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McCain Campaign Calls; A Nonprofit Steps In

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.

The McCain campaign said that it did not coordinate with CAGW on the group's ads about the tanker deal and that Swindle played no role in initiating the attack on Northrop's opponents. "One campaign staffer called CAGW to ask for information about what CAGW had said in the past on the issue, and was told that CAGW had a policy of not talking to the campaign. That was the end of the conversation," spokeswoman Jill Hazelbaker said in a statement.

Swindle is a friend of McCain who shared a cell with him as a prisoner of war in Vietnam. He did not respond to requests for comment.

As the campaign's veterans liaison, Swindle helped the candidate fend off attacks in South Carolina from a group called Vietnam Veterans Against John McCain, which said that while in captivity, McCain gave information to the North Vietnamese. Swindle countered the group's charges in a statement put out by the campaign: "Nothing could be further from the truth. I know because I was there."

He defended the senator's war record this spring after it was questioned by Sen. John D. Rockefeller IV (D-W.Va.). Swindle also has appeared in several McCain campaign ads online.

But CAGW spokeswoman Leslie Paige said that in Swindle's role as a director, "there are absolutely no discussions related to the McCain campaign."

A new McCain policy on lobbying activity by his aides prohibits campaign officials from participating in any political group known as a 527, "or other independent entity that makes public communications that support or oppose any presidential candidate." The campaign did not respond directly to a question about whether the policy applies to Swindle, who is on the boards of CAGW and its lobbying arm, which endorsed McCain.

Last year, around the time he announced his candidacy for the Republican presidential nomination, McCain lauded CAGW's work and its president, Thomas Schatz. CAGW's political arm endorsed McCain in February.

Praise from the group has been built into McCain's campaign messages. "John McCain, named a 'Taxpayer Hero' by Citizens Against Government Waste, has led the fight against wasteful spending his entire career," his campaign Web site states.

And a campaign ad says: "He's been cutting wasteful spending for more than 20 years. That's why Citizens Against Government Waste calls John McCain a taxpayer hero."

Hazelbaker said McCain and the group have "a mutual interest in tirelessly fighting waste, fraud and abuse in government."

Paige said neither McCain's campaign nor his Senate staff influenced CAGW's decision to mount a public relations effort defending Northrup.

"Our recent statements on the subject are a consistent, natural outgrowth of the last six years of involvement in the issue and were inspired by nothing more than the contract award on February 29," she said in a statement.

In their joint campaign this year, CAGW and Northrop collaborated on a Northrop-funded Web site called America's New Tanker, which exhorted citizens to contact their lawmakers to support the award.

Northrop spokesman Randy Belote said the company has not donated any money to CAGW. "Northrop Grumman fully agrees with the position taken by Citizens Against Government Waste (CAGW) that encourages members of Congress to protect the integrity of the defense system acquisition process," Belote said in a statement.

CAGW has been criticized for accepting donations from organizations that benefit from its advocacy. Two years ago, investigators probing the activities of convicted lobbyist Jack Abramoff for the Senate Finance Committee examined whether CAGW advocated on behalf of Abramoff clients, including the Magazine Publishers of America, in exchange for donations. The committee concluded: "The e-mails show a pattern of CAGW producing public relations materials favorable to Mr. Abramoff's clients." The group denied those findings.

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