Mollohan Foundation Has Little Family Money

Posted March 27, 2009 at 6:04pm

Despite the impression left by its name, there is not much Mollohan money in the Robert H. Mollohan Family Charitable Foundation.

The foundation — named for the late father of Rep. Alan Mollohan (D-W.Va.), who serves as the secretary of the organization — is essentially a project of the West Virginia High Technology Consortium Foundation, a nonprofit group that Mollohan helped create and has provided with millions of dollars’ worth of earmarks and federal contracts.

The only staff member of the Mollohan family foundation is an employee of the West Virginia High Technology Consortium, hired solely to run the Mollohan foundation.

The resources for the family foundation’s charitable works come largely from an annual golf tournament, not the Mollohan family, and the high-tech group provides the office space, the Web site and the telephones for the Mollohan foundation, according to various public records. The WVHTCF Web site lists the family foundation as a program of its office park development group, which runs the building named for the Congressman that houses both the WVHTCF offices and the Mollohan foundation.

In a statement to Roll Call, Mollohan said last week, “The Mollohan Family Foundation was organized following the death of my father, Robert H. Mollohan, a former congressman from West Virginia, and was named in his honor. … The Mollohan Family Foundation assumed responsibility for operating educational and scholarship programs previously operated by the High Tech Foundation. In exchange for taking on this responsibility, the Mollohan Foundation receives staff and overhead support.—

The Congressman emphasized that “the Mollohan Family Foundation does not receive any support from federal dollars. The staff time and overhead are supported by the High Tech Foundation through non-federal, unrestricted funds. … The Mollohan Family Foundation has subjected itself to an annual audit and has consistently received audit results without exceptions (i.e., without any noted problems).—

Aime Shaffer, the current program manager for the Mollohan foundation, told Roll Call, “I am an employee of the WVHTF … and hired by them to carry out the educational goals of the high tech foundation though the Mollohan foundation.— Shaffer said the Mollohan foundation is her only job at WVHTF.

An archived press release on the Mollohan foundation Web site describes the hiring of one of Shaffer’s predecessors this way: “Teah Bayless … joined the staff of the West Virginia High Tech Foundation Consortium as Program Manager of the Robert H. Mollohan Family Charitable Foundation.—

Roll Call reported earlier this month that the high-tech consortium had provided at least $75,000 in free rent and services to the Mollohan foundation, but the total is probably far higher than that.

The high-tech consortium — created by Mollohan to provide job training and serve as an incubator for small high-tech firms in his Congressional district — reported to the Internal Revenue Service that it provided $76,232 in free rent and administrative support to the Mollohan foundation in 2005 alone. None of the consortium’s other tax returns make any mention of a similar gift.

But the Mollohan Foundation on its tax returns has never reported paying rent or telephone bills and has never reported more than $10,000 in salaries, which covers payments to student interns, according to one tax document. In each year since 2004, the foundation has checked a box on its tax forms indicating that the organization received “donated services or the use of materials, equipment, or facilities at no charge or at substantially less than fair rental value.—

In 2007, the only year for which the foundation volunteered a value for those donations, the total was reported as $34,562. The tax form does not require foundations to detail what services were provided or by whom.

Mollohan told Roll Call that it is inaccurate to suggest that the Mollohan foundation “is run by— the high-tech consortium because: “The Mollohan Family Foundation is controlled by its own board of directors, which is totally independent of the West Virginia High Technology Consortium Foundation.—

The Mollohan foundation board of directors includes the Congressman, his sister and his mother, a staffer from Mollohan’s Congressional office and several longtime friends and supporters of the Congressman. The treasurer for the foundation is Raymond Oliverio, who is also the executive vice president of the high-tech consortium.

The Mollohan foundation is frequently referred to in news articles as the Congressman’s “family foundation,— but it does not operate like most other family foundations.

Though the IRS has no regulations restricting the use of the terminology, a “family foundation— generally refers to a private philanthropic organization set up by a wealthy family or an otherwise limited pool of donors. These “private foundations— operate under different tax laws and distribution requirements than public charities, which raise money from a broad group of donors.

An IRS database of charitable organizations lists 32 charities in West Virginia that use the terms “family— and “foundation— in their names. All but two of these organizations are private foundations; the two exceptions are the Family Medicine Foundation of West Virginia and the Robert H. Mollohan Family Charitable Foundation.

Nationwide, the IRS lists 945 organizations that call themselves “family charitable foundations.— Only 37 of these — including the Mollohan foundation — are public rather than private charities.

The Mollohan foundation’s tax returns offer no evidence that the Mollohan family has provided significant resources for the foundation.

The foundation’s tax return for 2000 — its first year of operation — indicates revenues of $233,789. About $20,000 of that total is reported as income from a special event, while the remaining $211,000 came in 27 individual contributions of $5,000 to $20,000, on various dates, which would indicate that the Mollohan family did not provide one large gift to the foundation.

The tax returns for ensuing years show a similar pattern of donations, with the bulk of the foundation’s income coming from an annual golf event or sales of stock. In the years for which donor names are available, many of the donors are companies that Rep. Mollohan has helped to secure earmarks or government contracts, but none of the named donors are Mollohan family members. In a Dec. 31, 2006, financial report, the foundation indicated that the annual golf tournament “accounts for the majority of the organizations’ contributions and expenses.—

Shaffer told Roll Call that news stories about the Mollohan foundation invariably focus on the political connections between the Congressman and the donors to the foundation, but overlook the substantive charitable work the foundation is achieving. Since its inception in 2000, the Mollohan foundation has provided more than $750,000 worth of scholarships for West Virginia students to attend college and grants to community-based charities, according to its tax records.

“We do a lot of good here,— Shaffer said. “I think that is getting lost … we give so many scholarships to students that wouldn’t be able to go to college if they didn’t get a scholarship.—

The foundation’s tax returns indicate that students must reside in Mollohan’s Congressional district to be eligible for scholarships, but Shaffer said the foundation is actually involved in charitable projects all around the state.

Meredith McGehee, policy director of the Campaign Legal Center, said Mollohan’s foundation does not appear to violate any specific House rules “other than it looks unseemly.— The foundation provides “the political benefit to Mollohan of kids receiving scholarships affiliated with the Mollohan name … without [Mollohan] having to put up any of his own money or earmark any specific federal funds for that self-named foundation.—