Tag Archives: Clarence Thomas

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Justice Clarence Thomas and the Horatio Alger Association: What The New York Times Didn’t Tell You

On July 9, 2023, The New York Times ran a 4,314-word story about Supreme Court Judge Clarence Thomas’s connections with an exclusive club, the Horatio Alger Association of Distinguished Americans Inc.. 

“His friendships forged through Horatio Alger have brought him proximity to a lifestyle of unimaginable material privilege,” the reporters wrote, leading into multiple examples of benefits he received from a broad cohort of wealthy and powerful friends and insinuations that Thomas had been compromised.

Citing the Association’s website, the story said the non-profit group, portrayed as a group of wealthy and influential believers in meritocratic success, has awarded more than $245 million in college scholarships to roughly 35,000 students since its founding in 1947. The Association has been tax-exempt since Oct. 1952.

What the reporters didn’t do was look deeper at the Association. It has quite a dubious history.

In 1988, while a business reporter at The Oregonian newspaper, I researched and wrote a story about the Association, which had inducted two prominent Oregonians. The story (which won plaudits from the Columbia Journalism Review) noted that from 1985 through 1987 — the latest period for which tax records were available at the time — the Association raised $2.1 million. During those three years, The organization spent $1.7 million. Just $315,000 of that went to scholarships.

Rather than funding scholarships, most of the association’s outlays went to executive salaries, office expenses, books devoted largely to laudatory stories of the members’ lives, annual banquets at places such as New York’s Waldorf Astoria Hotel and the Westin Galleria Hotel in Houston and contracts with a New York public relations firm.

The amount of salary and benefits going to the association’s executive director alone, which increased from $98,126 in 1985 to $120,154 in 1987, exceeded or almost equaled the amount of scholarships awarded in each of the past three years. Those scholarships totaled $100,000 in both 1985 and 1986 and $115,000 in 1987.

In 1987 the Association spent more on printing and publications than on scholarships. Its principal annual publication was a hard-cover book titled “Only in America Opportunity Still Knocks.” The book devoted 132 of its 192 pages to a membership list and biographies featuring informal snapshots of the members and outlines of their paths to success.

A review of the Association’s recent federal tax filings reveals it still engages in questionable financial behavior.

The IRS requires that tax-exempt organizations, nonexempt charitable trusts, and section 527 political organizations file an annual Form 990 to provide the IRS with the information required by 26 U.S. Code § 6033. In its recent filings it stated its purpose as: “(1) To provide scholarship assistance to help promising high school students (who fit the Horatio Alger profile) attend college, and (2) to spread the message that America’s free enterprise system provides the greatest opportunities in the world for personal achievement and success.”

The Alexandria, VA-based Association’s recent Form 990s (2020, 2021) reveal it has grown substantially since I wrote about it in 1988, reporting total revenue of $27,092,429 in 2020 and $20,322,852 in 2021. But its scholarship distributions still fall far short of its annual revenue.

In 2020, its scholarship grants totaled $11,223,951, just 41% of its revenue. In 2021, grants totaled $12,287,913, 60% of its revenue, which was at least better than in 2010, when its revenue totaled $19,682,336 and its grants to individuals totaled just $4,721,307.

Where has all the rest of its revenue gone?

In 2021, a whopping $2,446,876 went to salaries, other compensation and employee benefits, including $1,348,080 to Executive Director Terrence J. Giroux. Another $318,936 went to a Philadelphia, PA public relations firm, Brian Communications. A total of $552,717 was spent on “event management”, slightly less than the $1,062,380 spent on event management and production in 2020. (The Association’s Form 990s say some of that money went to Linder & Associates, but that is a property management company in Los Angeles, California. The money probably went, instead, to Linder Global Events, an event management agency based in Washington, D.C.)

The Red Bank Film Factory of Red Bank, NJ was paid $471,271 and Destin Productions LLC of Limassol, Cyprus took in $330,000 for a television marketing campaign in 2021

Another $8,527,523 went to “Other Expenses”, including legal, accounting, advertising, office expenses, travel, conferences, conventions and meetings. 

According to the Association’s 2021 Form 990, $2,739,296 went just to “Member support and meetings, including the annual board of directors meeting, annual awards week in Washington, D.C. and specialized forums.”

