Is Organizing For Action Too Close To The White House?

Organizing for Action, the social welfare group formed out of President Obama's campaign organization, has stumbled over its own fundraising rules. Now it's trying to clean things up.

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Next we're going to unravel another potential political scandal. It involves a tax-exempt advocacy group with ties to President Obama. Organizing for Action is saying it broke its own rules against hooking up big donors with White House officials. Critics are unimpressed. NPR's Peter Overby breaks it down for us.

(SOUNDBITE OF CHEERING)

PRESIDENT BARACK OBAMA: Hello, OFA. Hey.

PETER OVERBY, BYLINE: This was President Obama last month addressing the annual Organizing for Action Summit here in Washington. Organizing for Action is a tax-exempt social welfare group. It grew out of the Obama for America reelection campaign, keeping the grassroots network alive while promoting the Obama agenda.

OBAMA: I just always get excited when I have a chance to see OFA, because what I know is that each and every day you are out there in your communities talking to your friends, talking to your neighbors, talking to your co-workers, and that's how change is made.

OVERBY: While Obama was inspiring the troops, OFA officials were trying to clean up a mess. Briefly. A potential big donor asked OFA for White House help with a problem. Breaking the group's own rules, executive director Jon Carson set up a meeting. But the White House official thought the meeting was wrong and he walked out. Then there was trouble with the donor's $100,000 check. Actually, it came from a friend of his - a doctor with an old conviction for Medicare fraud. OFA didn't want the tainted money. But an OFA consultant suggested it could go to another liberal social welfare group. Unlike OFA, that group doesn't disclose its donors. The referral plan fell through and the consultant lost her job. OFA and White House officials declined to talk on tape about any of this. Carson apologized for his role and OFA says it won't steer donors to other groups anymore. But ethics watchdog Fred Wertheimer says there's still a fundamental problem. OFA is too close to the president and too focused on raising money.

FRED WERTHEIMER: The best thing the president of the United States could do is shut this down. This is a danger to the integrity and credibility of his presidency.

OVERBY: Richard Painter was the chief White House ethics officer during President George W. Bush's second term. He says the law is clear: Except for the president and vice president, nobody in the White House can do fundraising.

RICHARD PAINTER: And their time shouldn't be quid pro quo for donations, and there shouldn't be anything that even the circumstantial evidence looks like it.

OVERBY: Still, OFA may be just the beginning of something new - a tax-exempt advocacy group tightly linked to the president and dedicated to the presidential agenda. Michael Toner is a campaign finance lawyer and former chairman of the Federal Election Commission.

MICHAEL TONER: For all practical purposes, this entity is an extension of the White House.

OVERBY: He says Obama seems to be setting a precedent.

TONER: Each succeeding White House tends to emulate these kinds of practices from its predecessors.

OVERBY: So if OFA stays out of trouble...

TONER: And if there's a judgment that it effectively helps to advocate the president's policies, I think we'll see similar kinds of organizations in future White Houses.

OVERBY: Organizations that further concentrate big money and political clout around the president. Peter Overby, NPR News, Washington.

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