4,900), and covers about a third of a year’s tuition at the University of Michigan ($11,600 for freshmen, $13,000 for upper-classmen).
Overall, Freedom Alliance raised $2.1 million for scholarships in 2008. About $800,000 of that went to scholarships for that year. Schlussel claims that the remainder, “$1,238,636 – all of which was supposed to go to scholarships for these kids of the fallen – went to Freedom Alliance.”
FrumForum was able to confirm with Freedom Alliance that the $1.2 million that Schlussel cites did not go into the general Freedom Alliance revenues, but instead to the organization’s Scholarship Trust Fund.
Why didn’t Freedom Alliance spend all of its $2.1 million on scholarships that year? Considering your average active duty combat soldier is in his mid-20s, many fallen soldiers have children that are not of age to go to college. Saving a substantial part of funds is simply good planning – the process of funding children of the fallen will continue for fifteen to twenty years. The organization’s trust fund now stands at around $15 million.
Schlussel Accusation: Freedom Alliance’s Postage Costs Are Too High
Debbie Schlussel complains that Freedom Alliance spends too much on postage. Freedom Alliance’s listed cost for postage was $775,599 in 2008, which may seem high given their overall expenses. However, Freedom Alliance sends care packages to active duty soldiers in Iraq and Afghanistan, which explains a good deal of the cost behind the postage figure.
Comparing Freedom Alliance to other groups that specialize in sending care packages, Freedom Alliance’s expenditures seem ordinary. For example, Operation Gratitude is a group that specializes in “sending care packages addressed to individual Soldiers, Sailors, Airmen and Marines deployed overseas.” When reviewing their tax forms, FrumForum found that they spend similar amounts on postage. Operation Gratitude spent $773,680 in 2008; Freedom Alliance spent $775,599.
* * *
A day of hard work by Tim Mak and Noah Kristula-Green was able to debunk the charges Debbie Schlussel levied against Sean Hannity.
Tim and Noah worked through IRS forms and comparisons with other charities to conclude that Freedom Alliance does not spend the money it raises on lavish living.
There are other questions of course: After all, only a small portion of the money spent on tickets to “Freedom Concerts” is received by the Freedom Alliance. If say a $40 ticket yields a $4 donation to Freedom Alliance, we can’t vouch for what happens to the other $36. Some must pay for rent of the stadium for example. We have only the written record and what we could find by asking questions.
If people wanted to suggest that a concert is not a very efficient way to raise money for a good cause, they might have a point. The Washington Post reported in 2007 that many military charities spend too much on fundraising expenses. If you were asking my advice about how best to aid wounded soldiers, I’d suggest you give to Fisher House. That’s where President Obama chose to direct a good portion of his Nobel Prize money.
But we were dealing with a specific allegation – not of inefficiency – but of corruption. Schlussel charged that Hannity supported a lavish lifestyle with charitable gifts. And that’s the charge we think we have rebutted.
Posted at 7:25pm by David Frum
Follow Tim Mak on twitter: @timkmak
DebbieSchlussel // Mar 19, 2010 at 5:50 pm
So, Hannity got to David Frum like he did the rest of the conservatives that David claims he’s different from. So sad. I guess Hannity told David what I’ve heard he’s told others: that he’ll never be on FOX News again unless you run his side of the story and retract mine.
I fail to see how since David’s last post on this at 3:00 p.m., his site has suddenly did an “exhaustive investigation” in two hours. And that’s why Tim Mak is feverishly posting his “exhaustive investigation” piecemeal, b/c he’s still, um, “investigating.” My facts–all taken from their tax forms–cannot be refuted. You are likely regurgitating the Freedom Alliance CYA statement, which contains more lies and obfuscation but zero refutation.
