ANIMAL PEOPLE THE SUBJECT OF A LAWSUIT BY FUNDRAISER BRUCE EBERLE

From ANIMAL PEOPLE, December 2002:

Footnote #28, page 18-19:

28--Lifesavers Wild Horse Rescue spent $178,112 on identifiable program work in fiscal 2001, including $5,367 to buy horses at auction, ostensibly to save them from slaughter, touted in mailings as a central purpose of the group. Selling horses for slaughter is illegal in California, but the law is poorly enforced, and some horses may be bought in other states. $1,023,592 was paid in professional fundraising fees, of which $614,155 was claimed as "program" expense. $177,388 was paid to Fund Raising Strategies Inc. of McLean, Virginia, owned by Bruce Eberle, who also owns or represents various other firms involved in fundraising. Lifesavers has never identified any other fundraising service provider. Eberle over the past several years has represented many of the charities found by ANIMAL PEOPLE to have the highest ratios of fundraising and administrative cost to program service. IRS Form 990 filings show that Tiger Haven, for instance, a longtime Eberle client, spent 79% of total budget on fundraising and overhead in1999, and 69% in 2000. The Tiger Haven filing of IRS Form 990 for 2001 did not arrive by press time.

From the U.S. Senate Select Committee Report on MIA/POW itself--

< http://aiipowmia.com/ssc/ssc38.html >

Fundraising

In stark contrast to the vast majority of volunteer POW/MIA organizations, stand a few private organizations who solicit money from millions of American households. In response, the American public has contributed tens of millions of dollars to the POW/MIA cause since Operation Homecoming. In many instances, however, well over half of the money raised was spent on fundraising. This exorbitant rate, while not illegal, would certainly come as a surprise to those who contribute and is inconsistent with standards set by nationally recognized organizations which monitor the fundraising activities of public charities.

Congress, Government officials, POW/MIA families and members of the public and others have raised questions about the propriety of fundraising activities conducted by the handful of POW/MIA organizations which raise millions of dollars with the help of professional fundraisers who have a financial stake in campaign's success.

The Committee found that professional fundraisers created solicitation materials designed to maximize the emotional impact of the POW/MIA issue by stating that POWs remain alive in Southeast Asia and by stating that for a few dollars more, a private organization can rescue them. In virtually every case, materials relating to the existence, identity and location of POW/MIAs and attempts to rescue them were held out as factual but were based on circumstantial and hearsay evidence far weaker than claimed. Solicitations to millions of potential donors consistently omitted critical facts about the failure to actually locate and/or repatriate any POW after Operation Homecoming such as, in one case, the fact that the boat used in the operation had not left port for three years.

These materials were misleading -- not because they asserted that POWs remain alive in Southeast Asia, but because they failed to disclose critical information including that the reported information was usually second and third-hand rumors.

The Committee's investigation was hampered by the refusal of the most active fundraising organizations to cooperate, in particular when it tried to verify statements made in the fundraising appeals of Account for POW/MIA, Inc. (Skyhook II), Operation Rescue, Inc., American Defense Institute, Inc., Homecoming II, Inc., and Veterans of the Vietnam War, Inc. The Committee did not seek court orders requiring these witnesses' testimony because most fundraising information was available from their professional fundraisers and tax forms that non-profit groups are required to file.

Amounts Raised

Operation Rescue, Inc. reported on federal tax forms that during the period 1985 through 1990 it received $2,283,472 in contributions; spent $2,028,440 on fundraising expenses and $312,125 on program expenses. According to Operation Rescue's own figures, its fundraising expenses constituted 88.8 percent of contributions....

Professional Fundraising Techniques

In their depositions before the Committee staff, professional fundraisers consistently stated that for a fundraising appeal to be successful, it must be based on a current event and it must have a strong emotional appeal.

The POW/MIA issue clearly meets both of these criteria. Indeed, the POW/MIA issue was exploited by fundraisers who, recognizing its income potential, actively sought out, and sometimes even created POW/MIA groups. For these fundraisers, this activity offered an opportunity to expand their client base. The business of raising money typically involves the creation and use of mailing lists (for direct mail campaigns), and phone lists (for telemarketing campaigns) which identify potential donors who statistically can be determined to be susceptible to the particular charitable appeal. For example, in the case of raising funds for POW/MIA organizations, professional fundraisers have determined that females over the age of 50 are the most likely demographic group to donate.

Contracts between professional fundraisers and their clients typically give the fundraiser sole responsibility for designing solicitation materials or scripts; the client's role is to review and approve these materials or scripts.

