THE EBERLE LAWSUIT
Judge imposes settlement of fundraiser Eberle's libel suit
ANIMAL PEOPLE corrects error made by a source and two items never in the newspaper nor on our web site
From Animal People June 2003
FAIRFAX, Virginia--Imposing the "Correction & Statement of Regret" published directly below, Fairfax County Circuit Judge Stanley Paul Klein on May 29, 2003 ended a lawsuit brought against ANIMAL PEOPLE in July 2002 by direct mail fundraiser Bruce Eberle and his firm Fund Raising Strategies.
Obtaining several specific corrections and clarifications that ANIMAL PEOPLE had already made, to the extent that available information allowed, Eberle and FRS received no retractions of main coverage, no damages or costs, no admission of their allegations of libel and tortious interference in business relationships, and--in tacit recognition that Eberle and one of his major clients contributed to whatever errors were made through their own inaccurate remarks--no apology.
By way of future conditions, ANIMAL PEOPLE agreed only to obey the same laws of the state of Virginia that apply at all times to all news media.
None of the corrections involved material
published in exposes focused on
Eberle and Fund Raising Strategies,
the longest of which were "Would
you buy an appeal from fundraiser
Bruce Eberle?" and "Mississippi
sanctuarian tries to quit 'sharecropping'
for fundraiser," published in
September and October 2000, accessible
at this site
Each correction of published material involved an incidental mention in items focused on other topics. The corrections pertain to fewer than 160 words, of more than 17,000 words about Eberle appearing since 2000 in ANIMAL PEOPLE, The Watchdog Report on Animal Protection Charities, and miscellaneous appeals and promotional items.
In statistical terms, no fault was found in 99.2% of the total volume of ANIMAL PEOPLE coverage mentioning Eberle and FRS either directly or implicitly.
Nothing specifically described under points
#1 and #3 in the "Correction &
Statement of Regret" ever appeared
in any regular edition of ANIMAL
PEOPLE, or was ever posted to
"Our statements" cited in enumerated point #2 were statements quoted and paraphrased from Wildlife Waystation founder Martine Colette, to whom they were attributed. Although they were "our statements" in the legal sense that we published them in good faith, fully attributed to Colette, in no way were her remarks ever represented to be the position or perspective of ANIMAL PEOPLE.
Further to point #1, the 2001 and 2002 editions of the ANIMAL PEOPLE Watchdog Report on 101 Animal Protection Charities noted that John Ashcroft, now the U.S. Attorney General, ended a fundraising deal with Eberle in 1999, according to Deirdre Shes-green of the St. Louis Post-Dispatch, "after Associated Press inquired about accusations that Eberle used phony prisoner-of-war sightings to solicit money from veterans for another client. Eberle's solicitations," Shesgreen wrote, "came to light in 1992 during hearings held by the Senate Select Committee on POW-MIA Affairs."
In condensing previously published material about that episode from a variety of sources, ANIMAL PEOPLE erroneously identified the "phony POW sightings" as "involving staged photos taken on the grounds of a notorious wildlife dealer in Thailand."
ANIMAL PEOPLE independently identified this as a possible error and conditionally corrected it, pending receipt of further information, in December 2002.
Eberle stated under oath during deposition in May 2003 that he had nothing to do with these photos. They were used by his client, the late Colonel Jack Bailey, after Eberle no longer represented him.
Though Eberle refused to provide copies of the mailings he produced for Bailey so that we could see for ourselves if the staged photos were used or not, we have accepted Eberle's sworn statement.
"I understand that his entire direct mail program shut down after we terminated our relationship," Eberle told ANIMAL PEOPLE by e-mail on August 7, 2000.
Eberle represented Bailey and his now defunct charity Operation Rescue from 1983 until 1989.
Some of Eberle's 40 mailings over three years on behalf of Bailey were called "clear examples of misleading solicitations" in the 1992 final report of the U.S. Senate Select Committee on POW-MIA Affairs," and were denounced in public statements by Senators John McCain (R-Arizona) and John Kerry (D-Pennsylvania).
Bailey accused Eberle "of milking the charity for profits," Los Angeles Times staff writer Scott Harris reported in August 1991.
Stated the Senate Select Committee on POW-MIA Affairs final report, "Operation Rescue, Inc. reported on federal tax forms that during the period 1985 through 1990 fundraising expenses constituted 88.8 percent of contributions."
As in the libel suit against ANIMAL PEOPLE concerning the cost of fundraising that Eberle does for animal charities, Eberle contended during the Senate Select Committee hearings that his critics took insufficient note of the costs of printing and postage.
Responded Senator John Kerry during the Select Committee hearing of December 2, 1992, "You sit here and say to us, gee, I only got $100,000, but that is really disingenuous, because the total fee produced by this which benefits you or your family or partners is significantly more than that. So you sit here and say you only got this amount of money when in fact the charity, quote, winds up with $200,000 against $1.9 million raised. I find that unconscionable and extraordinary."