So, here’s my response to that:
In fact, the Freedom Alliance “response” doesn’t answer any of the questions I raised and goes on to lie more. They don’t address why they gave a triple amputee only $200—and in fact there are many of these examples provided in their tax return addendum, but I only cited a few for brevity’s sake. They also lie and claim that they gave a lot more money to charity b/c they categorize it as “program expenses.” But I’m sorry—calling $3 million in consulting fees, printing, and postage “program expenses” doesn’t change the fact that it still went to their cronies, not to a fund and not the soldiers who only got on average less than $900 apiece. It also doesn’t change the fact that out of the money spent (I didn’t use the money they claim they raised for their scholarship fund) the vast majority goes to those kinds of expenses.
Also, the “scholarship fund” is really a war chest for something else. We’ve been at war since 2001, when we went into Afghanistan, and we’re winding down in Iraq. Unless the kids were born in 2001 or thereafter, many of these kids are in college now and Freedom Alliance is giving them a pittance toward their college tuition, while they continue to build this massive warchest. With a giant multi-million dollar fund, why aren’t they giving the kids a free, complete ride to college? And how many kids of deceased troops will there be in the future? Enough to exhaust a multi-million dollar fund? Doubtful.
Moreover, because they hoarded millions of dollars, their returns show the fund shrunk by several million dollars with bad investments and market losses. That money could have put these kids through college for the entire time. What’s their excuse for the soldiers with no limbs and with severe burns? Are they waiting for two decades from now when technology is better? $165 for a soldier who is blind and his face blew up? No excuse for that. Their “response” is simply a non-response and an attempt to cover up the fraud.
DS
Norwegian Shooter // Mar 19, 2010 at 6:01 pm
“We are satisfied that this is true.”
I agree, categorical statements of press releases are always true. This is America, after all. But the royal “we”? That’s a bit too monarchical for me.
DebbieSchlussel // Mar 19, 2010 at 6:02 pm
Ha! Your “exhausting [sic] investigation” involves believing what’s in a CYA press release by the malefactor at issue. Hilarious. Remind me never to hire you as my private investigator.
The American Spectator : AmSpecBlog : Schlussel's Hannity Smear Debunked // Mar 19, 2010 at 6:07 pm
[...] Mak at FrumForum is debunking each of Debbie Schlussel's allegations against Sean Hannity and Freedom Alliance. (For some reason [...]
MSheridan // Mar 19, 2010 at 6:12 pm
It appears likely to me that Hannity’s expenses were paid for out of proceeds of events advertised as Freedom Works benefits, but did not come out of the very small part of the proceeds dedicated to Freedom Works. This would probably break no laws, and Freedom Works would be able to categorically (if somewhat disingenuously) say that they had not paid his travel and lodging expenses. If I’m right, though, I’d hardly call Hannity “Sanitized.”
TerryF99 // Mar 19, 2010 at 6:15 pm
Whitewash as usual. You are ignoring the evidence.
Thomas Kilgannon is the President, he claims on tax form to work 70 hours per week,bringing in $152,238!
Here’s a few more tidbits:
Bruce Eberle and Associates are the Educational Outreach Cons, bagging $246,232 a year! Janet A Fallon is the Event/Conference Production “ADVISOR”,also bagging a cool $101,000 a year! Kathleen Rothschild is the Program Mkt. Director,barely clearing $75,750 a year, on a 40 hour work week! It goes on and on!
Eberle’s fund-raising activities have also drawn repeated charges of ethical misconduct, the most notorious of which was a campaign in the 1980s that used phony prisoner-of-war sightings to solicit money from veterans for former Air Force Col. Jack Bailey’s “Operation Rescue,” which claimed to be on the verge of saving American POWs still being held in Vietnam. One solicitation took the form of a “handwritten letter” signed by Bailey, who claimed to be writing from aboard his rescue ship, the Akuna III. “Please excuse the handwriting. But I’m writing at a makeshift desk on the deck of the Akuna III,” the letter read. “The China sea is tossing and rolling.” In reality, the letter had been written by Eberle, not by Bailey, and the Akuna III (which was not even seaworthy) had been docked for more than two years.
