Watchdog files complaint against 'deceptive and illegal' Hannity concerts

Allegations about a charity connected to a key Fox News personality have floated across the web for years, but less than two weeks after a conservative blogger took aim, a nonpartisan watchdog group that tends to focus on liberal issues has filed a complaint.

Citizens for Responsibility and Ethics in Washington (CREW) and Votevets.org have filed a complaint charging Sean Hannity's Freedom Concerts with deceptive and illegal marketing practices.

The concerts, hosted by Freedom Alliance, raise funds to provide scholarships and services to disabled veterans and their families. According to an email distributed by CREW, the complaints "allege Lt. Col. North's Freedom Alliance has violated its charitable tax status by engaging in prohibited political activities. In addition, CREW's complaints charge Mr. Hannity's Freedom Concerts has engaged in deceptive and illegal marketing practices by suggesting that all concert ticket sale revenue goes directly to scholarships for children of killed and wounded service members."

Hannity has promoted the concerts on his show, making statements such as, "Every penny, 100 percent of the donations are applied to the Freedom Alliance scholarship fund." Similarly, promoting the concert on Hannity's program, Lt. Col. North has said, "There's no overhead. There's no expenses taken out. Every penny that's donated or that's raised through things like the Freedom Concerts goes to the scholarship fund." In addition, Hannity has pledged that all the proceeds of his new book, "Conservative Victory," will go to Freedom Alliance.

CREW's IRS complaint against Freedom Alliance asks the IRS to consider revoking its charitable tax status because the organization has engaged in prohibited political activities. When Freedom Alliance first formed in 1999, the IRS conditioned its charitable tax status on the organization removing politically partisan materials from its website and warned it not to intervene in political campaigns. Despite those warnings, Freedom Alliance's website includes links to Lt. Col. North's columns, which are largely political, rents its mailing list to a communications firm that works for organizations that "seek to reach Republicans and conservatives across the United States," and hosts an annual "Freedom Cruise" with Republican politicians such as former House Speaker Newt Gingrich and Republican National Committee Chairman Michael Steele. In addition, Freedom Alliance appears to have a relationship with Team America, a PAC formed by Rep. Tom Tancredo (R-CO), dedicated to anti-immigration efforts and supporting conservative candidates.

Earlier this month, columnist and blogger Debbie Schlussel claimed that Hannity is profiting from a charity that raises money for severely injured US soldiers and the children of troops killed in action, and she described the Freedom Alliance as "a huge scam."

"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 ferret [sic] the Hannity posse of family and friends in high style," Schlussel writes.

"And, despite Hannity's statements to the contrary on his nationally syndicated radio show," she continues, "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."

Schlussel cites an anonymous source who she says told her that the promoter of Hannity's fundraising "Freedom Concerts" figured the cost of a Gulfstream jet, a "fleet" of luxury SUVs, and high-end hotel suites for Hannity's entourage as amounting to over $200,000 per event.

"To make matters worse," Schlussel continues, "Hannity deliberately lied to his radio audience about how much money was going to the kids of the fallen American soldiers. On May 28th of last year, Hannity told his listeners, 'Our new sponsor, Boca Java, just pledged $30,000 to the Freedom Concerts. That will provide a full one-year college scholarship for a kid of a fallen soldier.' In fact, Freedom Alliance's tax forms indicate it has never given any student more than $6,000 in a school year, and usually it's been far less."

In a statement, the president of Freedom Alliance responded to Schlussel's allegations.

"Freedom Alliance has never provided planes, hotels, cars, limos, or anything else to Sean," the statement reads. "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."

It then goes on to cite financial figures, taken from the same tax filings analyzed by Schlussel, as evidence that roughly 80% of its expenditures are devoted to program activities.

CREW Executive Director Melanie Sloan stated, "There is little more despicable than preying upon the generosity of Americans by deceiving them into believing they are aiding the children of killed and wounded service members when the truth is most of the money is going to a for-profit venture." Sloan continued, "Americans deserve to know whether this high-profile charity allegedly dedicated to helping veterans and their families is really doing what it says it is."

Jon Soltz, the Chair of VoteVets.org said, "If not every dime is going to those who wore the uniform, then people have the right to know that. It really is that simple. There are many wonderful charities to help troops and veterans that are completely transparent and truthful about where their donations go. If Sean Hannity and Freedom Alliance are being untruthful, that hurts all those other charities, because it only causes people to hold back donations to worthy causes in the future. We need to get to the bottom of this, quickly, and the FTC and IRS must take any corrective action that’s deemed necessary."

Click here to read CREW s complaint to the IRS and the complaint’s citations, and click here to read CREW s complaint to the FTC and the complaint's citations.

Allegations about waste committed by the charity first surfaced as early as 2007. A Daily Kos diarist named "davefromqueens" wrote, "After weaving through voluminous amounts of carefully crafted, parsed language and following up on the reporting of news hounds and a daily kos diarist it appears that Sean Hannity and Oliver North are using the name of dead American soldiers to garner profits for a right wing organization masquerading as a charity."

This audio is from CREW, recorded March 29, 2010.

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