Debbie Schlussel:
For the last several years, Sean Hannity and the Freedom Alliance “charity” have conducted “Freedom Concerts” across America. They’ve told you that they are raising money to pay for the college tuition of the children of fallen soldiers and to pay severely wounded war vets. And on Friday Night, Hannity will be honored with an award for this “Outstanding Community Service by a Radio Talk Show Host” at Talkers Magazine’s convention.
But it’s all a huge scam.
In fact, less than 20%–and in two recent years, less than 7% and 4%, respectively–of the money raised by Freedom Alliance went to these causes, while millions of dollars went to expenses, including consultants and apparently to ferry the Hannity posse of family and friends in high style. And, despite Hannity’s statements to the contrary on his nationally syndicated radio show, few of the children of fallen soldiers got more than $1,000-$2,000, with apparently none getting more than $6,000, while Freedom Alliance appears to have spent tens of thousands of dollars for private planes. Moreover, despite written assurances to donors that all money raised would go directly to scholarships for kids of the fallen heroes and not to expenses, has begun charging expenses of nearly $500,000 to give out just over $800,000 in scholarships
David Frum at FrumForum:
It’s of course possible that this is a misunderstanding or mistake by Schlussel.
If mistaken, one would assume we’ll hear a defense from Hannity himself or his many admirers. If not mistaken, you’d assume we’d hear some kind of reaction from conservatives – and some kind of explanation/apology from Hannity. It’s not possible – is it? – that the conservative world will just pass by the affair in embarrassed silence?
True, Schlussel’s piece went up yesterday evening, and as of 9 am I can find no mention or reference in the conservative blogosphere. But its early.
So here’s my personal query. I’m going to set my google alert and twitter feed to find Hannity items. If anybody who can plausibly be considered a conservative discusses – even mentions – the Schlussel allegations, I’ll let you know. And if nobody does … well that’s not possible. Is it?
John Tabin at American Spectator:
I suppose it’s possible that Hannity himself wasn’t aware of what the balance sheet looks like, but a source tells Schlussel that Freedom Alliance founder Oliver North confronted Hannity at one point about how much of the charity’s money was being spent on private jets, luxury SUVs, and hotel suites. If that’s true, Hannity has a lot of explaining to do.
UPDATE: I’m hearing from reliable sources that Schlussel’s suggestion that Freedom Alliance pays for Hannity’s travel expenses is wrong. There’s little doubt that, if the numbers she cites are correct, the charity is seriously mismanaged, but it might not be as bad for Hannity personally as Schlussel’s report makes it look. Stay tuned.
ANOTHER UPDATE: Further exculpatory information here. Schlussel’s story seems to be falling apar
4 PM UPDATE:
Readers:
Information regarding Freedom Alliance that appeared earlier in this spot was innacurate or misleading and has been removed. Any further mention of this material as having appeared in this post will either mention or disavowal or be deceiving to readers.
— R. Emmett Tyrrell, Jr.
Freedom Alliance’s statement refuting the charges (pdf)
March 18, 2010
Dear Friends of Freedom Alliance:
This week, false and malicious allegations about Freedom Alliance were posted on the Internet and we want to address them with you. We don’t know the motivation for these vicious smears, but we will not allow them to go unanswered.
First, we want to thank you for your support and assure you that Freedom Alliance’s record of financial stewardship and programmatic achievements not only meets, but exceeds standards of program efficiency set by most charity evaluators. We are extraordinarily proud of our work at Freedom Alliance and stand by our efforts 100 percent.
False Accusations
1. The blog posting accuses our friend Sean Hannity of personally benefiting from Freedom Alliance. This is FALSE. Freedom Alliance has never provided planes, hotels, cars, limos, or anything else to Sean. Sean gets nothing from Freedom Alliance except our gratitude for his personal generosity and for all he has done to help the troops and our organization. We have never had to ask Sean for anything, he always generously offers his help before we have a chance to ask him. But to be clear Sean pays for all his own transportation, hotels, and all related expenses for himself and his family and friends and staff, which over the years has added up to tens of thousands of dollars. He does not use any Freedom Alliance Funds or Concert funds in any way, period.
2. Sean Hannity has contributed $100,000 to the Wounded Warriors Foundation, over $200,000 to the Freedom Alliance, and over tens of thousands of dollars to other military charities and individuals. We only make this information public because of the outrageous slander against him. Sean has no management or operational involvement in, or control over, Freedom Alliance. He has been a selfless patriot in his efforts to raise funds for the education of children of armed services personnel.
