Jeff Nelson | VegSource Interactive, Inc.
Corporate Whore Caught with His Pants Down
Nelson, President VegSource Interactive, Inc.
Corporate Lobbyist Who Specializes in "Exposing" Non-Profit Activist Funding -- Doesn't Like Focus on Himself
May 20, 2002 -- "Consumer Freedom" founder Richard "Rick" Berman claims he wants to "expose" funding sources of non-profit activist organizations. But his enthusiasm for drawing aside the veil seems to wane when the focus is turned on him.
Berman is a Washington DC tobacco, food and alcohol lobbyist who also runs non-profit organizations with names like "Guest Choice" (started with a $600,000 check from Phillip Morris and recently renamed "The Center for Consumer Freedom"), the "Employment Policies Institute" (EPI -- which fights against raising the minimum wage), and the "American Beverage Institute" (ABI -- which represents booze sellers and rips at organizations like Mothers Against Drunk Driving).
Berman was recently exposed for funneling millions of corporate dollars - donated to non-profit organizations he runs -- right into his own bank accounts. Berman pays himself the cash both directly and personally in the form of salary and benefits for his role as "Executive Director," as well as through payments he makes from the non-profits to his own corporation, Berman & Company, Inc., for "consulting."
According to publicly available tax returns, in 1998 alone Berman paid himself $1.011 million in salary and for "consulting services" out of the approximately $1.272 million total of tax-free donations raised for EPI that year. Another way to look at it: Berman paid to himself about 79% of all the charitable donations raised that year by EPI. And that million-plus bucks was from just one of the non-profits Berman operates.
In a letter recently published on ParentalFreedom.com (a site which parodies the ConsumerFreedom.com website Berman operates), Berman tries to distinguish between using a non-profit to pay himself personally as "salary," versus paying money for "consulting" to his Berman & Company corporation -- a company Berman admits he wholly owns.
In Berman's letter he asserts that he actually paid at least a part of the non-profit money he has steered toward his corporation to other people he chooses to employ, as opposed to putting it in his own personal bank account. Berman threatened a lawsuit for defamation over this distinction.
Berman's tortured defense seems akin to someone reporting Harrison Ford is paid $20 million a picture, and Ford protesting, "No, that money doesn't go to me! The check goes to my CORPORATION, and then I have to pay my script reader, my office rent, my phone bill, my agent, my bookkeeper, my housekeeper, my personal assistant, my cook, my pool cleaner, my helicopter mechanic, my masseuse, my ex-wife and the guy who washes my Rolls! To claim I'm paid $20 million a picture is defamatory - my employees get some of that!"
Non-profit organizations are subject to "visibility" requirements. This is why their tax returns are made publicly available under federal law. Donors and the public have a right to know how tax-free money is being spent. But if you donate to one of Berman's non-profits, only God (and Berman) knows where much of that money goes and what it's really spent on.
Berman Fights for "Consumers"
Berman's website ActivistCash.com claims it "root[s] out the funding sources of the most notorious anti-consumer groups." But this is Orwellian-speak at best as Berman's non-profits seek to quash actual pro-consumer groups, such as the Center for Science in the Public Interest, which educates the public about food safety and nutrition issues. Berman's definition of "pro-consumer" appears to be encouraging people to smoke cigarettes, drink booze, eat lots of junk food - and ignore the health consequences of consumption of these items.
In reality, Berman has used ActivistCash.com to compile a collection of largely already-public non-profit information mixed with insults, distortions -- and outright falsehoods -- perhaps in an effort to spice it up and make his corporate funders believe he's actually engaged in a meaningful enterprise.
Imagine if the Executive Director of the Sierra Club raised in one year a total of $100 million for the respected non-profit organization -- and then paid 79% or $79 million of it to himself directly as salary and to a corporation he wholly owned, as "consulting fees." Berman would probably be first at the door of the Internal Revenue Service trying to get the Sierra Club's non-profit status yanked.
In fact, Berman recently testified before Congress advocating removing non-profit status of certain organizations (which just happen to find fault with some of his funder's products).
Does Berman live in a glass house? Is he running a shell game or self-dealing? Is moving the majority of donations from a non-profit you run to a for-profit you own what the IRS intended for non-profit status? It may all be perfectly legal, but there's an Enron-esque feeling to it -- and Berman is currently acting like he REALLY doesn't want this information out there.
To read more
on the controversy over this public figure, as well as Berman's
threatening letter to VegSource Interactive and our response, go