Target Ford (Page 5)

Today Romero is contrite about his 2003 advice to Ford. "I made a mistake," he says. "I was too slow to understand the broader context. I didn't connect the dots." And he is blunt about his former employer: "Ford made a big mistake with the grant language," Romero says. "I think it has created a pall over the foundation and its grantees. It has only emboldened its critics. And it has cast a shadow over the work of one of the most important foundations at a very critical time."

Some ACLU board members wish that Romero had used whatever influence he had with Berresford, of whom he is something of a protégé, to forestall the new grant language. "Because he was consulted by Berresford privately, before the new grant restrictions were written in stone, Anthony had a unique opportunity to advise her how to prohibit grantees from engaging in activities related to terrorism without restricting or chilling their speech," says Kaminer. "We can't know if his advice would have been followed, but we do know that he squandered the opportunity to give it." Kaminer adds: "The advocacy rights of all Ford grantees have been chilled. The censorious efforts of private groups angered by Ford's funding policies--and the intimidation of Ford by elected officials enlisted by these groups--have been rewarded."

Nadler denies that he coerced Ford, and says he has no misgivings about the foundation's new grant language. He insists that Ford, as a private-sector institution with no constitutional obligations, can do as it wishes. "It's not a restriction on speech," Nadler says of the new language. "It's an agreement not to engage in terrorism. It hasn't restricted anybody's speech."

But some leading experts on philanthropy are much less sanguine than Nadler. "Nadler is certainly technically correct. The First Amendment is a limitation on government, not private, action," says Princeton's Stanley Katz, president emeritus of the American Council of Learned Societies. "So strictly speaking Ford cannot be criticized for violating a constitutional right. But Ford has set itself up as a liberal philanthropic foundation, and the issue is whether it is violating its own freedom-of-expression principles. I think it has, and I would be surprised if Susan Berresford and others there were not keenly conscious of a tension between what they felt forced to do and what they truly believe in. Ford would not fund a private organization it knew to be systematically violating the freedom of expression, and it ought not to engage in such practices itself."

" 'Violence, terrorism, bigotry or the destruction of any state' is very problematic" grant language, says Professor Michael Olivas of the University of Houston Law Center, who closely monitors the nonprofit sector. Olivas wonders why Ford included vague and open-ended terminology like "bigotry" in its grant letter when it could simply have stated that it will not fund any organization proscribed by the State Department.

Why did Ford agree to alter its grant language? Berresford is reticent on the subject, as is one Ford trustee who met with Nadler. But one reason behind Ford's action may have been its desire to prevent additional government regulation of the foundation sector. In May 2003, five months before the JTA series, the sector--in which Berresford is very much a leader--was jolted by legislation proposed by Roy Blunt and Harold Ford Jr. that was designed to stimulate charitable giving. Federal law now requires foundations to pay out 5 percent of their assets annually, and the legislation would have required that the mandatory minimum payout exclude administrative costs such as rent and salaries--a provision that could have forced foundations to spend more money. The Ford Foundation (and the Council on Foundations, which represents 2,000 grant-makers) strenuously opposed the provision. Indeed, the foundation was involved in the sector's decision to hire Bill Paxon, the former Republican Congressman, currently a lobbyist for Akin, Gump, Strauss, Hauer & Feld, to represent its interests before Congress.

Some foundation experts insist that the foundation overreacted to what it saw as a higher payout requirement. According to Pablo Eisenberg, who advocates higher foundation payout rates, "Susan Berresford, whose Eleventh Commandment is 'Thou Shalt Not Increase the Payout,'" privately argued that "this was an attack by the right wing to do away with liberal foundations like the Ford Foundation, which is total nonsense."

The Congressional effort to exclude administrative costs was eventually beaten back by the foundations, but suspicion toward the sector lingered in the minds of some in Congress. And then Black's series appeared in the JTA. People close to Berresford say that, faced with massive pressure from Nadler, Jewish organizations and newspapers like the New York Sun, she recalled the events of 1969 and the political price the entire sector could, once again, pay if Black's series reignited the campaign for a higher payout or other regulatory measures.

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