Mar 11, 2011

O'Keefe sting, part 2: Attempt to hide $5 mil gift blocked by Slocum, Schiller

In the second part of the right-wing undercover sting of NPR, released Thursday (March 10), a senior fundraiser told one of the men posing as a wealthy Muslim donor that she would explore whether NPR could shield his organization's gift from government auditors.

The phony donor recorded phone conversations with Betsy Liley, senior director of institutional giving, in which he inquired whether his organization's planned $5 million gift to NPR would be subject to a government audit, given that NPR receives federal funding.

NPR released e-mails from its top executives to document that ultimately the fake philanthropist didn't pass scrutiny. Joyce Slocum, NPR general counsel who was appointed interim c.e.o. after Vivian Schiller's resignation on Wednesday, wrote on March 4 to the donor posing as Ibrahim Halem Kassam, and told him to produce tax documentation of his nonprofit trust, the Muslim Education Action Center.

In the audiotape of Liley, released as excerpted and full-length versions yesterday, the donor says, "It sounded like you were saying that NPR would be able to shield us from a government audit — is that correct?"

Liley answers, "I think that is the case, especially if you were anonymous, and I can inquire about that."

In Liley's follow-up e-mail to the donor, which was released as a screen shot accompanying the audio, Liley writes that NPR can accept a gift from the Muslim Education Action Center without disclosing the organization's name.

Liley's statements about accepting an anonymous gift to protect a donor from scrutiny is "inaccurate and not reflective of NPR's gift practices," said Dana Davis Rehm, NPR spokeswoman. "All donations -- anonymous and named -- are fully reported to the IRS. NPR complies with all financial, tax and disclosure regulations."

MEAC is a fake organization that was created by conservative filmmaker James O'Keefe for the purposes of drawing NPR and PBS executives into secretly recorded conversations. Kassam is the phony identity of one of two men who posed as representatives of MEAC's deep-pocketed trust and staged a lunch meeting with Liley and her boss, Ron Schiller, that was recorded by hidden video cameras.

Ron Schiller, who described the Tea Party as racist and the Republican Party as "anti-intellectual" in the sting video that was released on Tuesday, resigned from NPR. Liley, who was a fundraiser for Purdue University before joining NPR nine months ago, has been placed on leave.

Ousted NPR President Vivian Schiller, who talked with Kassam by telephone and reported to her staff about the conversation in a March 3 e-mail, pressed him to produce IRS 990 forms for his foundation.

"He had questions...which I said I simply don't have the expertise to answer but that one of our lawyers would," Schiller wrote. "He repeated again that they want to deliver the check. I said that's very generous but we have to sort out these issues first....He seemed a bit worried that there was some subtext to our hesitation."

Slocum wrote to Kassam on March 4 and asked him for an IRS letter certifying the trust's tax-exempt status and annual Form 990 tax filings. "[W]e need to verify certain information with respect to any organization that proposes to make a significant gift to NPR."

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