In Part 1, we learned about Rick Berman and his groups. In Part 2, we learned of some of his methods of "getting his message out". Today, we conclude the series.
PART 1 - "Getting to Know You"
PART 2 - "Perhaps You've Seen His Work"
PART 3 -"Legal/Financial Issues and Conclusion"
PART 3 - "LEGAL/FINANCIAL ISSUES AND CONCLUSION"
Lets start with something we all can recognize: THE GINGRICH ETHICS SCANDAL
..."He was also a close political ally of former House Speaker Newt Gingrich. After meeting with Berman, a Gingrich staffer wrote a memo saying, "I think there is a very real possibility here of $20,000-$25,000" if Gingrich could "incorporate some of the ideas" Berman advocated---chief among them that low-wage food-service jobs were not necessarily a dead end---in his televised college course."
...In 1993, Berman made a $25,000 contribution to Kennesaw State College for Gingrich's class on "Renewing American Civilization" on condition that Gingrich teach ideas supported by EPI. House Ethics Committee reports revealed that Berman's contribution was solicited by GOPAC and that Berman had already helped GOPAC in recruiting big donors. In the cover letter to the check, Berman thanked Gingrich for his "help" in enabling Berman to testify at a Congressional hearing on another matter of interest to the industry. (emphasis mine)
And here is the letter. Handwritten at the bottom: "Newt: Thanks again for the help on today's committee meeting."
Gingrich denied that the money influenced his lectures. But after EPI donated $25,000, the Speaker described fast-food work as "the entrepreneur's great learning opportunity" and praised several fast-food chains by name. "When you hear someone say, `Well, that's a hamburger-flipping job,'" Gingrich told his students, "you know that's somebody that doesn't understand America."
Berman has since argued that no one pays $25,000 to testify at a hearing, and he is undoubtedly right. That wasn't all Berman got. Gingrich wove Employment Policies Institute material on the evils of the minimum wage into his college course. Once Newt became speaker, Berman and his paid economists were able to make the same case to Congress. Gingrich also used course material that Berman provided on one of his biggest clients: restaurant mogul Norman Brinker, who founded the Steak & Ale and Chilis chains."
REQUESTS FOR INVESTIGATION INTO BERMAN'S ACTIVITIES FROM CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON
On November 16, 2004, CREW requested the IRS investigate The Center for Consumer Freedom (CCF) regarding its tax-emempt status allowed for a non-profit corporation as a 501(c)(3). CREW cites that Berman 1) "engaged in prohibited electioneering by openly opposing the presidential and congressional candidacies of Dennis Kucinich"; 2) made payments to Berman that are prohibited (nearly $7 million constituting 72% of his exempt organizations' total expenses since 1997); and 3) "continuously engaged in substantial non-exempt activities".
CCF described Kucinich as (D-Greenpeace), brutal, vain, a yappy little demagog (sic), an obnoxious little twerp, the nutty presidential candidate, and "a wacko looking for a new job next November".
CREW charges that from 1997-2002, Berman's non-profit organizations had total expenditures of $9,505,384. From that amount, $6,801,322 was paid to Berman and Berman and Co. CREW calls Berman to be subjected to an excise tax (Code 4958), which imposes excise taxes of up to 200% on excess benefit transactions between 501(c)(3)'s and disqualified persons. They also ask that the tax-exempt status of the non-profits be revoked.
"Purportedly non-profit entities are a mere extension of BCI that conduct grassroots, lobbying, public relations, and advertising services directed against the charitable and social welfare organizations that oppose the policies and practices of those industries."
CREW's review of internal documents from Philip Morris USA that became available as part of the global tobacco litigation settlement revealed the motives behind the creation of Guest Choice Network.
In a May 24, 1996 letter to Philip Morris, Berman again clearly disclosed the secret, true purposes of GCN/CCF in nearly identical terms, stating:[T]he Guest Choice Network...was formed to work with the restaurant and hospitality industries in order to defend their consumer and marketing programs against attacks from anti-smoking, anti-drinking, anti-meat, etc. activists...
It is worth mentioning here that in 12/95, Philip Morris "pledged" $600,000 of "seed money" to Berman's GCN. Between 1995-1998, Philip Morris gave a total of $2.5M to GCN/CCF.
More detail regarding these allegations is contained in the CREW link.
CREW has also sent a letter to Senators Grassley and Baucus on February 14, 2006 requesting that an investigation into Berman's lobbyist activities be initiated by the Senate Committee on Finance.
On June 22, 2004, IRS Commissioner Everson testified before the Senate Finance Committee that the IRS will be aggressively scrutinizing tax-exempt organizations, "especially excessive executive compensation and lucrative contracts between exempt organizations and insiders and/or companies operated or controlled by those insiders". At that hearing, Grassley stated, "charities are to benefit the public good, not fill the pockets of private individuals". "There have been a number of high-profile examples of problems of inflated salaries being paid to trustees and charity executives and insider deals with insufficient transparency," noted Senator Baucus.
CREW states:
...it appears that Mr. Berman has modeled CUF (Center for Union Facts) after CCF (Center for Consumer Freedom) and that once again, Mr. Berman is abusing the laws governing charitable organizations. As a result, CREW requests that the Committee investigate: 1) whether CCF and CUF are engaged in charitable activities or whether they are in fact, merely front organizations for for-profit industry entities and BCI clients; 2) whether Mr. Berman and BCI are receiving excess benefit compensation from CCF and CUF; and 3) whether Mr. Berman and BCU received prohibited private inurement from CCF and CUF.
NOTEWORTHY CORPORATIONS WHO HAVE DONATED TO THE NON-PROFIT ORGANIZATIONS
The following information was provided by a whistleblower. This is by no means a complete list and covers only the years 2001-2002.
Coca Cola Corporation $200,000; Excel/Cargill $200,000; HMS Host Corp (Host Marriott Systems) $75,000; Monsanto $200,000; Outback Steakhouse $164,600; Perdue Farms, Inc. $40,000; RTM, Inc.(includes Arby's, has 895 restaurants in 23 states, 42 markets, 25,000 employees) $64,872; Tyson Foods, Inc. $200,000; and Wendy's International, Inc. $200,000.
CAMPAIGN CONTRIBUTIONS
I did take a look at the available information regarding campaign contributions, and although I'll admit that I really am a novice at this type of thing, nothing stood out to me that seemed noteworthy. I found a few; I had expected to see quite a bit more. Perhaps I am missing something here. I did find this, which comes from a CREW press release from February 20, 2006, as a possible answer:
"...What hasn't been fully explained is whether Berman's donations to Republican Party campaign coffers came indirectly from supposedly charitable donations through groups like CCF or others controlled by him."
CONCLUSION
I know that I have presented quite a lot of information over these three diaries. It started with my interest in who was behind the "unionfacts.com" website; however, what I found was the complex and intertwined background of a lobbyist who also calls himself a consumer advocate. In reality, he advocates strictly for the ideals and policies of the clients/industries his company represents. To date, IRS and Senate Committee on Finance investigations have been requested regarding his activities, but no approval or movement on these requests have happened that I am aware of.
RICK BERMAN - tuck this name away for future reference. My guess is that we have not heard the last of him or his methods.