McCain Campaign Calls; A Nonprofit Steps In

The Post's Robert O'Harrow explains his investigation of Sen. John McCain (R-Ariz.) and his ties to Citizens Against Government Waste. Video by Ed O'Keefe/
By Robert O'Harrow Jr.
Washington Post Staff Writer
Saturday, May 31, 2008

For weeks, Republican presidential candidate John McCain had been hammered for supporting the Air Force's February decision to award a $40 billion contract for refueling tankers to Northrop Grumman and its European partner. Democrats, labor unions and others blamed the senator for a deal they say could move tens of thousands of jobs abroad.

McCain's advisers wanted to strike back against key Democratic critics. But they did not mount an expensive advertising campaign to defend the candidate's position. They called a tax-exempt nonprofit closely aligned with the senator from Arizona, seeking information and help.

Citizens Against Government Waste (CAGW) partnered with Northrop and one of its consultants to produce a vitriolic advertising campaign defending the tanker deal.

"Rep. Jack Murtha, Mr. Porker himself, has threatened to hold up funding," CAGW said, referring to the Pennsylvania Democrat, in an e-mail soliciting support. "Plus, there is great outcry from some in the media claiming we are turning over the Air Force to the French and giving Europe a gazillion jobs too. Nothing could be further from the truth."

Although the campaign and the group deny any cooperation, CAGW's willingness to jump into the tanker controversy illustrates what some experts describe as potentially improper political activity by nonprofits, an issue that is gaining attention as the presidential contest heats up.

This week, two key McCain supporters in the Senate, Joseph I. Lieberman (I-Conn.) and Lindsey O. Graham (R-S.C.), backed out of their advisory roles with another nonprofit, Vets for Freedom, after the group ran ads online attacking Sen. Barack Obama (Ill.), the likely Democratic presidential nominee.

CAGW's advertising campaign falls into a murkier space. The group's work on the Northrop deal offered indirect support of McCain on a highly controversial issue while costing his campaign nothing. It never explicitly mentioned McCain's name.

"This is the public relations equivalent of air cover: You saturate debate with your rhetoric so people start talking about your message and stop talking about McCain. . . . It's a classic third-party technique," said Sheldon Rampton, research director for the Center for Media and Democracy, a liberal organization that tracks the use of public relations by corporations and politicians.

Because of their tax-exempt status, nonprofits, or 501(c)3s, are not supposed to engage in political activity. They are allowed, however, to set up a separate political arm -- known as a 501(c)4 -- that may donate money to candidates and lobby on policy issues as long as political activity is not its primary purpose. The Internal Revenue Service is charged with enforcing the rules.

"The question is: What is lobbying and what is campaign intervention?" said Frances R. Hill, a University of Miami law professor who specializes in charitable organizations. "The difficult issue that arises with these kinds of relationships, especially in election years, is whether a candidate for public office is benefiting improperly from an organization's activity."

Formed in 1984, CAGW has long promoted McCain's image as a taxpayer advocate. Since 2006, the nonprofit's board of directors has included Orson Swindle, who also works on veterans issues as a volunteer for the McCain campaign.

CAGW has a lobbying arm, the Council for Citizens Against Government Waste, that has twice supported McCain for president. Its PAC has donated $11,000 in cash to McCain or a PAC under his control since 2004 -- 20 times as much cash as it has given any other candidate, records show.

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