Further to point #2, the ANIMAL PEOPLE editions of March and April 2002 quoted and paraphrased Martine Colette as claiming that Eberle and his companies were paid by Wildlife Waysta-tion on a percentage basis. Colette was attempting to explain why the Waystation filings of IRS Form 990 for the 2000 and 2001 fiscal years failed to identify fees paid to professional fundraisers, as Line 30 of IRS Form 990 requires.
ANIMAL PEOPLE made no judgement one way or the other as to the veracity of Colette's claim, but made follow-up inquiries to try to find out whether any part of it stood up.
In April 2002 ANIMAL PEOPLE published a series of self-contradictory denials received from Eberle after the March 2002 edition went to press. His math repeatedly conflicted with his statements. ANIMAL PEOPLE noted that no matter how Eberle was paid, payments of professional fundraising fees are supposed to be acknowledged on Form 990.
Both Colette and Eberle claimed in March 2002 that their contracts were confidential. In early 2003 ANIMAL PEOPLE learned that the contracts are available from the California Office of the Attorney General. The contracts affirm that Eberle and his companies are paid by the Waystation on a flat fee basis.
The lion's share
Point #3 refers with specificity only to the use of the phrase "the lion's share" in an e-mail of January 23, 2002 from ANIMAL PEOPLE editor Merritt Clifton to Dawn L. Simas of Wild About Cats.
"I don't respond to anything," Clifton wrote, referring to reader inquires about an Eberle test mailing for Wild About Cats, "until I can assure people who ask me about an organization that I know exactly where all the money will be going, and that the lion's share of it will be going into programs, not further fundraising."
The e-mail to Simas is the only use of the term "the lion's share" with reference to Bruce Eberle and FRS discovered in repeated electronic searches of the ANIMAL PEOPLE archives and e-mail files previous to the distribution of the June 2003 ANIMAL PEOPLE appeal letter and editorial. These also use the phrase "the lion's share," but in a more explicitly defined context, and were printed and mailed after the settlement agreement was reached.
Point #3 may also refer to:
a) An imprecise reference to high-volume direct mailing firms in a March 2001 promotional wrapper, which did not actually mention either Eberle or any of his companies, and did not go to ANIMAL PEOPLE subscribers; and
b) Two sentences in the May 2002 ANIMAL PEOPLE editorial, which might have been misread in an ambiguous manner if removed from the context supplied by the preceding eight paragraphs. The possible ambiguity, avoided in all other coverage, has been corrected in the ANIMAL PEOPLE electronic archives.
Eberle objected that the e-mail to Simas and the March 2001 and May 2002 references might have caused readers to believe that his profit margin consists of "the lion's share" of direct mail returns, rather than that his modus operandi often results in charities spending far more money on direct mailing than on their stated charitable purposes.
In that regard, the percentage of funds raised that are retained as profit by professional fundraisers has never been an issue of primary concern to ANIMAL PEOPLE, and indeed has been mentioned only once in any article. That reference was in a direct quote from Eberle about himself.
The issue of concern to ANIMAL PEOPLE, as explained each year in the preface to our annual "Who gets the money?" feature and Watchdog Report on Animal Protection Charities, is the balance of program spending against "overhead" expenditure, defined as fund-raising plus administrative expense.
The Wise Giving Alliance standard, used by ANIMAL PEOPLE, is that overhead should not exceed 35%. The average overhead amount among animal charities whose IRS Form 990 filings ANIMAL PEOPLE has evaluated during the past four years was 28%.
Recent IRS Form 990 filings are not available for several ani mal charities represented by Eberle, and the filings from several others are incomplete. Wildlife Waystation and possibly some others also had fundraising operations other than those of Eberle.
Among nine recent IRS Form 990 filings by three animal charities whose filings are reasonably complete, however, whose only known professional fundraiser was Eberle, the average overhead expenditure came to 70%, and fundraising alone came to 64%, as detailed in Table #1, on page 16.
What this means, in effect, is that if you sent money to those groups in those years, you got less than half as much benefit for the animals and more than twice as many fundraising appeals per penny spent on animals as when you supported the overwhelming majority of other animal charities.
The first sentence of the "Correction & Statement of Regret" may be the most important: "Via e-mails, telephone calls, articles and our web site the impression may have been created that Bruce Eberle and his company, Fund Raising Strategies (FRS) operate with less than integrity."
"Integrity" and "less than integrity" are terms which, like beauty, exist in the eyes of the beholder, and are accordingly subject to interpretation.
Eberle and Fund Raising Strategies claim to adhere to various principles and standards.
Yet Eberle flunks most of the ethical standards considered reasonable and necessary by ANIMAL PEOPLE, outlined in many articles and editorials since October 1992, pulled together and enumerated in the May 2003 editorial "What is an ethical charity?"
After outlining ten standards for the ethical management of animal charities, ANIMAL PEOPLE explained that an ethical fundraiser for an animal protection charity is one who endeavors to help the client charity to meet all ten, and outlined another ten standards specifically applicable to hired fundraisers.