Eberle’s direct mail appeals enabled Bailey’s group to raise $2.2 million between 1985 and 1995, of which 88% was actually spent on “fund-raising expenses” instead of rescue missions (and of course, no rescue mission ever actually succeeded in rescuing anyone). When these facts surfaced during a Senate committee hearing, the revelations prompted outrage from Vietnam veterans on the committee including John Kerry, who termed the operation “fraudulent, disingenous and grotesque.”
Republican Senator John McCain offered similar sentiments. “In my opinion they are criminals and some of the most craven, most cynical and most despicable human beings to ever run a scam,” McCain said. “They have preyed on the anguish of families, and helped to turn an issue which should unite all Americans into an issue that often divides us.”
Eberle simply shrugged off these charges, claiming to have “one of the highest reputations for integrity in the business.”
They burned through about 1/3 of the fund money in a single year while disbursing only $306,000 in scholarships.
At that rate, they’ll give out a total of $1 million before the current funds are entirely depleted.
TerryF99 // Mar 19, 2010 at 6:18 pm
A typical concert tickets reads thus.
WHERE: COORS AMPHITHEATRE IN CHULA VISTA, CA.
2050 Entertainment Circle, Chula Vista, CA 91911
WHEN:Thursday – July 26, 2007 7:30 PM (Doors open at 5:30 PM)
TICKETS: Prices: $38.00 – $78.00 PURCHASE TICKETS »
The following fees are included in the above ticket prices: $4.75 facility fee, $4.25 parking fee, and a $4.00 donation to the Freedom Alliance
So out of a typical ticket at say $50 only $4 goes to the freedom alliance. What happens to the other $45?
H/T DK
Norwegian Shooter // Mar 19, 2010 at 6:25 pm
“Freedom Alliance also spends money on non-cash benefits for military families, involving things like taking soldiers to sporting events and sending care packages to troops.”
How much do they spend on non-cash benefits? That should be included in cash-value dollars on any charitable reporting. As Ballon Juice reports, http://www.balloon-juice.com/2010/03/19/a-real-scoop/
“Where the f*** were these guys when a Kos diarist outed Hannity’s charity, or when the Washington Post reported that most of these charities were scams, in 2007?
Update: The head of the foundation, Ollie North, issued a press release [pdf], denying everything. The Post story is based on a 2007 report by the American Institute for Philanthropy. They gave Freedom Alliance, the charity Hannity was pimping, an “F”.
MSheridan // Mar 19, 2010 at 6:25 pm
Typo above: instead of Freedom Alliance, I mistakenly typed in Freedom Works. My apologies for the mistake.
On the other hand, Mr. Mak claimed FrumForum conducted an exhausting investigation, when I suspect the word he intended was “exhaustive.” I hope I won’t seem a rudesby if I say that either way I find it difficult to believe.
ottovbvs // Mar 19, 2010 at 6:55 pm
David for what it’s worth you might want to take pause over this. It’s a charity, they are required by law to release all sorts of financial info (I’ve sat on the board of one) and given Mr Hannity’s visibility this is probably going to become a cause celebre in blogland and ultimately the MSM many of whom aren’t exactly fans of Fox News. I suspect Ms Schlussel is going to acquire all kinds of professional “help” as this assumes greater visibility so Mr Mak as your designated “investigator” seems a slender reed on which to base your reputation.
ottovbvs // Mar 19, 2010 at 7:21 pm
TerryF99 // Mar 19, 2010 at 6:18 pm
……As a follow up to my advice to David, I’d actually say rather the same to yourself and others who have picked this up……to be honest I have no idea who this woman is but I assume she’s a conservative activist of some kind……on the basis of the couple of extracts you’ve flashed up it looks fishy but you might want to let events unfold for a day or two before conclusively finding these guys guilty on all charges……once the healthcare excitement exits stage left I suspect this is probably going to take center stage
Norwegian Shooter // Mar 19, 2010 at 7:58 pm
“What becomes clear is that there is a bureaucratic process to get approval from an ethics official, and that the costs of working through the bureaucracy for this purpose may want to be avoided by a charity, especially one that is working in a lot of other areas.”