3. The blog posting accuses Freedom Alliance of spending less than 20% of money raised on program activities. This is FALSE. Listed below are the amounts that Freedom Alliance spent for each of the past three years and the categories on which they were spent. The figures are taken from our Federal Form 990 which is filed with the Internal Revenue Service and posted on our web site and audited by an independent auditor using Generally Accepted Accounting Principles. This financial record not only meets, but exceeds standards of program efficiency set by most charity evaluators.
4. In 2008, Freedom Alliance spent a total of $6,745,717. Of that:
•79 percent ($5,317,970) was spent on Program Activities 14 percent ($945,950) was spent on Fundraising 7 percent ($481,797) was spent on ManagementIn 2007, Freedom Alliance spent a total of $7,461,350. Of that:
• 81.5 percent ($6,084,474) was spent on Program Activities • 13.5 percent ($1,011,501) was spent on Fundraising • 5 percent ($365,375) was spent on Management
In 2006, Freedom Alliance spent a total of $7,064,839. Of that:
• 77 percent ($5,434,538) was spent on Program Activities • 18.5 percent ($1,308,414) was spent on Fundraising • 4.5 percent ($321,887) was spent on Management
5. The blog posting accuses Freedom Alliance of spending money intended for student scholarships on other expenses. This is FALSE. Freedom Alliance has distributed $3.4 million in Scholarships and created a Scholarship Trust Fund with the additional money that we have raised for that program. That fund now contains $15 million, over $10 million of which has been raised by Hannity and the concerts. Our scholarship program is managed with the understanding that it will be needed for at least the next 20 years as there are children who will ultimately receive a scholarship who are now only a few years old. As indicated on our Federal Form 990, these funds are restricted and used only for future scholarships.
6. Our Scholarship Fund is one of four programs operated by Freedom Alliance. Supporters may donate to a specific program or for general operating purposes. In 2008, Freedom Alliance received $2.1 million in scholarship donations. The same year, we awarded $802,250 in scholarships and applied $1.3 million to our Scholarship Trust Fund. The funds donated by Sean Hannity directly — or through the proceeds of the Freedom Concerts — and the support of thousands of Americans are used for these purposes:
• Freedom Alliance Scholarship Fund: Providing scholarships to those whose parents have been killed or severely injured in their service to our Country. There is now over $15 million in the scholarship fund for the students as they come of age.
• Support our Troops: Many events each year are planned and executed by our staff to show appreciate and provide special opportunities for those actively serving in the military.
• Leadership Academy: A program for high school students in which they are encouraged and trained to serve their country.
These programs would not be possible without the support of Mr. Hannity and many others.
We are proud of our work and numerous accomplishments. We are grateful to our supporters whose voluntary contributions make it possible and we thank you. While it is discouraging to have our record misrepresented in such a malicious way, our work is important and, with your support, it will continue.
Respectfully,
Thomas P. Kilgannon Oliver L. North President Founder & Honorary Chairman
Tim Mak at FrumForum:
Schlussel Accusation: Sean Hannity improperly benefited from Freedom Alliance by charging private jets, hotel stays and luxury cars.
Freedom Alliance’s press release today stated categorically that they have “never provided planes, hotels, cars, limos, or anything else to Sean [Hannity] … to be clear Sean pays for all his own transportation, hotels, and all related expenses for himself and his family and friends and staff.” We are satisfied that this is true.
It is true that Freedom Alliance spent $60,000 on aviation services in 2006, but there is no evidence that this was for Sean Hannity’s benefit, and it seems unlikely that the money was used to lease a Gulfstream 5. Rates for G5 aircraft average around $8,000 an hour. $60,000 would not buy much at that rate.
We have also been able to confirm that Sean Hannity has no operational control over the organization. Nor is he even a member of the group’s board.
If Schlussel stands behind her statement, then she will have to do better than a quote from a blind source, who is, as she admits, a friend of a friend.
Schlussel Accusation: Too Little of Freedom Alliance’s Spending Has Gone to Program Outcomes.
FrumForum has intensively investigated Freedom Alliance’s 990 Forms, which have been submitted to the IRS and checked by an independent auditor.
Debbie Schlussel alleges that only $1 million of the organization’s $8.8 million in revenue was going to soldiers and scholarships in 2008. This figure is the product of a misleading and selective reading of the organization’s tax forms.
The numbers that Schlussel cite refer to direct financial transfers to individuals – that is, if there is a direct grant that Freedom Alliance gives to a soldier. This does not include all the positive work that doesn’t involve a direct grant.
