Big donor to Ricks charity was seeking federal aid

Author: WILL BUNCH bunchw

@phillynews.com 215-854-2957

Article Text:

The largest known giver to a controversial charity founded by U.S. Sen. Rick Santorum made its $25,000 donation
as the senator was working to win as much as $8.5 million in federal aid for the donor's project in Delaware County.

Federal tax records show that Preferred Real Estate Inc., the developer of the Wharf at Rivertown project in Chester,
wrote the check to Santorum's Operation Good Neighbor Foundation in 2002.

On his campaign Web site, Santorum boasts of winning $8.5 million in federal aid for the riverfront redevelopment of
an abandoned Peco Energy plant - an effort that culminated in the earmarking of $6 million in highway money last
year.

But good-government experts were troubled by the appearance of a developer giving money to the senator's charity
at the same time it was lobbying for federal dollars. Unlike a campaign contribution, checks to a charity can be written
by a corporation and are not subject to any limit.

"It's a neat window into how Washington works," said Gary Ruskin of the Congressional Accountability Project, one of
several watchdogs troubled by the potential conflicts when a member of Congress also solicits funds for a charity he
runs. "It shows that, more and more, Washington is for sale."

The Operation Good Neighbor Foundation - a charity that Santorum established in 2001 with the aim of helping
faith-based groups and others battling poverty and social ills - already is under fire for spending considerably less on
aid and more on expenses than the Better Business Bureau and other charitable watchdogs recommend.

Also, several campaign aides are on the payroll or connected with the charity, including Santorum's campaign
finance chief, lobbyist Rob Bickhart, who's been paid $75,000 by Operation Good Neighbor in salary and whose
company also receives rent from the charity.

Santorum campaign aides were contacted for this article but declined to comment. In an article last month in the
liberal American Prospect magazine, and highlighted in the Daily News, a spokeswoman denied that Santorum had
given special treatment to any donor.

Besides the charitable gift - listed on a page inadvertently included in a 2002 tax filing - officials from Preferred Real
Estate and their spouses have donated $22,350 to Santorum's re-election campaign and $6,000 to his political-
action committee, America's Foundation.

Charles Howder, director of acquisitions for Preferred Real Estate, based in Conshohocken, acknowledged that
Santorum was one of a number of government officials helpful in winning aid for the redevelopment of the formerly
abandoned and polluted power plant.

But he said the charitable donation had not been connected in any way to the Chester project and had not been
solicited by the senator, but volunteered by the company's chief executive officer, Michael O'Neill, a philanthropist
who directed more than $1 million in donations that year. "The Operation Good Neighbor Foundation, from
everything we know, is a great charity," Howder said.

Preferred bought the Chester site in 1999 for $1, although company officials said they had spent at least $50 million
fixing it up. In May 2001, Santorum announced during a news conference at the site that Preferred had landed its
first tenant, the software company Synygy Inc. The next month, Santorum wrote a letter to then- Housing and Urban
Development Secretary Mel Martinez - now a U.S. senator from Florida - in a successful push for a $1.4 million HUD
grant.

In 2002, Preferred was listed as one of three entities that gave $25,000 to Santorum's charity. The next year, the
company hired a D.C.-area lobbying firm - Mehl, Griffin & Bartek, Ltd. - and paid it more than $60,000 to lobby
Congress and federal agencies for highway and HUD dollars.

Last July, Santorum joined with Pennsylvania's other senator, Arlen Specter, in announcing that $6 million had been
earmarked in the 2005 federal highway bill for ramps providing access to the project from Interstate 95 and U.S. 322 -
the largest such earmark in Southeastern Pennsylvania.
Earlier last year, Preferred sold some of its portfolio, including a stake in the Wharf at Rivertown, to a New York
developer, but it retains a part-ownership in the project.

Good-government experts found the overlap between the lobbying and the charitable giving worrisome.

Melanie Sloan, of Citizens for Responsibility and Ethics in Washington, said Santorum is similar to embattled former
House Majority Leader Tom DeLay in that "both have traded legislative assistance for charitable donations.

"This suggests the names of those who donate to lawmakers' charities should be a matter of public record just as are
the names of those who donate to lawmakers' campaign funds," she said. *