In other words, given the amount of its revenue, the Association falls far short of expectations in its scholarship handouts, while spending extravagant sums on compensation and other functions, such as public relations and fancy dinners for its mostly wealthy members. 

Media coverage of the Association, while frequently citing its distinguished members, such as author Maya Angelou, former Intel CEO Craig Barrett, Michael Bloomberg and NBC News anchor Tom Brokaw, also has failed to mention that its ranks include some questionable characters, such as:

  • Roger Ailes, who resigned as chairman and CEO of Fox News after being accused of sexual harassment by several female Fox employees, including on-air hosts
  • Elizabeth Holmes, former CEO of Theranos. Holmes was convicted in 2022 on four counts of wire fraud for swindling doctors and patients to use her company’s blood-testing services while knowing that Theranos was incapable of producing accurate results, according to the indictment. She was also accused of defrauding investors of more than $700 million with the fabricated claims.
  • Joe Allbritton, a Washington, D.C. power-broker who turned a blind eye to evidence that Riggs Bank, of which he was  chairman and chief executive officer, was “handling the proceeds of foreign corruption and paid paid a $16 million criminal fine over charges the bank had failed to report suspicious transactions with foreign account holders.” The judge who imposed the fine described the bank as “a greedy corporate henchman of dictators and their corrupt regimes.”

America loves stories about someone picking themselves up by their bootstraps, as in Horatio Alger’s books about  impoverished boys and their rise from humble backgrounds to lives of success, although, truth be told, you can’t really do that. Truth be told, the Horatio Alger Association of Distinguished Americans Inc. isn’t all it’s stacked up to be either.

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Sad Horatio Alger Tale: Scholarship Funds Go To Overhead, Pay to Director of Charity Exceeds Total Student Aid

NOTE: This is a reprint of a story that appeared in The Oregonian newspaper.

December 30, 1988 | Oregonian, The (Portland, OR)

Author/Byline: BILL MacKENZIE – of the Oregonian Staff | Page: A02 | 

Some of the nation’s most prominent business executives, politicians and entertainers have been donating thousands of dollars each year to an organization dedicated to providing scholarships to underprivileged young people. But most of the money has been going elsewhere.

From 1985 through 1987 — the latest period for which tax records are available — $2.1 million was raised by the Horatio Alger Association of Distinguished Americans Inc., an organization that purports to motivate young people and provide college scholarships to high school students from around the country.

The organization, which is based in Alexandria, Va., spent $1.7 million during those three years, $315,000 of that going to scholarships.

Rather than funding scholarships, most of the association’s outlays went to executive salaries, office expenses, books devoted largely to laudatory stories of the members’ lives, annual banquets at places such as New York’s Waldorf Astoria Hotel and the Westin Galleria Hotel in Houston and contracts with a New York public relations firm.

The amount of salary and benefits going to the association’s executive director alone, which increased from $98,126 in 1985 to $120,154 in 1987, has exceeded or almost equaled the amount of scholarships awarded in each of the past three years. Those scholarships totaled $100,000 in both 1985 and 1986 and $115,000 in 1987.

The association, which was founded in 1947, was named after Horatio Alger, who in the late 1800s wrote more than 100 books chronicling the adventures of boys who triumphed over adversity to achieve success.

The association was based in New York until its headquarters was moved earlier this year to Alexandria, a suburb of Washington, D.C.

The membership roster of the organization, consisting of people nominated for the Horatio Alger Award by current members, reads like a “Who’s Who in Politics, Business and Entertainment.

Oregon is represented by two members, Robert Farrell, operator of the Newport Bay Seafood Broiler restaurants; and Harry Merlo, chairman and president of Louisiana- Pacific Corp.

Also among the association’s living members — numbering about 250 — are President Reagan; former President Ford; Sen. Robert Byrd, D-W.Va.; and New York Gov. Mario Cuomo.

The association’s diverse membership also includes H. Ross Perot, president of Perot Systems Corp.; Allen Neuharth, chairman and chief executive officer of Gannett Co.; Sam Walton, chairman of Wal-Mart Stores Inc.; Tom Landry, coach of the pro football Dallas Cowboys; entertainers Ed McMahon and Bob Hope; the Rev. Norman Vincent Peale; and evangelist Billy Graham.

