John Edwards' Campaign Defends Nonprofit Center

Jun 22, 07:36 AM

Current Headlines: By LESLIE WAYNE

By Leslie Wayne

The New York Times

CHAPEL HILL, N.C.

John Edwards ended 2004 with a problem: how to keep alive his public profile without the benefit of a presidential campaign that could finance his travels and pay for his political staff.

Edwards, who reported this year that he had assets of nearly $30 million, came up with a novel solution, creating a nonprofit organization with the stated mission of fighting poverty.

The organization, the Center for Promise and Opportunity, raised $1.3 million in 2005, and - unlike a sister charity created to raise scholarship money for poor students - the main beneficiary of the center's fundraising was Edwards himself, federal tax filings show.

A spokesman for Edwards on Thursday defended the center, however, as a legitimate tool against poverty.

The organization became a big part of a shadow political apparatus for Edwards after his defeat as the Democratic vice presidential nominee in 2004 and before the start of his presidential bid this time around. Its officers were members of his political staff, and it helped pay for his nearly constant travel, including to early primary states.

While Edwards said the organization's purpose was "making the eradication of poverty the cause of this generation," its federal filings say it financed "retreats and seminars" with foreign policy experts on Iraq and national security issues. Unlike the scholarship charity, donations to it were not tax-deductible, and, significantly, it did not have to disclose its donors - as political action committees and other political fund raising vehicles do - and there were no limits on the size of individual donations.

Edwards, a one-term former senator from North Carolina, set out to keep his political options open by promoting issues he cared about .

"He wanted to learn, travel and be in a position to be a viable candidate," said J. Edwin Turlington, a Raleigh lawyer and manager of Edward's 2003 presidential exploratory committee. "He had the ability to raise money to fund his activities. He had a vision, and he knew it would take money."

Edwards mixed policy and politics in a way that allowed his supporters to donate to the causes he believed in - and to the organizations he had set up. He also set up two political action committees, something commonly done by those thinking of running for president.

But it was his use of a tax-exempt organization to finance his travel and employ people connected to his past and current campaigns that went beyond what most other prospective candidates have done before pursuing national office.

And according to experts on nonprofit foundations, Edwards pushed the boundaries of how far such organizations can venture into the political realm. Such entities, which are regulated under the tax code, can engage in advocacy but cannot make partisan political activities their primary purpose without risking loss of their tax- exempt status.

Because the organization is not required to disclose its donors - and it declined to do so - it is not clear whether those who gave money to it did so with the understanding that they were supporting Edwards' political viability as much or more than they were giving money to combat poverty.

The money paid Edwards' expenses while he walked picket lines and met with Wall Street executives. He gave speeches, hired consultants, attacked the Bush administration and developed an online following. He led minimum-wage initiatives in five states, went frequently to Iowa, and appeared on television . He traveled to China, India, Brussels, Uganda and Russia, and met with Prime Minister Tony Blair of Britain and his likely successor, Gordon Brown, at 10 Downing St .

Edwards depended for his activities in large part on donations . In addition to the two nonprofit organizations, he created a leadership political action committee and a "soft-money" organization .

All four groups shared an address in Washington and jointly raised around $4 million. Most donations to the political committees came from his core supporters, trial lawyers and unions, and in one case from an anonymous donor, who gave $250,000.

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