Democrats Steered Gifts to Favored Tax-Exempt Group

Democratic officials regularly steered would-be campaign contributors to a tax-exempt and supposedly nonpartisan voter registration group that in reality has close ties to the Democratic Party, The Times has learned.

The group’s top leadership includes a former deputy finance director of the Democratic National Committee and a major party fund-raiser. Voter registration and get-out-the-vote organizations are eligible for tax exempt status under federal law on grounds that they promote good citizenship on a strictly nonpartisan basis.

Moreover, top contributors to the organization were honored at a special dinner at the White House last July. Both President Clinton and First Lady Hillary Rodham Clinton took part in the event.

Donations to such groups, known as “501C3s” for the provision of the U.S. Tax Code authorizing them, are tax deductible. But the groups are supposed to maintain an arms-length relationship with political parties, and any coordination of efforts could raise questions of legality and propriety.

The Washington-based group, called Vote Now ‘96, operated nationwide. It is one of three groups that a senior White House aide, Harold M. Ickes, recommended last fall to a major prospective contributor who coupled his offer to the DNC with a request for help in getting a tax deduction for a separate donation.

According to party sources, the Democratic National Committee has referred prospective donors to tax-exempt groups over at least the last four years. In the most recent campaign, the primary beneficiary was Vote Now ‘96, to which the committee directed up to $200,000. The organization’s registration and get-out-the-vote efforts generally were focused most heavily in black communities that tend to have lower registration percentages and turnout but which vote overwhelmingly Democratic.

Amy Weiss Tobe of the DNC said that Vote Now ’96 is one of a number of voter-participation groups to which the party sent supporters who asked for such referrals.

“The DNC believes they do extremely good work on voter education and voter participation,” Tobe said. “When asked . . . , we do direct people to Voter ’96.”

She added: “They are nonpartisan. The groups that we raise money for or give money to are groups that we believe do good work. What we don’t do is tell them how to spend their money.”

Mary Crawford of the Republican National Committee said that the GOP has not given similar referrals to GOP supporters who have asked to donate to tax-exempt organizations.

Meanwhile, Colorado Gov. Roy Romer, recently named co-chairman of the beleaguered DNC, initially said in an interview that he was uncomfortable with some aspects of the committee’s operations--including practices that assist donors in search of tax deductions.

“I don’t think we ought to become a shill for people who want tax deductions,” Romer said Friday. “I don’t think we ought to be agents for them. . . . I think you give the wrong image to people who are taxpayers.”

Later in the day, however, Romer called The Times back to say that he had been unaware of the extent to which the national party had been dealing with various tax-exempt organizations. Upon reflection, Romer said, he considers it acceptable to give potential donors the names of such tax-exempt organizations. But he said there should be certain limits.

“Should we have, here, a list of bank account numbers of [tax-exempt groups] on file? No, I think that’s too close,” Romer said. If DNC staff members provided donors with information regarding such groups, “you’ve got to do it in a way that you don’t make the 501C3 a subsidiary” of the national party, he said.

Vote Now ‘96, was led by Hugh A. Westbrook, a major party contributor who in 1993-94 served as the volunteer head of the Democratic Senatorial Campaign Committee. The executive director of Vote Now ’96 was Gary Barron, who works for Westbrook’s company and served as deputy finance director of the Democratic National Committee through the 1992 campaign.

It was to Barron that Ickes, then the White House deputy chief of staff, referred the would-be contributor. In a three-page memo that Ickes faxed from the White House on Oct. 31, he told the prospective contributor: “If possible, it would be greatly appreciated if the following amounts [of money] can be wired to the designated banks.”

Ickes identified Vote Now ’96 and two other groups, along with people to contact at the organizations and the bank account numbers through which money could be deposited. Ickes suggested in the fax that $250,000 could be given to Barron’s group and $500,000 to the party’s national committee.

Ickes did not return messages Friday seeking comment.

