Freedom Forum Spending Probed: New York State Attorney General Looking into Whether Expenses Are 'Excessive or Imprudent.' (Includes Related Article with Response from Freedom Forum)

Article excerpt

New York State attorney general looking into whether expenses are |excessive or imprudent'

NEW YORK STATE Attorney General Robert Abrams' office is investigating spending at the burgeoning charitable foundation created by the late newspaper publisher Frank Gannett.

Investigators are looking into "whether expenses are excessive or imprudent" at Freedom Forum, formerly Gannett Foundation, and whether they comply with the state's charities laws, said attorney general's office spokeswoman Leslie Gersing. She gave no details.

The attorney general's charities bureau, which regulates the state's tax-exempt charitable organizations, is conducting the investigation, first reported in the Wall Street Journal.

"There have been no excessive or imprudent expenditures at Freedom Forum, and we've followed all tax laws," president and CEO Charles Overby told the Journal.

Overby said state investigators first sought tax returns and records of board expenses and meeting dates 14 months ago and asked for more records this month. He was unsure exactly what investigators were after but said they wanted many records from the foundation's move from Rochester, N.Y., to Arlington, Va., in 1989.

Freedom Forum is among the 20 largest U.S. foundations and is the biggest focusing on journalism. Still registered in New York state, it was founded in 1935 by Frank Gannett to support charities in areas where he owned newspapers.

Flamboyant former Gannett Co. chairman Allen Neuharth has raised the foundation's profile markedly since taking over as chairman in 1986.

In 1990, following the move to glitzy new headquarters in a shiny office tower across the street from Gannett Co. headquarters, the Washington Post reported complaints by former board members about soaring expenses, such as the $15 million headquarters, including a $1 million art collection, and soaring staff and administrative expenses.

In 1991, the foundation took the Freedom Forum name and severed all formal ties with Gannett Co. by selling its entire endowment, a 10% Gannett stake, back to the company for $670 million and investing it elsewhere.

With the new name came a broader mission and a flurry of new appointments and projects, including a $12 million news museum, a First Amendment center at Vanderbilt University, programs in Eastern Europe, and Free Spirit awards of $245,000 to former hostage Terry Anderson and 100,000 each to two Supreme Court justices.

Freedom Forum responds via ad

Freedom Forum, The free speech foundation whose spending is under investigation, refused to answer a reporter's questions about its finances and responded instead by buying a two-page ad. …