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The pitfalls of politicians and nonprofits

The voters had their say on Fattah, now it’s a jury’s turn

WHEN REP. Chaka Fattah was indicted last year, he expressed confidence that he would re-elected to the Second District seat he has held since 1995.

"We'll have to live with the judgment they make," Fattah said, referring to voters in his district, but he reminded everyone that the voters had returned him to Congress again and again since 1995.

The voters in the Second did make their judgment in the April 26 Democratic primary. It went against Fattah. He lost, by a wide margin, to state Rep. Dwight Evans.

Now, it will be a federal jury's turn. Fattah's trial on a 29-count federal indictment began this week with jury selection.

A central element in that trial will be the numerous nonprofits Fattah set up over the years to handle certain projects - some with noble goals, some with good results - but all of them now under a cloud.

When push came to shove - or so federal prosecutors allege - Fattah used those nonprofits to funnel money to repay an off-the-books $1 million loan made by a mortgage bank executive in 2007 to finance his campaign for mayor, a campaign he lost, by a wide margin, to Michael Nutter.

The indictment alleges these nonprofits got a lot of their money from the government, thanks to earmarks Fattah inserted into the federal budget. He was well-positioned to use the power to earmark, given his ranking position on the House Appropriations Committee.

Two of the nonprofits cited in the federal indictment were the Education Advancement Alliance (EAA) and the College Opportunity Resources for Education (CORE), which received millions in earmarked funds. Several years before the indictment, a federal Department of Justice audit questioned $1.25 million in spending by EAA, citing "unallowable" salaries and non-competitive contract awards.

Regardless of the outcome of Fattah's trial, we have to say - once again - that the practice of politicians creating and running nonprofits is an invitation to abuse.

Because of the nature of the laws that govern nonprofits, they do not have to disclose who gave them money, nor do they have to reveal in detail how it was spent. A politician can steer donors to give - and get a charitable deduction on their taxes - without revealing their names or the amount of their donations. If these donations were made to an elected official's political committee they would have to be disclosed to the public. That's the way it should be.

A good example is Citizens Alliance, the nonprofit established by state Sen. Vincent Fumo. For years, Fumo refused to disclose how the alliance got its millions. Also undisclosed were the personal items Fumo used Alliance money to buy. He went to jail for that.

That's not to say Citizens Alliance didn't do good. It can be credited with taking the first crucial steps in the revival of Passyunk Avenue and it provided services to Fumo's constituency.

But, in this case, the secrecy on how the nonprofit raised and spent its money served to camouflage Fumo's excesses.

We're not drawing a direct line between the Fumo case and the Fattah case. For one thing, the allegations against the congressman have yet to be heard in a court of law.

The congressman will be given his chance to prove his innocence, through evidence he submits and through his sworn testimony on the witness stand.

We will not judge him. That is jury's job . . . And he will have to live with the judgment they make.