Charities Exert Political Influence

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The nation's largest charities collectively take in tens of billions of dollars each year. And with that, they accumulate substantial power.

The law is clear on how they can use that power: Tax-exempt charities cannot financially back a particular candidate or bill. But that's not stopping charities from exerting influence anyway.

Unlike the Red Cross, Salvation Army or March of Dimes, many of America's biggest charities are actually trusts more concerned with politics than people.

Sean Treglia is the former program manager for the $4 billion Pew Charitable Trust (search), based in Philadelphia.

Speaking at a symposium, Treglia inadvertently revealed how some of America's most influential foundations bankroll small groups to advance their political agenda secretly, a technique he boasted helped lead to the passage of the McCain-Feingold campaign finance reform (search) bill that banned soft money in politics.

"If the audience was Congress, if Congress thought this was a Pew effort, it'd be worthless. It'd be $20 million thrown down the drain. So, in order, in essence, to convey the impression that this was something that was coming naturally, from outside the Beltway, I felt that it was best that Pew stay in the background," Treglia said.

To disguise their involvement in the debate, Pew and seven other prominent charities, including the Ford, Carnegie and MacArthur foundations, did not lobby the bill themselves, but funneled $123 million to a network of seemingly grassroots organizations.

"By law, the grantees always have to disclose, but I always encouraged the grantees never to mention Pew," Treglia said.

In support of the McCain-Feingold bill, Pew divided up $40 million to think tanks like the American Enterprise, Brookings Institution and Hudson Institute to develop attack ads. Universities like Wisconsin, Brigham Young and Southern California received cash for experts to appear on television to challenge corporate money.

Pew money also went to supposedly nonpartisan groups like the League of Women Voters, Democracy 21 and the Center for Responsive Politics to issue reports and generate friendly media coverage.

"I'm not sure it was illegal. It certainly was unethical," said Terry Scanlon, president of the Capital Research Center (search), which evaluates non-profit organizations and charitable groups.

By using their millions to get others to carry their political water, Pew made lawmakers believe that a broad network of different voices supported reform.

"I think it should anger members of Congress who opposed McCain-Feingold because they got snookered," Scanlon said.

Treglia has since issued an apology to Pew for his two-hour, tell-all session. Pew issued a statement to FOX News saying it did nothing wrong and is proud of the $40 million it spent to get other people's money out of politics.

Click in the box near the top of the story to watch a report by FOX News' William La Jeunesse.