Fed funds aid Mollohan charity

Value of gifts to foundation not reported

13 Nov 2007 // A private foundation set up by Rep. Alan Mollohan to honor his father indirectly received subsidies from federal earmarks without declaring the value of the contributions, documents show.

Since at least 2002, the Robert H. Mollohan Family Charitable Foundation program manager's salary has been paid by the West Virginia High Technology Consortium Foundation. The Consortium is funded primarily with federal funds earmarked by the congressman.

The Mollohan Foundation also did not pay rent or other costs for its office at the High Tech Consortium's headquarters in the I-79 Technology Park, in Fairmont, according to documents filed with the Internal Revenue Service in 2006.

It's impossible to tell from the IRS returns how much the High Tech Consortium Foundation paid for the Mollohan Foundation's leader's salary.

The returns list three program directors since 2002. In each case the salary was not included on either organization's IRS returns.

The Mollohan Foundation did not list the names or salaries of any employees on its IRS returns, though the documents indicate that the organization had one employee. A 2004 press release on the Mollohan Foundation's Web site says that former Program Manager Teah Bayless was hired by the High Tech Foundation as program manager of the Mollohan Foundation.

The Mollohan Foundation also did not declare the value of the inkind(non-monetary) contribution for its free rent on its IRS return. The return lists only a $10,000 cash donation by the High Tech Foundation and a note that it receives "donated services or the use of materials, equipment, or facilities at no charge or at substantially less than fair rental value."

Beth Michalec, current program manager of the Mollohan Charitable Foundation, said she did not wish to comment on the donations. In a newsletter dated Winter 2007, Michalec writes that she started at the Foundation in April 2006, and took over as program coordinator from Ingrid Loy earlier this year.

"I spoke with a couple of people on our board and we have decided that I would rather not comment about this," Michalec said.

Mollohan has been under Justice Department investigation since last year over whether he benefited financially from steering money to several nonprofit groups in his congressional district.

The High Tech Consortium gets most of its revenue from government grants and contracts, most of which are earmarked by Mollohan. The Consortium is one of several nonprofit organizations that turned over documents as part of the federal investigation.

Jim Estep, president and chief executive officer of the WVHTCF, did not return a phone call from The Dominion Post on Thursday.

Mollohan spokesman Gerry Griffith said the congressman was in conference with the Senate and would not be available Thursday. Griffith said he doesn't know anything about the High Tech Consortium or the Mollohan Charitable Foundation.

"I don't work for either of those organizations," Griffith said. "That's outside my realm of knowledge."

Taxpayers should be concerned about the donations from the High Tech Consortium to the Mollohan Foundation, said Tom Schatz, presidents of Citizens Against Government Waste.

Schatz said the money appears to be coming from federal earmarks and supporting Mollohan's private foundation. The arrangement raises a lot of questions about where the federal money is going.

"It's highly unusual to have a nonprofit organization that receives money and spends money but doesn't pay anyone to do anything, and apparently doesn't pay rent," Schatz said. "How can they have furniture, desks, files without paying rent for a space? What is the physical location of all of these items?"

Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said nonprofit organizations need to declare when they receive an in-kind contribution or when an organization is paying the salary of an employee.

Though Mollohan might not be personally benefitting from the contributions, Sloan said it's troubling that federal money is going to support his private charitable foundation.

"I think Congress shouldn't be allowing it," Sloan said. "I think that Alan Mollohan, considering the fact that he's under federal investigation, would be a little more careful. Earmarking to benefit your family foundation is just flat-out wrong."