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Frist's AIDS Charity Paid Consultants
By Jonathan M. Katz and John Solomon
The Associated Press
Saturday 17 December 2005
Washington - Senate Majority Leader Bill Frist's AIDS charity paid nearly a
half-million dollars in consulting fees to members of his political inner circle,
according to tax returns providing the first financial accounting of the presidential
hopeful's nonprofit.
The returns for World of Hope Inc., obtained by The Associated Press, also
show the charity raised the lion's share of its $4.4 million from just 18 sources.
They gave between $97,950 and $267,735 each to help fund Frist's efforts to
fight AIDS.
The tax forms, filed nine months after they were first due, do not identify
the 18 major donors by name.
Frist's lawyer, Alex Vogel, said Friday that he would not give their names
because tax law does not require their public disclosure. Frist's office provided
a list of 96 donors who were supportive of the charity, but did not say how
much each contributed.
The donors included several corporations with frequent business before Congress,
such as insurer Blue Cross/Blue Shield, manufacturer 3M, drug maker Eli Lilly
and the Goldman Sachs investment firm.
World of Hope gave $3 million it raised to charitable AIDS causes, such as
Africare and evangelical Christian groups with ties to Republicans - Franklin
Graham's Samaritan Purse and the Rev. Luis Cortes' Esperanza USA, for example.
The rest of the money went to overhead. That included $456,125 in consulting
fees to two firms run by Frist's longtime political fundraiser, Linus Catignani.
One is jointly run by Linda Bond, the wife of Sen. Christopher "Kit"
Bond, R-Mo.
The charity also hired the law firm of Vogel's wife, Jill Holtzman Vogel, and
Frist's Tennessee accountant, Deborah Kolarich.
Kolarich's name recently surfaced in an e-mail involving Frist's controversial
sale of stock in his family founded health care company. That transaction is
now under federal investigation.
Jill Holtzman Vogel, who is raising money for a run for the state Senate in
Virginia in 2007, has received thousands in contributions this year from Catignani
& Bond and from her husband, among numerous other sources, according to
data released by the Virginia Public Access Project.
Alex Vogel said Frist picked people to work on his charity whom he trusted
and knew, such as Vogel's wife, and was proud that overhead costs amounted to
less than $1 of every $5 raised. "It's leaner than the average charity,"
Vogel said.
Frist is listed as the charity's president and his wife was listed as secretary.
Neither was compensated.
Political experts said both the size of charity's big donations and its consulting
fees raise questions about whether the tax-exempt group benefited Frist's political
ambitions.
"One of the things people who are running for president try to do is keep
their fundraising staff and political people close at hand. And one of the ways
you can do that is by putting them in some sort of organization you run,"
said Larry Noble, the government's former chief election lawyer who now runs
the nonpartisan Center for Responsive Politics that studies fundraising.
Kent Cooper, the Federal Election Commission's former public disclosure chief,
said the big donors' motives are also suspect.
"These tax deductible gifts were earmarked through Senator Frist,"
Cooper said. "They were raised in the political arena at the 2004 Republican
Convention and the natural question is were they given to the Senate majority
leader to gain favor or were they given for true charitable purposes?"
Cooper said the consulting fees were "excessively high" and the fact
that they were "paid to primarily political consultants also raises questions
about the long-range strategic benefits for the 2008 presidential race."
A charity could lose its tax-exempt status if it is found to be involved with
political activity, said Marcus S. Owens, a former director of the Internal
Revenue Service's Exempt Organizations Division.
"If the IRS were to conduct an examination, what they would look for would
be the relationship between the organization and any incumbent politician or
candidate," Owens said. "They'd be particularly interested in transactions
of money or assistance of any kind being provided."
Frist formed the charity in 2003. It drew attention in August 2004 when it
held a benefit concert in New York during the Republican National Convention
at which President Bush was nominated for re-election.
The group's 2004 tax return was due April 15, 2005, but it filed for two extensions
and only reported its activity to the IRS last month.
The tax forms show at least 11 of the charity's 18 biggest donors gave $97,950
each, that one gave $100,000 and that the rest gave more than $245,000 each.
Vogel said Catignani was paid the fees because he helped arrange the New York
concert that featured country stars Brooks & Dunn, handling both the event
arrangements and fundraising.
The tax forms show Catignani's fundraising firm, Catignani & Bond, was
paid a total of $276,125 and his event-planning arm, Consulting Services Group,
was paid $180,000.
The amount Catignani was paid by Frist's charity in 2004 is roughly the same
as what his firms received over the past three years for work for Frist's political
action committee, Volunteer PAC. The firm collected $523,666 in fees from the
PAC since 2003, FEC records show.
World of Hope's beneficiaries include evangelical Christian groups with Republican
connections.
Cortes, Esperanza USA's president, is an influential evangelical leader who
hosted Bush at this year's National Hispanic Prayer Breakfast.
Frist has worked and traveled extensively with Samaritan's Purse in Africa
as well as during the immediate aftermath of Hurricane Katrina. Franklin Graham
is the son of the Rev. Billy Graham.
Weeks before Frist's convention fundraiser, the senate leader traveled to Chad,
Sudan and Kenya on a trip underwritten by Samaritan's Purse, Senate records
show.
Samaritan's Purse spokesman Jeremy Blume said the $490,000 that World of Hope
donated to Samaritan's Purse in 2004 was spent on AIDS programs in sub-Saharan
Africa.
The recipients of the charity's money were Africare, Samaritan's Purse, Esperanza
USA, Nashville's Meharry Medical College, Taso-Uganda and Save the Children.
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