Freedom Alliance also spends money on non-cash benefits for military families, involving things like taking soldiers to sporting events and sending care packages to troops.
The highest paid employee earned $152,000 in 2006. The second highest paid employee earned $83,000. In 2007, Freedom Alliance spent about $1 in $7 on salary and benefits.
Total staffing costs may seem high, but they are not out of line with what is spent at many other charities. For example, the Armed Services branch of the YMCA spent about $1 in $2 on salaries and benefits in 2008.
Schlussel Accusation: Soldiers Get Grants of Very Low Value
Schlussel is unhappy with “the fact that in each year’s tax returns soldiers described as having brain trauma injuries, multiple amputated limbs, and severe burns over most of their bodies get a few hundred bucks each from Freedom Alliance and in almost every case, no more than $1,000.”
However, this accusation is much weaker when you examine the Department of Defense regulations regarding donations to active duty soldiers.
According to the DOD Joint Ethics Regulation, gifts with a value of over $1,000 must go through a lengthy bureaucratic process which involves ethics officials. Calls to the Department of Defense confirmed this point.
What becomes clear is that there is a bureaucratic process to get approval from an ethics official, and that the costs of working through the bureaucracy for this purpose may want to be avoided by a charity, especially one that is working in a lot of other areas.
Schlussel also decries Freedom Alliance donations of less than $1,000, complaining for example that Freedom Alliance only gave $200 to a serviceman who lost both legs and his left arm. FrumForum has determined that lower-value grants like these are approved for specific purposes, often requested by a DOD case officer. This applies to cases where, for example, a serviceman may need a bus ticket home to visit his family.
The sums may seem small, but a soldier who is already receiving a government benefit may greatly value an airline ticket that goes above and beyond the Department of Defense’s budget.
Schlussel Accusation: Too Little Money Is Being Spent on Scholarships for Children of the Fallen
Schlussel complains that “167 students got an average of just $4,803.89 each in tuition. With the amount this charity raises, these kids should all be getting a free ride paid for by Freedom Alliance.”
The scholarships that she is referring to are considered and approved annually, meaning that a freshman can qualify for about $20,000 over four years.
Further, $4,800 covers more than a year’s tuition at an average Catholic private school and a substantial portion of tuition at many colleges. For example, it nearly covers a year’s tuition at the University of Georgia ($4,900), and covers about a third of a year’s tuition at the University of Michigan ($11,600 for freshmen, $13,000 for upper-classmen).
Overall, Freedom Alliance raised $2.1 million for scholarships in 2008. About $800,000 of that went to scholarships for that year. Schlussel claims that the remainder, “$1,238,636 – all of which was supposed to go to scholarships for these kids of the fallen – went to Freedom Alliance.”
FrumForum was able to confirm with Freedom Alliance that the $1.2 million that Schlussel cites did not go into the general Freedom Alliance revenues, but instead to the organization’s Scholarship Trust Fund.
Why didn’t Freedom Alliance spend all of its $2.1 million on scholarships that year? Considering your average active duty combat soldier is in his mid-20s, many fallen soldiers have children that are not of age to go to college. Saving a substantial part of funds is simply good planning – the process of funding children of the fallen will continue for fifteen to twenty years. The organization’s trust fund now stands at around $15 million.
Schlussel Accusation: Freedom Alliance’s Postage Costs Are Too High
Debbie Schlussel complains that Freedom Alliance spends too much on postage. Freedom Alliance’s listed cost for postage was $775,599 in 2008, which may seem high given their overall expenses. However, Freedom Alliance sends care packages to active duty soldiers in Iraq and Afghanistan, which explains a good deal of the cost behind the postage figure.
Comparing Freedom Alliance to other groups that specialize in sending care packages, Freedom Alliance’s expenditures seem ordinary. For example, Operation Gratitude is a group that specializes in “sending care packages addressed to individual Soldiers, Sailors, Airmen and Marines deployed overseas.” When reviewing their tax forms, FrumForum found that they spend similar amounts on postage. Operation Gratitude spent $773,680 in 2008; Freedom Alliance spent $775,599.
More Frum:
Our friend John Guardiano tweeted this afternoon: “Earlier today @DavidFrum asked why conservatives were “ignoring” the charges against Sean Hannity. Now we know why: because they were bogus!” The charges were indeed bogus. But sadly, that’s NOT “why” they were “ignored.” The people who ignored the charges did not know the charges were bogus, and in almost no case did they make any effort to find out. If conservatives now know the charges against Hannity are bogus, it’s because we at FrumForum asked on their behalf.