What costs would those be? Postage? I’d be surprised the DoD charges a processing fee, but there are stranger things out there. In any case, please report what these costs are. And “… working in a lot of other areas” makes no sense. However, “… especially one that is spending an exorbitant amount on overhead already” fits nicely.
General comment on “that goes above and beyond the Department of Defense’s budget.” Isn’t it amazing that a plane trip home for an injured service member is above and beyond DoD’s budget, but hundreds of bases worldwide are within it? What are we defending across the entire globe?
Schlussel Humiliates Self With Baseless Hannity Smear | Bucks Right // Mar 19, 2010 at 8:04 pm
[...] R. Emmett Tyrrell, Jr., a follow-up by Tabin and finally a full apology by Tabin that links to FrumForum’s complete, point by point debunking of the original Schlussel [...]
Norwegian Shooter // Mar 19, 2010 at 8:06 pm
“The organization’s trust fund now stands at around $15 million.” Only $1.2 went in this year. How many years did this take to build to $15 million? What percentage of giving was divided between current gifts and deposits into the trust fund? What is the trust fund invested in? (I would hope it’s government bonds.) How much is the trust fund paying in money management fees?
Exhaustive? I don’t think so. An afternoon can’t cut it.
Web Admin, there is no button to submit Profile Changes. Also, the Blue/Orange FrumForum is annoying!
briancobbs // Mar 19, 2010 at 8:36 pm
I just read the original smear against Hannity, and registered to call David out for merely referencing the Freedom Alliance press release without pointing out that it contradicted every single one of Debbie Schlussel’s libelous claims.
Good for you David, for doing an investigation and coming up with the truth. This isn’t even a grey area; Debbie Schlussel was more full of shit than Obama was when he said premiums will go down by 3000%.
And Debbie – you need to realize that when you’re in a hole, stop digging.
You claimed that Hannity gets lavish limo service, flights, and favors from Freedom Alliance; you lied. You weren’t off by a few percent or a few thousand dollars; read the press release exposing you for the liar that you are. He doesn’t get a damn thing from them.
You claimed that just a small fraction of the Freedom Alliance money goes to scholarships; you lied.
In fact, every single one of your libelous claims was proven false. Then you come trolling on here and refuse to apologize or even admit that you were wrong. Have you no shame? You’re a disgrace, I’ve never even heard of you, and congratulations of your new status as a pariah amongst conservatives.
nwahs // Mar 19, 2010 at 9:11 pm
Tim, the fact that only $4 of a $40 ticket goes to the charity these events are supposed to help, doesn’t bother you more than an aside?
So lets put it this way. If a promoter like Hannity wanted to hide his benefits from the concert series, he would just have to take them before the $4 was given to charity? That doesn’t interest you, Tim? Why be clever with this? Why not find out if Hannity is profiting anywhere down the line in these concert series? That’s an investigation.
TerryF99 // Mar 19, 2010 at 9:16 pm
” If say a $40 ticket yields a $4 donation to Freedom Alliance, we can’t vouch for what happens to the other $36. Some must pay for rent of the stadium for example. We have only the written record and what we could find by asking questions.”
And there lies the crux of the matter. The tax returns may indeed be OK on the surface. however what they are not detailing is where this amount of money which is 10 times the amount in the accounts is actually going. $4.00 from a $50 ticket to charity, $45 to who knows where. The venue is already paid by the $4.75 charged within the ticket price. $ 4.25 for parking, what happens to the rest? And why does the charity get less than the parking outfit? Just does not make sense.
JeninCT // Mar 19, 2010 at 9:45 pm
TerryF99 wrote: “$4.00 from a $50 ticket to charity, $45 to who knows where. The venue is already paid by the $4.75 charged within the ticket price. $ 4.25 for parking, what happens to the rest? And why does the charity get less than the parking outfit? Just does not make sense.”
Apparently you’re not an event planner. There’s the venue charges, staffing the venue, securing the venue, advertising, administrative costs, insurance, and even if the talent donates their time, their travel and lodging expenses are paid, as are their staffs. Also there is expensive rentals and staging, sound, lighting, medical staff and craft services.