The association has declined to provide information on its income and expenditures, despite being contacted by a reporter from The Oregonian twice by telephone and twice by certified letter during the past seven months.

A call in early December to the executive director was referred to the association’s director of education, Pat Brown. Brown, who acknowledged receipt of earlier letters, declined to provide any detailed information concerning the association’s operations.

Love Smith, who served as the association’s executive director until earlier this year, also declined last week in a telephone conversation to answer questions concerning the association’s finances or general operations. “Since I’m no longer with the association, I really wouldn’t care to comment,” Smith said.

Peale, 90, who served as national chairman of the association for more than 25 years, could not be reached for comment. His wife, Ruth Stafford Peale, who has served on the association’s board of directors, spoke last week, however, on her own and her husband’s behalf.

Ruth Peale attributed the allocation of a limited proportion of the association’s annual income to scholarships to the association’s desire to raise an endowment. When she was advised that the association’s tax returns indicated that an average of 80 percent of annual income in the past three years had been spent, and only 20 percent of that on scholarships, Peale said she could not explain the discrepancy.

By not responding to requests for detailed financial information, the association has failed to comply with standards published by the New York-based National Charities Information Bureau Inc. and the Council of Better Business Bureaus Inc. of Arlington, Va., regarding financial disclosure by philanthropic organizations.

The Information Bureau says in its “Standards of Philanthropy”: “Descriptive and financial information for all substantive income and for all revenue-generating activities conducted by the organization should be disclosed upon request.”

Information on the association was obtained from Form 990 returns required to be filed with the Internal Revenue Service by organizations exempt from federal income tax and from annual financial reports submitted by the association to the New York Department of State.

According to the association, its good work is tied to inspiring young people to follow the Horatio Alger ideal and awarding $5,000 college scholarships to “underprivileged but promising” high school students from around the country who exemplify that ideal.

The New York-based National Charities Information Bureau, a national organization that monitors charitable giving, recommends that philanthropic organizations devote at least 60 percent of their annual expenses to their basic program and no more than 40 percent to management, general expenses and fund raising. Less than 20 percent of the Alger association’s annual expenditures have been going to scholarships in recent years.

The inspirational element of the association’s program consists largely of Horatio Alger Day programs at high schools around the country, during which association members share their success stories and offer advice before student assemblies.

According to Farrell, speakers usually live near the school sponsoring the event, so there is little expense involved. The association’s tax records do not break out expenses associated with the school visits; but the records show less than $16,000 annually devoted to travel, conferences, conventions and meetings from 1985 through 1987.

Scholarship expenses are more clearly defined in the association’s tax records.

During the 1985-1987 period, about $1 of every $7 of association income and $1 of every $5 of association spending went to scholarships.

The spending patterns of the San Francisco-based National Hispanic Scholarship Fund Inc., which also raises and distributes money to assist deserving college students, stand in sharp contrast to those of the HoratioAlger Association. In 1987, the Hispanic Scholarship Fund devoted 80 percent of its expenditures to scholarships and only 20 percent to administrative and fund-raising expenses.

Similarly, the Los Angeles-based Hugh O’Brian Youth Foundation, which also seeks to motivate high school students through sponsorship of leadership seminars and career fairs around the country, devoted 61 percent of its $1.5 million in expenditures directly to those activities in 1987; 39 percent of its budget went to administration and fund raising.

In 1987 the Alger association spent more on printing and publications than on scholarships. Its principal annual publication is a hard-cover book titled “Only in America Opportunity Still Knocks.” The 1987 book devoted 132 of its 192 pages to a membership list and biographies featuring informal snapshots of the members and outlines of their paths to success.

“Maybe that’s just being a little ego trip for a lot of people in there,” Ruth Peale said.

The records obtained from the IRS show that some young people are benefiting from the association’s programs. During 1985-87, for example, each of 63 students received $5,000 college scholarships from the association.

There is a question, however, as to whether the members of the association are benefiting financially from their connection to the association more than the students are.

