Wednesday, March 4, 2009
CBS News Reports today that Educap, a multibillion-dollar charity is under investigation by the IRS and Congress for certain alleged abuses. Among the abuses, the Charity is having to defend against allegations that it misused charity funds by to transporting Politicians, family friends and others to faraway and exotic destinations aboard Educap's $31 million luxury jet. It is suggested that the nonprofit could have used those funds to assist students instead. See the excerpt of the story below.
(CBS) Educap is a multibillion-dollar student loan charity run by CEO Catherine Reynolds. As CBS News Investigative Correspondent Sharyl Attkisson reported Monday night, Educap is under investigation by the IRS and Congress for alleged abuse of its tax-exempt status because it charges high interest on charitable student loans, and provides lavish perks with millions in compensation for Reynolds and her husband.
CBS News has obtained exclusive details of what may have been the biggest charity perk: use of Educap's $31 million luxury jet, which costs thousands of dollars an hour to operate.
Investigators say for five years, Reynolds jetted friends, family and luminaries to faraway and exotic destinations that sometimes had little to do with the charity's mission.
CBS News has learned that high-profile names on the Educap flight list include CIA Director Leon Panetta, former Sens. Tom Daschle and Ted Stevens, former FBI Director William Sessions and Chicago Mayor Richard Daley.
. . .
Watchdog Stephen Burd says money spent on the jet comes off the backs of students, who have Educap loans costing up to three times more than government loans.
Attkisson asked Burd if he thought Educap was acting like a for-profit company operating as a charity.
“Exactly,” said Burd, of the New America Foundation. “Educap is the worst case that I’ve seen of a charity - a so-called charity - abusing its tax-exempt status.”
For the full story, please click here.