EXCLUSIVE: Barton’s foundation not so charitable

EXCLUSIVE:

The top Republican on the House Energy and Commerce Committee operates a tax-exempt foundation that has raised donations from the industries his committee oversees, while giving less than a quarter of the foundation’s money to charitable causes, tax records show.

Rep. Joe L. Barton’s foundation spent more on staff, fundraising and other overhead from 2005 to 2007 - nearly $130,000 in all - than it did on its single $90,000 contribution to a charitable cause, according to its most recent Internal Revenue Service filings. The congressman’s daughter-in-law runs the foundation as an unpaid executive director.

The Texan generated positive headlines for himself in his congressional district when he promised to use his foundation to raise as much as $900,000 to help build a local Boys and Girls Club and fund a Meals-on-Wheels program. Mr. Barton was honored for his commitment to philanthropy at a ceremony in November.

But records show that at the time the lawmaker made such pledges, his charity had never raised that kind of money.

In recent months, Mr. Barton and his foundation have been trying to fulfill their charitable pledges by taking credit when companies give directly to community groups in the foundation’s name - essentially bypassing a 2007 congressional requirement that donations from lobbying interests to lawmakers’ charities be disclosed.

The tactic has allowed Mr. Barton to raise money for his pet charitable causes from special interests with business before his House committee without the public’s knowledge.

“Members of Congress have redefined charitable giving as just another form of pay-to-play,” said Naomi Seligman, deputy director of Citizens for Responsibility and Ethics in Washington (CREW), a nonprofit ethics watchdog that has been examining the charities of political leaders like Mr. Barton.

“These charitable contributions allow those with special interests to both curry favor with lawmakers and look selfless, while pursuing a calculated, selfish agenda,” Ms. Seligman said. “By pressuring companies with business before his committee to make charitable contributions, and then making sure those donations cannot be tracked - but are still credited to his foundation - Mr. Barton has found a way to a new low in Washington. And that is saying something.”

Craig McDonald, director of Texans for Public Justice, a watchdog group that monitors political corruption and corporate abuses in Texas, called the Barton foundation solicitations “an absolute conflict of interest.”

“Raising money for a foundation can be done very easily behind the scenes and outside the public’s view, and allows the special interest groups to court members of Congress for something they need,” he said. “And in this case, Joe Barton gets the public relations benefit of doling out the money.”

Mr. Barton’s press secretary, Sean Brown, described the fundraising as “perfectly legal and by the books.” He said those who take a cynical view of the good the foundation is doing “are probably predisposed to find fault with a lot of worthwhile efforts by members of Congress to improve the lives of people in their districts.”

“Congressman Barton´s willingness to use his name and reputation to benefit qualified charitable organizations that serve low-income and other underprivileged people instead of using that ability solely for political purposes should be commended and is not something the people of the 6th District of Texas are likely to criticize,” he said.

Mr. Barton, as a ranking member of an influential Washington committee, is hardly alone among lawmakers who have established, maintained or controlled a private foundation. Others include former President Bill Clinton; former Sen. Ted Stevens, Alaska Republican; Sen. Orrin G. Hatch, Utah Republican; and former House Majority Leader Tom DeLay, Texas Republican.

The Barton Family Foundation was incorporated in Texas on April 5, 2005, and is recognized by the IRS as a public charity under Section 501(c)(3) of the Internal Revenue Code.

At the time, Mr. Barton was chairman of the powerful House Energy and Commerce Committee, which has jurisdiction over, among other things, energy compacts; energy conservation; the generation and marketing of power; interstate transmission and rates; and the regulation of the domestic nuclear energy industry. When Democrats took over Congress in 2007, he became ranking minority member.

After Mr. Barton’s foundation pledged to raise $500,000 to help build a $3 million regional kitchen and offices for the Meals-on-Wheels program in Johnson and Ellis counties, companies with interests before Mr. Barton’s committee stepped forward.

Future Energy Holdings, formerly known as TXU Energy, which supplies electricity to more than 2 million Texas customers, and Burlington Northern Santa Fe Railroad (BNSF), which delivers coal to 60 power plants in 28 states, including Texas, came up with $35,000 for the project in the foundation’s name, said Meals-on-Wheels Executive Director Vinsen Faris.

Mr. Faris said that while none of the donated money came directly from the Barton foundation, it still counted toward the lawmaker’s pledge. Mr. Barton’s hometown newspaper, the Ennis Daily News, reported last week that the veteran lawmaker was “the special guest at a VIP Reception” because he had made the first donation to the Meals-on-Wheels program.

The Barton foundation also promised at a town meeting to raise up to $400,000 to help build a $1.2 million Boys and Girls Club in Corsicana, Texas, and those attending the meeting “burst into applause” when the announcement was made. Texas Monthly magazine reported in 2005.