Freedom Alliance put out a statement earlier today. But that statement was not fully responsive to the charges. And while we appreciate Freedom Alliance’s willingness to invest the time to answer our questions, too often they seemed to take for granted that their plain statement should suffice to dispose of all concerns.
Conservatives rightly demand accountability from government. We need an accountability culture within our own institutions too however. We’re delighted to report that Sean Hannity has not betrayed his fans’ trust. But remember that old Reagan saying about needing to verify as well as trust? More of that please.
Andy McCarthy at The Corner:
The last time I was on the show a few weeks ago, Sean had just announced that his new book, Conservative Victory, would soon be released. With his platform he could have made a ton of money on it. But in a tradition we should laud here at NR, he’s in it to make a point, not a profit, so he insisted that it be put out in paperback at a modest price so that he could get the message out. As K-Lo points out, he and his wife give goo-gobs of money to our troops and, especially, our fallen heroes. Why do you know that? Not because of Sean. His friends feel it’s important to defend him against a libel. If Sean had his way, he’d keep giving his time, his money, and his energy without anyone knowing the details. He’s from a long lost tradition in which doing the right thing for America is the least we can do, not something we expect a medal for.
It’s a ritual among the millions of Hannity fans that when they call in to Sean’s radio show, they say, “You’re a great American.” The reason the ritual got started — and the reason it’s not stale — is that he really is a great American. It’s a bad sign of the times that anyone should feel compelled to make such an obvious case, but, like K-Lo, I’m proud to make it.
Michelle Malkin:
My Fox News colleague and friend Sean Hannity has devoted countless hours helping the Freedom Alliance — which has a four-star rating from Charity Navigator – raise money for the dependent children of American soldiers, sailors, airmen and Marines who have been killed or permanently disabled in the line of duty. The charity funds scholarships to students who have lost a parent on the battlefield in Persian Gulf War, the 1983 terrorist bombing of the Marine Corps barracks in Beirut, Lebanon, and terrorist attacks on the USS Cole and the Pentagon. Sean has hosted Freedom Concerts across the country and helped raise millions for troops and their families
[…]
Indeed, I’ve known her a long time, linked her work and praised her reporting over the years, and once made the mistake of sympathizing with one of her old gripes about Sean. She has accused me (and everyone else on the planet) of stealing her work, hating Jews, and being less intelligent, less brave, and less successful than she is. Some very vindictive people will never be happy and have made it their life’s mission to drag the world down with them. It is very, very sad.
And one more thing: Does David Frum realize what an ass he made of himself?
Frum responds to Malkin:
Michelle’s defense of Sean Hannity consists of three points:
1) An invocation of the heroism of the slain soldiers who have received citations from the Freedom Alliance. (Which proves nothing about the charity.)
2) The Freedom Alliance’s own press release. (Which is assertion but not proof.)
and 3) The reporting done by the FrumForum website! Malkin mentions the names of the reporters, but not, ahem, the name of the place at which the work was published. (Voila.)
Michelle Malkin might pause to consider the irony that those of us who do not stand up and salute at the mention of Sean Hannity’s name were the people who did the work that rebutted the allegations against him.
And then, as a matter of manners: If you’re going to rely on other people’s work, don’t insult them for doing it.
John Guardiano at FrumForum on Frum:
So first try and trash a man’s character and reputation without knowing all the facts. Then when the facts prove you wrong, admit this, but claim that it somehow proves your journalistic virtue. And then proceed to gratuitously dump on the charitable efforts of your target — despite his manifest innocence!
Needless to say, this is neither gracious nor classy; and it doesn’t correspond with the David Frum that I know, like and admire.
To be sure, there is nothing wrong with hard-hitting criticism of your political friends and allies. I myself, in fact, am often quite critical of many conservatives, including John McCain, Robert Spencer, and Ralph Peters.
What’s more, I have defended David, publicly and in print, for his criticism of Mark Levin and Rush Limbaugh.
But you attack a person’s ideas and policies, not the man himself. And you limit your criticism to what is known and truthful, not what is unknown and possibly false.
That’s why Dan Rather’s stories about Bush’s alleged National Guard failures were enough to drive Rather from journalism. Rather, you will recall, had made allegations on air that his reporting simply couldn’t support or back up. Rather charged Bush with being AWOL for much of his required National Guard service.
It would have been a great and legitimate story had Rather been able to prove it, but he could not. Rather’s reporting was flawed and inadequate. But rather than admit error, Rather forced the issue and thus committed an act of journalistic malpractice.