I’m not a fan of Hannity per se, but I believe he deserves credit where credit is due. At least he’s doing something instead of sitting at his keyboard complaining.
And Debbie Shlussel, quit whining.
ltoro1 // Mar 19, 2010 at 9:51 pm
As I have state on another string, I have not taken the time to look at any documentation (990), but I feel comfortable saying that (1) no one has had time to do an exhaustive analysis of of anything and (2) there is probably not much going on here which would explain why no one else is talking about it.
TerryF99 // Mar 19, 2010 at 9:57 pm
Actually Jeninct I do have some experience in event planning. And $50-$75 for acts that are not exactly first class is really steep. The venue fee is $4.75 within the ticket price. The organization costs should be borne by the charity as they are paying Janet Fallon $110,000 a year as the events organizer. Her salary is within the charity accounts.
So out of a typical ticket of $50 there are $4 for the charity, $4-75 for the venue, $4.25 for parking. That leaves $37 from a $50 ticket or $62 from a top level $75 ticket. There is no way the artists costs and insurance are going to be of this magnitude.
Promoters who work for profit have to take a decent cut from a ticket. So where is that slice going. It would normally be a lot more than the $4 to the charity.
nwahs // Mar 19, 2010 at 9:59 pm
“Apparently you’re not an event planner. There’s the venue charges, staffing the venue, securing the venue, advertising, administrative costs, insurance, and even if the talent donates their time, their travel and lodging expenses are paid, as are their staffs. Also there is expensive rentals and staging, sound, lighting, medical staff and craft services.”
Well apparently you are a promoter so please compare the the percentage of ticket sales that go to the charity in the Freedom concert series, with other benefit concerts in the past – e.g., Concert for Bangladesh, Live Aid, or Farm Aid. Did they rack up a 90% overhead?
joemarier // Mar 19, 2010 at 10:12 pm
Funny you should mention Live Aid!
http://en.wikipedia.org/wiki/Live_Aid#Aid_money_used_by_rebel_groups_to_buy_weapons
nwahs // Mar 19, 2010 at 10:32 pm
Yea, and I know the money for Bangladesh was held up also. But I don’t think either of these events operated with 90% overhead. Whether the charitable donations made it to the proper place is another issue entirely. I’m talking about “charity” concerts operating with a *90% overhead* . That’s great work if you can get it, but not very charitable! Its closer to exploitation.
Carney // Mar 19, 2010 at 10:36 pm
Editing quibble: to a casual visitor glancing at the article, the Schlussel accusations in boldface that FrumForum says it has refuted seem like conclusions that FrumForum has drawn or is endorsing, by being in boldface, and because of the lack of distancing text. The layout thus conveys the exact opposite FrumForum seeks to convey.
Perhaps each should have been bracketed by quotes, or preceded by a phrase like “Schlussel Accusation:”
Carney // Mar 19, 2010 at 10:53 pm
As to the substance and the merits, I haven’t done the research. I found Schlussel’s initial accusations credible and troubling, but Freedom Alliance’s response and FrumForum’s research were also effective.
What’s really tipped me into the anti-Schlussel camp, though is her response above @ 1. It accuses Frum of doing a 180, first posting her accusations and giving them credence (for which she never thanked him that I saw), but then of ordering his writers to perform a fraudulent whitewash of a very serious case of robbing from wounded veterans, merely in order to preserve his access to the Fox airwaves, because of a direct threat from Hannity.
That rings false to me and indeed is so obviously unlikely as to seriously make me question her judgment or even her grip on reality.
Even conceding that Hannity is as ruthless and in control of all FNC programming bookers, and that Frum and his staffers are as unprincipled as she suggests, wouldn’t Frum have a much bigger incentive to stick to his guns and expose Hannity not only as corrupt but also as a bully? Doing so would get Frum and his team far more fame and media access than any Hannity could offer, with no risk of subsequent exposure as conspirators in wrongdoing.