But the foundation’s tax records show that while the organization raised $182,839 in 2005 and $214,628 in 2006, it gave just $90,000 in grant money - a single award in April 2006 to help construct the new Boys and Girls Club. During that same two-year period, the records show, the foundation paid out $126,000 in management, fundraising, compensation and other “general” and “functional” fees.

The tax records show that the foundation collected no money in 2007 and spent $3,400 in accounting, postal and telephone fees for a year-end balance of $211,166. No other charitable gifts or grants are listed in the foundation’s tax records over the three-year period.

Amy Barton, the foundation’s executive director, said the charitable organization “partnered” with the Boys and Girls Club in 2005 to plan a new facility to house after-school programs. She said the foundation pledged to raise $375,000 for the project, which was “fulfilled with funds from the foundation and with funds given directly to the Boys and Girls Club by other donors who were made aware of the project by the foundation.”

“We met our pledge,” she said, noting that the Boys and Girls Club opened its facility on May 17, 2008.

She said that after an extensive grant selection process in 2008, the foundation promised to raise $500,000 for the Meals-on-Wheels program, although that “pledge remains unfulfilled as of this date.” Similar to the Boys and Girls Club pledge, she said, the commitment “will be fulfilled with funds from the foundation and with funds given by other donors who were made aware of the project by the foundation.”

Asked for the names of the other donors, Mrs. Barton declined, saying those who contributed “asked us to keep their information private, and we choose to honor that commitment.” Eula Linicomn, the Boys and Girls Club’s executive director, also declined to identify the donors.

But Exelon Corp., which donated $25,000 to the Barton foundation last year, said the foundation solicited the donation and asked that it be applied to the Boys and Girls Club pledge.

Exelon spokesman Jeffrey Smith said the company regularly supports organizations in the communities in which it has customers, employees or facilities “to help improve the qualify of life in those areas.” He said Exelon’s 2008 donation of $25,000 to the Barton foundation “was made in response to a letter of request submitted by the foundation, to be applied to the completion of a Boys and Girls Club facility in Corsicana.”

The Exelon donation, however, was made public by the company under new congressional rules, listed in a now-required House lobbying report. The report, first disclosed by CREW, listed the Barton foundation as the “payee” and Mr. Barton as the “honoree.”

The contribution was made at a time when Mr. Barton, who has vigorously called for “the rebirth of the nuclear power industry in this country,” was proposing legislation that would help expand the market for nuclear energy. Exelon also had been negotiating for government approval to build a multimillion-dollar nuclear power plant in Mr. Barton’s home state.

Exelon needs federal loan guarantees to back financing for a proposed nuclear power station that the firm wants to build in Victoria County, Texas, southwest of Houston. The nuclear power industry has sought to pressure lawmakers to expand the loan guarantee program for new plants nationwide. While Congress has authorized $60 billion for the guarantees, only 18.5 billion has been allocated by the Department of Energy for new nuclear plants over the next few years - far short of the industry’s demand for $122 billion.

Mr. Brown, the lawmaker’s spokesman, said Mr. Barton has “consistently and enthusiastically” supported more nuclear power plants for Texas as part of a strategy to become energy independent in an environmentally sensible way.

“To suggest that any donations from Exelon, whether to the foundation or to his political campaign, buys the company ‘unfettered access’ is patently ridiculous, since Mr. Barton has always championed what the company wants to do in terms of expanding nuclear power,” he said. “It is also important to note that the congressman has no power when it comes to permitting nuclear power plants at the state or federal level.”

Although the foundation has yet to donate any cash to the Meals-on-Wheels program, Mr. Faris said he received $25,000 from TXU Energy and $10,000 from BNSF to be credited to the Barton foundation. The program also received $25,000 in the name of the foundation from Sarah and Ross Perot Jr., who have donated to Meals-on-Wheels programs elsewhere in Texas and who, according to Federal Election Commission records, are longtime contributors to Mr. Barton’s campaigns.

“We have a pledge from the Barton foundation and an agreement that over time it will give directly to the program or raise other donations to meet the $500,000 figure,” Mr. Faris said.

TXU’s political action committee donated more than $62,000 to Mr. Barton’s political races since 2000, according to FEC records, and the BNSF political action committee contributed $58,500 to Mr. Barton in the same period. Spokesmen for TXU and BNSF did not respond to questions concerning their donations.

The Barton foundation was among several groups honored for their philanthropy during Nov. 6 ceremonies in Fort Worth sponsored by the Association of Fundraising Professionals. The foundation was flagged for its pledge of $500,000 for the Meals-on-Wheels program.

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