Because the association is a non-profit organization exempt from federal income tax, contributions to it are tax-deductible. Maximum marginal tax rates were 38.5 percent in 1987 and 50 percent in 1985 and 1986. If all the contributors to the Horatio Alger Association paid federal income taxes at the highest marginal income tax rates during 1985-1987, the total tax burden of the contributors could have been reduced by $732,246.

In other words, the tax loss to the federal government could have been more than double the $315,000 in scholarship awards made by the association during 1985-1987.

When told of the association’s spending patterns: Farrell said, “That’s shameful not to give out more. It sounds like they are mismanaged.”

Farrell said he had little to do with the association other than winning an award and knew little of the association’s “inner workings.”

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Joe Biden’s legacy: hold the applause

Following Joe Biden’s announcement that he would not run for president, public pronouncements and media coverage have been more hagiography than biography.

The praise has been so over the top, you’d think Joe had died and gone to heaven and folks were delivering cloying funeral orations.

Joe Biden Caricature | by DonkeyHotey

Joe Biden Caricature | by DonkeyHotey

Before the Democrats and the media canonize Joe Biden, let’s step back a bit.

The most consistent element of the comments has been the assertion that Joe is a great and good man because of his unquestioned honesty.

Not so fast.

In his 1988 campaign for the Democratic Party’s presidential nomination, Biden gave a speech that drew the attention of New York Times columnist Maureen Dowd. She accused Biden of outright plagiarizing speeches given by British Labor Party leader, Neil Kinnock.

As it turned out, not only did Biden lift text from Kinnock’s speeches; he even appropriated parts of Kinnock’s life, citing his ancestors’ ability to read and write poetry, his accomplishment of being the first in his family to attend college and, in an apparent effort to show his blue-collar roots, that some of his ancestors were coal miners. That was all true for Kinnock, but most certainly not for Biden.

Biden’s problems escalated when media discovered that he had also exaggerated his college academic record and been accused of plagiarism there. Biden claimed that he’d finished Syracuse Law School in the top half of his class when he’d actually graduated 76th of 85. He’d also and gotten an F in a law school class for plagiarizing a substantial portion of a paper from an article in the Fordham Law Review. Biden dismissed the plagiarism incidents as “much ado about nothing,” but subsequently ended his campaign.

Biden also played a major role in the Robert Bork and the Clarence Thomas hearings in 1987 and 1991 that many observers still describe as defamatory. “Joe Biden has had his finger in every tawdry hearing in the Senate Judiciary Committee in my memory,” said Mark Levin, president of the Landmark Legal Foundation, a conservative legal advocacy group. “He has lowered the standard of debate. He has politicized the confirmation process. He has used his position to defame a number of nominees, including Bob Bork and Clarence Thomas, and there’s no road too low that he won’t travel.”

Like so many politicians, Biden also has not shied away from rewriting history. Remember when Hillary Clinton claimed she was threatened by sniper fire when she visited Bosnia in 1996, an assertion that was later disproved? Biden once claimed that his helicopter was “forced down” on “the superhighway of terror” by Afghan extremists. The facts? He was in a helicopter with two other senators when a snowstorm closed in and the pilot decided to put down, after which a U.S. troop convoy took them to Bagram Airfield in Afghanistan.

Biden’s shifting versions of events continue today. In 2012, Biden said he advised President Obama not to approve the raid on the Abbottabad, Pakistan compound that resulted in the killing of Osama bin Laden. White House spokesman Jay Carney confirmed Biden’s comment. But on Oct. 20, Biden said just the opposite, that he had he privately advised Obama to approve the raid.

And let’s not forget Biden was perfectly willing to embrace and propagate the administration’s lie that the Benghazi terrorist attack that resulted in the death of American ambassador was a spontaneous reaction to an inflammatory anti-Muslim video.

Then, of course, there’s Biden’s seemingly never ending dithering on whether to enter the race for the Democratic Party’s presidential nomination. His hemming and hawing and general indecisiveness on that issue alone should tell you a lot about his suitability for the presidency.

When Biden dropped out of the selection process this time around, Hillary Clinton said she’s confident that “history isn’t finished with Joe Biden.” Let’s hope not, at least insofar as historical truth goes.