WASHINGTON -- Two watchdog groups filed a complaint yesterday against House majority leader Tom DeLay, asking that the Internal Revenue Service deny a tax exemption to a DeLay-backed charity that will throw parties and offer a luxury suite for major donors to watch President Bush's acceptance speech at the 2004 Republican Convention.
"Celebrations for Children" will raise money for abused and neglected children by using the events at the New York convention in August as a drawing card, paying for them with a portion of the donations to the group.
"Representative DeLay is using the nation's charity tax laws and the pretext of helping children as a cynical cover to raise and spend huge amounts of prohibited soft money to finance political activities," said Fred Wertheimer, president of Democracy 21, a nonpartisan nonprofit.
DeLay's office says the fund-raising is for a worthy charitable cause and that the efforts of DeLay and his wife have been a "longstanding endeavor to build a permanent safe home" for foster children.
"Democracy 21 should have its protected tax status revoked for engaging in such obvious one-sided political activity intended to benefit its favorite charity -- the Democratic Party," said DeLay spokesman Stuart Roy.
Wertheimer's organization and the Campaign Legal Center allege that "the DeLay scheme" violates IRS law. DeLay's group has tax-exempt status as a charity, and therefore should operate exclusively for charitable purposes, they contend. The goal is for 75 percent of the money raised by the convention events to go to the children's charity, said Craig Richardson, executive director of the group created by DeLay. A number of mainstream charities spend less than that for programs.
The complaint says that the DeLay-backed charity will be used to evade restrictions under the new campaign finance law that prohibit raising or spending corporate, union, or unlimited donations in connection with a federal election. Under the law, a presidential nominating convention is counted as an election.