Mediamatters.com has come upon a rather interesting story through its normal channels; that is by covering conservative blogs. Evidently a conservative blogger by the name of Debbie Schlussel has discovered a number of discrepancies in a charity run by Sean Hannity.

The charity is called Freedom Alliance and it was set up to help children of 'fallen soldiers' further their education.

According to Freedom Alliance:

The Freedom Alliance Scholarship Fund honors the bravery and dedication exhibited by Americans in our Armed Forces who have sacrificed life or limb defending our country by providing educational scholarships to their children. Thousands of soldiers, sailors, airmen, Marines and Guardsmen have been killed in the War on Terror.  

These are the numbers Freedom Alliance posted at their site:

Through the generosity of thousands of Americans, the Freedom Alliance Scholarship Fund has awarded $2.5 million in scholarships to the sons and daughters of American heroes in the last several years, including:

$25,000 to the USS Cole Memorial Fund for the children of the 17 sailors who were killed in the terrorist attack against the USS Cole in October 2000.

$40,000 to the dependent children of the 21 soldiers and 33 sailors killed at the Pentagon on September 11, 2001.

 55 individual student scholarships for the 2002 academic year.

 73 individual student scholarships for the 2003 academic year.

 80 individual student scholarships for the 2004 academic year.

 95 individual student scholarships for the 2005 academic year.

105 individual student scholarships for the 2006 academic year.

113 individual student scholarships for the 2007 academic year.

167 individual student scholarships for the 2008 academic year.

http://www.freedomalliance.org/index.php?option=com_content&task=blogsection&id=7&Itemid=15

I would not know if these numbers are good or bad just looking at the site. The number of scholarships actually awarded is rather small. I mean, relatively, there do not appear to be that many individuals actually being helped through the efforts of this charity during the seven year period listed on the site.

In fact, 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 the Hannity posse of family and friends in high style. And, despite Hannity's statements to the contrary on his nationally syndicated radio show, 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.  Moreover, despite written assurances to donors that all money raised would go directly to scholarships for kids of the fallen heroes and not to expenses, has begun charging expenses of nearly $500,000 to give out just over $800,000 in scholarships. http://mediamatters.org/blog/201003190002

...And on Friday Night, Hannity will be honored with an award for this "Outstanding Community Service by a Radio Talk Show Host" at Talkers Magazine's  convention.

According to its 2006 tax returns, Freedom Alliance reported revenue of $10, 822, 785, but only $397,900-or a beyond-measly 3.68%-of that was given to the children of fallen troops as scholarships or as aid to severely injured soldiers. Those numbers check out (pdf). 

And then, there are the 2008 Freedom Alliance tax forms, which were signed in November 2009 and filed only recently.  That year, Freedom Alliance took in $8,781,431 in revenue and gave $1,060,275.57 total-or just 12%-to seriously wounded soldiers and for scholarships to kids of the fallen.  Remember, this is well below the 75% required to be considered a legitimate charity. 

I checked out the charity's filings with the IRS for fiscal year 2006 and although I do not understand accounting, I did discover that:

Key employees were paid half a million dollars.

All other employees received over a million dollars in salary.

A quarter of a million dollars were paid out for employee benefits.

Accounting fees were almost a quarter of a million dollars.

Postage and shipping were listed as amounting to over 3 ½  million dollars.

Conferences and meetings cost over a million dollars.

$1.6 million dollars were paid to 'consultants'.

These expenses compare with $9.5 million collected for 2006. 

You can look at the filings yourself at http://www.debbieschlussel.com/wp-content/uploads/2010/03/freedomalliancetaxes2006.pdf

This article caught my eye for more than a few reasons. First, I do not like Sean Hannity.

Second, I read this today in the NYT on what I think is a related subject:

What if the biggest rewards on Wall Street went to those who thwarted dangerous and excessive risk-taking instead of to those who enabled, approved or simply ignored it?

What if every senior Wall Street executive had to worry that he could lose his entire net worth at any moment -- including his mansions in Greenwich, Conn., and Palm Beach to say nothing of his job -- if the revenue he was generating turned out to be unprofitable or excessively risky?

For goodness sake, what other business on the face of the earth, aside from Wall Street, pays out between 50 percent and 60 percent of each dollar of revenue generated to employees in the form of compensation! http://opinionator.blogs.nytimes.com/2010/03/18/lehmans-demise-dissected/?scp=5-b&sq=cohan%2C+wall+street&st=nyt

Thus spake William D. Cohan in the NYT today. He seems to think that things would be better with a few more incentives placed somewhere in 'the system'.

This raping and pillaging of corporate coffers by management would never have occurred if shareholders had been given more rights inside the courtroom. This is another subject and maybe off-thread here but I wonder whether or not we should not be looking at the ultimate purpose of certain legal structures.

This Freedom Alliance charity appears to have been set up for the purpose of employing Hannity's friends and family and providing them with pretty fair wages.

And who the hell are these consultants? I mean a good charity should be able to acquire some pretty good consulting for free. I mean it is a charity.

And if in fact, this charity merely handed out 100 or so scholarships in 2006, what the hell did they need the consultants for, anyway?

And supposedly, the IRS has software that picks up 'abnormalities' in certain charitable filings. Should not some alarms be going off when figures like this show up in tax returns?

The primary purpose of a corporation is to make money for its shareholders. That purpose has been severely curtailed by greedy management.

The purpose of a charity is supposed to be to provide help to the down trodden.

Hannity and his henchmen have used every trick in the book to bring money into this 'charitable corporation'. They play upon patriotism and the fear of terrorism and a love for education. I mean what is going to attract more tax deductible charitable donations than the picture of a dead soldier or the picture of a dead soldier's child?

Can you imagine someone bragging that they helped to provide scholarship funds to 100 children of deceased U.S. soldiers and only paid himself or his company $600,000? I mean why not just pay every kid six grand?

Oh well the lesson here, for those people who have money, is to do some research with regard to the charitable organization that you desire to help.