Nader Had Campaign Office at Charity

'I Think This Is Wrong'

Two foundations -- one in Chicago and one in Bellingham, Wash. -- that donated to Citizen Works in recent years were unaware of the arrangement between the campaign and Citizen Works. Anne K. Smith-Holmes, executive director of the Chicago-based Benjamin J. Rosenthal Foundation, which gave $2,500 in 2002, said she was concerned about it.

"It doesn't sound like it would be something we would have supported," Smith-Holmes said. "We do not get involved in political situations."

Legal specialists in nonprofit tax and campaign finance law also questioned the arrangement.

"I think this is wrong," said Hill, the tax and campaign finance law expert. "This suggests that Citizen Works is supporting Nader for president. It can't do this. It isn't just the rent. It is the things like the copiers, the telephones, the light bill, the heating, the furniture, the computers. At the hyper-technical level, all those questions matter."

The FEC can be expected to review these issues when it audits the Nader campaign, said Larry Noble, a former FEC general counsel who is executive director of the Center for Responsive Politics. All campaigns that receive federal financing are audited.

"One of the things the FEC is going to have to unravel is whether or not Citizen Works subsidized the campaign," said Noble, who worked for a Nader group in the 1970s. The arrangement suggests a closeness that makes it "hard to tell where the campaign begins and the nonprofit organization ends," he said. "It clearly presents problems -- tax problems and campaign finance problems."

There are other indications of overlap between Nader's campaign and the charitable groups operating in the same office. The cell phone number for Citizen Works spokesman Lee Drutman is the same phone number used by a media staffer for Nader's campaign in 2000. A call to a telephone number that previously was listed for Education Allies, a subtenant of Citizen Works that is still listed in the building directory, was answered last week with a cheery "Nader for president."

Nader said his campaign staff and Citizen Works are strict in avoiding overlap.

"Lee Drutman worked for Citizen Works, period," Nader said. "That could be a phone screw-up, which often happens when you have subleases."

Ban on Political Activity

Stanley M. Brand, a District lawyer who specializes in campaign-finance and political law, said, "The FEC wants bright-line distinctions between campaign-related and charitable activities. And so does the IRS. A 501(c)(3) [public charity] is not supposed to underwrite or engage in political activity. If it is lending or forgiving expenses for use of its facilities, it may be creating its own problems with the IRS."

The issue has also stirred controversy among Nader-aligned groups, where the arrangement has been common knowledge for months. Citizen Works board member Russell Mokhiber unexpectedly resigned a few months ago, and one person familiar with the situation who works for a consumer group and who declined to be identified for fear of retaliation said the campaign's arrangement was a factor. Mokhiber, whose Corporate Crime Reporter newsletter advocates increased corporate transparency and accountability, declined to comment last week. District records indicate Mokhiber withdrew from the group in December.

Citizen Works spokesman Drutman said Amato resigned as executive director of Citizen Works to become manager of Nader's exploratory committee, which was formed in October. Drutman said Amato now "has no official capacity" with Citizen Works. Amato said in a statement faxed Thursday to The Post: "I do not speak for Citizen Works and I have not worked for Citizen Works since 2003. Questions about Citizen Works are appropriately directed to Citizen Works."

However, the group's latest annual report filed with the District, dated Jan. 13, 2004, states that Amato is the president and the registered agent for Citizen Works. She signed the corporate filing.

In the subsequent e-mailed response sent by Zeese, the campaign said Amato "took an unpaid leave of absence from Citizen Works in October and was terminated as an employee at the end of December. She resigned as president of the Board effective February 22." Nader said she remains on the charity's board.