David Frum has not committed journalistic malpractice. In fact, quite the opposite: he committed today an important and civic-minded act of journalism; and for that he and Tim Mak are to be commended. Both gentlemen, after all, devoted themselves to ascertaining the truth or falsehood of Schlussel’s serious allegations against Sean Hannity.
But David never should have published these allegations in the first place unless and until he knew they were true or false and could say so with a reasonable degree of certainty!
David failed that test today; and, in so doing, he failed himself, journalism, and the conservative movement. Even worse, David initially helped smear a man who, so far as we can tell, has done absolutely nothing wrong other than try and raise money for severely wounded war veterans and their families.
David, fess’ up. You made a mistake. And you owe Sean Hannity an apology.
Erick Erickson at Redstate:
I know the value and necessity of cleaning up our own side. I regularly do it. But the good work the Freedom Alliance does means those who cast stones at it should check, double check, and check again before trying to smear it. Same with Sean Hannity. He does tremendously good work for our soldiers, sailors, and veterans.
Schlussel responds to Freedom Alliance and others:
The liars and frauds at Freedom Alliance want to keep the gravy train going for them and their cronies. So, instead of actually refuting a single fact, they make claims without any hard evidence . . . because they don’t have any. None of the circle-the-wagons, fraudulent “conservatives” defending this group have dared post the tax forms because they tell the unvarnished truth. One of the “prominent bloggers” who posted the phony response is Erick Erickson, a nut from Kentucky, who supports the equally nutty, pro-Iran, anti-American, anti-Gitmo Rand Paul, and who defended Emily Zanotti, the lunatic who has been stalking me for four years, who praised Muslim death, rape, and torture threats against me and my family, and who recently lost a scurrilous, unhinged attempt to threaten my free speech rights by trying to challenge my law license (which she did with the participation of a number of the bloggers now defending Freedom Alliance). And I love how because the wasteful, lying charity claims in its response that Vannity paid for all his travel (he, in fact, paid for none of it and it was in fancy private planes, which I’ll tell you about in the coming days), that’s now “fact.” Yup, repeating CYA press releases by perpetrators is now deemed an “exhaustive investigation.”
Here is my initial response to Freedom Alliance’s extremely weak PR attempt at covering its hide (I will be posting more, next week, as I’ve discovered even more sleaze on the group’s part):
In fact, the Freedom Alliance “response” doesn’t answer any of the questions I raised and goes on to lie more. They don’t address why they gave a triple amputee only $200—and in fact there are many of these examples provided in their tax return addendum, but I only cited a few for brevity’s sake. They also lie and claim that they gave a lot more money to charity b/c they categorize it as “program expenses.” But I’m sorry—calling over $3 million in consulting fees, printing, and postage “program expenses” doesn’t change the fact that it still went to their cronies, not to a fund and not the soldiers who only got on average less than $900 apiece. It also doesn’t change the fact that out of the money spent (I didn’t count the money they claim they raised for their scholarship fund in my percentages or the figures would have been even more outrageous against Freedom Alliance), the vast majority of spending goes to those kinds of expenses.
Also, the “scholarship fund” is really a war chest for something else, since it isn’t being used to fund scholarships for kids of soldiers now. If it has $15 million dollars, as they claim, then the interest alone should fund a free ride for all of the soldiers’ children currently in college. What are they waiting for? Likely, to convert the fund to something else, not what the donors intended. Do you really think people who held bake sales and bought tickets to the concerts thought they were funding a Merrill Lynch account for a nebulous promise that some kids of fallen troops might go to college from it in 20 years? No. They thought they were funding kids to go to college on a full ride now. But it was all a lie.
As I noted, Hannity said on his nationally-syndicated radio show that a $30,000 donation from Boca Java will fund a full year for one of these kids in college. Sadly, it never did. I don’t think anyone listening to his show thought that he meant 20 years from now. That’s not what Boca Java thought, according to a company spokeswoman.
Sean Scallon at The American Conservative:
Were the “Freedom Concerts” a part of the same kind of scam that has infected the “movement” for the past 30 years? It remains to be seen. But before you make your next donation to your favorite “cause” you may want to ask first where the money is going and how its being spent, otherwise it could very well wind in some stripper’s G-string in D.C. while you’re out beyond the Beltway believing it’s helping a soldier’s kid go to college.
UPDATE: The Huffington Post
UPDATE #2: Joe Conason in Salon
Around The Sphere 
