Torricelli funds go into his nonprofit

LAMBERTVILLE, N.J. — Former Sen. Robert G. Torricelli, a top fundraiser for Sen. Hillary Rodham Clinton, is sending hundreds of thousands of dollars in donations from his 2002 Senate campaign to a private foundation registered in his name and based out of his New Jersey lobbying office — an arrangement that troubles campaign-finance and tax experts.

Federal election rules allow former elected officials to use surplus campaign money on charitable causes, though Mr. Torricelli’s Rosemont Foundation, which received $1.5 million in campaign cash last year, has not yet been granted tax-exempt status.

Angelo Genova, an attorney for Mr. Torricelli, said the foundation’s application for nonprofit status is pending, adding that it was “established within all rules and regulations.”

Both Mr. Torricelli’s lobbying firm, Rosemont Associates, and the Rosemont Foundation are based at the same address in Lambertville, about 15 miles north of Trenton. A lobbying firm partner runs Mr. Torricelli’s 2002 campaign fund.

Experts said that although the transfer of campaign funds to a private foundation in Mr. Torricelli’s name is legal, the ties among the campaign fund, the former senator’s lobbying business and new foundation raise questions about whether the charity can steer clear of politics.

The IRS prohibits tax-exempt charities from campaigning for or against politicians.

“There are thousands of worthy charities that would gladly accept a contribution from a politician’s dormant campaign committee and could take the money almost immediately and put it to use,” said Massie Ritsch, spokesman for the nonpartisan Center for Responsive Politics.

“What’s the need to create yet another foundation in order to make those donations? Why create a middleman? Moving leftover campaign money into a foundation housed with a lobbying firm doesn’t put to rest concerns that the campaign cash will go toward benefiting the firm’s clients and building the lobbyist’s clout,” he said.

Frances Hill, a nonprofit tax specialist and law professor at the University of Miami, said she wouldn’t allow a client to base a nonprofit from the same address as a lobbying firm.

“It’s about appearance,” she said. “They have to be very careful that they’re not just fueling his consulting business and distributing charitable grants to organizations that agree with his positions.”

Mr. Torricelli’s lobbying associate and campaign treasurer, Sean Jackson, referred questions about the Rosemont Foundation to Mr. Genova, who said the foundation would not jeopardize its tax-exempt status by engaging in improper political activities.

“There is no income, expenditure or other activity in 2007 to report other than legal fees relating to the establishment of the foundation and the receipt of the excess campaign funds as already reported to the Federal Election Commission,” he said.

Mr. Genova also said the foundation will file a tax return next month covering the 2007 calendar year. He said the foundation will support the Betty Torricelli Institute for Breast Care, land conservation and animal rights.

The IRS and the FEC declined to comment on the arrangement. But the transfer could pose legal problems if the foundation’s tax application is rejected, a scenario Mr. Genova deemed unlikely.

“If they’re not approved, they could have potential IRS problems and potential FEC problems,” said Michael Toner, a former FEC chairman appointed by President Bush.

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