Solicitation materials used by professional fundraisers on behalf of POW/MIA organizations frequently include petitions which the prospective donor is asked to sign and return; a representation is generally made that the petition will be presented to the Congress, the President or some other government official. These petitions are called "engagement devices" because they seek to actively engage the prospective donor in the cause associated with the solicitation. Frequently, these engagement devices were not delivered as promised but rather were used to expand the client's potential donor list. In at least one case, these engagement devices were routinely discarded or warehoused.

Operation Rescue, Skyhook II and Vietnam Veterans of the War all used such engagement devices, but paid little attention to the petitions, concerning themselves only with the money which often accompanied the petitions.

Once solicitations are prepared and approved by the client, they are routinely mailed to hundreds of thousands of persons, at bulk rates available to charitable organizations. In the case of telemarketing campaigns, thousands of telephone calls are placed. Contributions from as few as 2 percent of those solicited by mail can be deemed successful. For telephone solicitations the figure is somewhat higher.

In some instances, fundraisers and charities will engage in "prospecting" appeals, at a financial loss to the charity (but not to the fundraiser), in order to generate a list of known contributors. Donations are expected to exceed expenses as the known contributors are subjected to repeated, urgent solicitations for money. Because the professional fundraiser's profits are considered expenses of the prospecting appeals, it is possible for the professional fundraiser to earn a profit even when donations from a particular campaign do not exceed expenses....

Operation Rescue, Inc.

Operation Rescue employed Eberle and Associates as its professional fundraisers from 1983 through 1986. Bruce Eberle is the chairman of the board and a majority owner of Eberle & Associates, a Vienna, Virginia-based direct marketing company which provides fundraising services to nonprofit and for profit organizations. Linda Canada, an employee of Eberle & Associates, handled Jack Bailey's Operation Rescue, Inc. account.

In approximately three years Eberle prepared more than 40 solicitations on behalf of Operation Rescue and mailed them to hundreds of thousands of potential donors at bulk rates. They brought in contributions of approximately $2 million.

According to Eberle, the basis for the representations in the solicitation letters came from Jack Bailey. Eberle believed Bailey, although he had no more than Bailey's word that POWs were alive and suffering from malnutrition.

Canada designed most of Operation Rescue's solicitations from 1984 to 1986, sending solicitation letters along standard emotional appeals to Bailey for his approval before disseminating them to the public. She never questioned the reliability of Bailey's statements and told investigators that she could not provide the Committee with any facts to back up her statement in a 1985 solicitation that "men are in terrible shape. Their time is running out."

In a 1986 letter, Operation Rescue told potential donors that unless it received $13,671.77, vital intelligence-gathering missions might have to be stopped. If those missions did not continue, there was no hope for the return of POW/MIA's held captive in Vietnam, the letter stated.

In April, 1985 solicitations stated that Bailey had just returned from an intelligence-gathering mission and confirmed the location of live American POW's. The solicitation stated that the men were in terrible shape and their time was running out. The solicitation was designed as a "Post Gram" stating that Operation Rescue had more evidence of live Americans. This Post Gram and another solicitation purporting to be a copy of a letter written by Bailey while aboard his rescue ship, the Akuna II in the South China Sea, were not what they appeared to be.

These scenarios were concocted by Bailey's fundraisers. A memorandum dated April 2, 1985 from Eberle to Canada laid it out:

"In addition to the two fundraising appeals which I drafted today, I have an idea for three more packages on behalf of Operation Rescue. Here they are:

1. Some sort of an international cablegram sent from Thailand to the donor describing the 'evidence' that Americans are still being held captive and the urgent need for tax-deductible contributions in support of the rescue efforts.

2. A handwritten or hand-printed letter on lined note paper written by firelight during an intelligence gathering mission either inside of Cambodia or Vietnam, or at least on the banks of the river which divides Thailand and Cambodia. Same message.

3. A letter originated in Thailand, either on hotel stationery or on Akuna II stationery stating that the Akuna is in port and can't leave again unless a certain amount of money is received. Letter could even be drafted on the deck of the Akuna. Once again, this letter should either be handwritten, hand printed or typed on a portable typewriter. Same message.

Linda, obviously these are take-offs on your current package. They could be used as "challenger" packages to test against your current control package. They should be tested head to head with the control package and any other challenger packages which you mail."

During the relevant period, the Akuna never left Songkhla Harbor according to a telegram from the Department of State dated September, 1986, which quotes a letter from the Harbor Master:

. . . [the Akuna] has been anchored in Songkhla for roughly two years (actually three), never leaving its mooring . . . The Akuna has not performed any useful service, and that it has not received maintenance for a long time. In this regard, it notes that the skeleton crew of two watching over the ship has absolutely no knowledge of how to maintain it.

The Post Gram and the handwritten letter are clear examples of misleading solicitations.