Barron, reached in Miami, said that, although he met “one-on-one” several times with Ickes over the last year and a half, he never encouraged him to steer contributors to the tax-exempt Vote Now ’96 project.

Barron, who was the group’s chief fund-raiser, said that he met with Ickes in the White House to discuss what he believed was lagging implementation by states of the so-called motor voter law, which lets citizens register at some government offices, including driver’s license agencies.

Barron said he discussed with Ickes his displeasure that states, particularly those headed by Republican governors, were not following the law’s intent to make voter registration available through various public offices.

Barron said that, at some point, he provided Ickes with detailed information about Vote Now ‘96, including its bank account number. But he said that he was well aware of the legally required separation between partisan and tax-exempt activities and that he had done nothing wrong.

“To engage in partisan activity would jeopardize our tax-exempt status,” Barron said. “Vote Now ’96 is a 501C3 nonpartisan, voter-participation program. . . . Its mission is to focus on the underrepresented community.”

Vote Now chairman Westbrook acknowledged he has conferred often with Ickes but said his group has remained nonpartisan.

The group’s efforts typically have been aimed at registering and getting to the polls African Americans, Latinos, students and others with low or fixed incomes.

Russell Hemenway, who heads a long-established organization called Citizens Vote Inc., which is the parent organization of Vote Now ‘96, acknowledged that the people targeted for registration and get-out-the-vote efforts were far more likely to vote for Democrats than for Republicans. Hemenway said that he has known Ickes for decades, since Ickes was field director of the 1968 presidential quest of Democrat Eugene R. McCarthy.

However, Hemenway said that he did not confer with Ickes over the last year and had “absolutely no idea why Harold Ickes” recommended Vote Now ’96 to the prospective contributor in October. He called Ickes’ actions “inappropriate.”

Hemenway said that both Citizens Vote and Vote Now ’96 have operated independently of the DNC.

Hemenway and Barron were on hand at the White House on July 12 when the president and Mrs. Clinton hosted the exclusive dinner for the group’s top contributors. Lanny J. Davis, a spokesman for the White House, said that he was unaware of the dinner; he did not respond to questions about the event.

The guests, about 50 of them--including such major Democratic Party stalwarts as Westbrook and Alida Messinger, an heir to the Rockefeller fortune--dined on a lamb entree in the White House Blue Room. Also in attendance were Alexis M. Herman, then White House director of public liaison and now Clinton’s nominee for Labor secretary, and Henry G. Cisneros, then secretary of Housing and Urban Development.

Clinton provided the evening’s only formal remarks.

“I thought the president was particularly good in talking about voter participation,” Hemenway said. “The people were pleased to be invited. . . . They had all been large contributors” to Vote Now ’96 or its parent organization.

Hemenway said that taxpayers did not pay for any of the food or drink. “We [the nonprofit organizations] paid for this dinner. It was strictly to thank our supporters. . . . It was nonpolitical. No politics were discussed.”

Milton Cerny, a Washington tax attorney and expert on tax-exempt organizations, said that groups such as Vote Now ’96 are not permitted to coordinate their activities with a partisan political entity.

Problems arise, Cerny said, when a “get-out-the-vote organization has a close affiliation with a particular party or a particular candidate and they run joint operations.”

Democrats have been intensely critical of House Speaker Newt Gingrich (R-Ga.) for his use of tax-exempt organizations to advance his personal and political agenda. Gingrich was reprimanded and penalized $300,000 by the House last month for failing to ensure that he complied with federal laws barring the use of tax-exempt funds for political purposes.

Documents released by the House Ethics Committee show that Gingrich’s political committee, GOPAC, improperly channeled tax-deductible donations through a charitable foundation in the early 1990s in an effort to raise money to help elect a Republican Congress.

The foundation was one of six tax-exempt organizations run by Gingrich advisors that generated at least $6 million in contributions that were outside the purview of federal election law. There is no indication that Vote Now ’96 was organized or operated by the DNC.