The majority of animal charities represented by Eberle whose IRS Form 990 filings are available flunk standard #1, that they should commit the overwhelming volume of resources raised to animal protection work other than fundraising, administration, and the maintenance of reserve funds.
Many flunk standard #2, calling for filling out IRS Form 990 fully and accurately, and filing it in a timely manner.
Most appear to flunk standard #5a, since high-volume, low-yield direct mailing tends to increase the fundraising costs as opposed to program expenditures of the animal protection sector as a whole; flunk standard #8, that animal charities should strive to promptly rectify any failures to meet the standards; and flunk standard #10, that an ethical animal-related charity, if it employs an outside fundraiser, should hire only fundraisers with no conflicts of interest, such as simultaneously representing organizations or political candidates with goals opposed to those of the charity.
Eberle raised funds for former U.S. Senator Jesse Helms in at least three election campaigns --whose 2002 amendment to the Animal Welfare Act excluded from protection more than 90% of the animals used in U.S. labs. The Bruce W. Eberle & Associates web page includes an endorsement from the Mountain States Legal Foundation, noted for opposition to the Endangered Species Act. Helms and the Mountain States Legal Foundation appear to represent perspectives typical of political candidates and organizations whom Eberle promotes.
Several animal charities represented by Eberle have flunked various of the other enumerated standards, including standard #3, that animal care charities should not only meet but go beyond meeting the minimal animal care standards enforced by government agencies, and should endeavor to meet or exceed the "best practice" recommendations of the major supervisory and/or accreditation organizations.
ANIMAL PEOPLE believes it is inherently unethical for a fundraiser to undertake telemarketing, direct mailing, or any other kind of activity at a level or in a manner which results in combined fundraising and administrative cost exceeding 35% of the total expenditures of the charity during the fiscal or calendar year. Of all the animal charities represented by Eberle for which adequate data is available to ascertain, only Wildlife Waystation appears to meet this standard.
ANIMAL PEOPLE believes it is inherently unethical for a fundraiser to make claims which are not factually substantiated, and that ignorance of misrepresentations by a client charity are no excuse. For example, according to information ANIMAL PEOPLE obtained in discovery, Eberle prepared an appeal for Great Cats In Crisis on purported behalf of Marjan, the deceased Kabul Zoo lion, which was mailed 10 days after Marjan died, and a week after his death was extensively reported by news media.
Great Cats In Crisis was not a part of the official Kabul Zoo relief effort coordinated by North Carolina Zoo director Davy Jones, with the cooperation of the Ameri-can Zoo Association, European Zoo Association, the World Society for the Protection of Animals, the Brooke Fund for Animals, and the Mayhew Animal Home.
ANIMAL PEOPLE believes it is inherently unethical for a fundraiser to use lawsuits, or the threat of lawsuits, to try to silence criticism or to try to compel a charity to adhere to a fundraising contract which the charity has determined is disadvantageous. ANIMAL PEOPLE first encountered this issue in reference to Eberle two years before he sued us, when in August 2000 Cedarhill Animal Sanctuary founder Kay McElroy tried to end her contract with Fund Raising Strategies and was threatened, she said, with legal action.
ANIMAL PEOPLE believes that if a charity finds that it erred in signing a contract which is so disadvantageous that the activities undertaken in the name of the charity are not chiefly benefiting the charitable work, the charity should be allowed to break or amend that contract without further allocation or diversion of resources away from the charitable work that it was incorporated to do. An ethical fundraiser should accordingly discourage client charities from incurring debts to the fundraiser so large as to require additional fundraising activity after the initial contracted activity.
ANIMAL PEOPLE believes that fundraisers for charities should view themselves as operating as ex-officio officers of their client charities, under mandate to represent the best interests of the client charities, and under public scrutiny, for the public benefit, which makes them therefore public figures subject to the same kinds of observation, criticism, commentary, and satire as elected officials, candidates for public office, and celebrities.
Of note in the Settlement Agreement, which ANIMAL PEOPLE insisted be not confidential and which ANIMAL PEOPLE will distribute to interested persons on request, is that the terms to which ANIMAL PEOPLE has agreed are for settlement purposes only.
ANIMAL PEOPLE has agreed to to "cease and desist" from "tortuous interference with the existing and/or prospective business relationships with existing, future, and/or prospective clients of Bruce W. Eberle, Fund Raising Strategies, Inc., and Omega List Company," and/or "other persons and/or organizations that may provide services, including list rentals, to prospective, future and/or existing clients."
ANIMAL PEOPLE has also agreed to not "defame or cause others to defame" Eberle and his companies.
The agreement, however, does not constitute an admission that ANIMAL PEOPLE ever committed "tortuous interference" or "defamation" against Eberle and his companies. It merely affirms that ANIMAL PEOPLE will continue to observe the same laws governing the conduct of news media that we have observed throughout our coverage of the activities and background of Eberle, his companies, and his clients, asking relevant questions of sources, and answering questions for readers and other animal charity donors who contact ANIMAL PEOPLE for information.
All of the ANIMAL PEOPLE articles pertaining
to Eberle that were ever at
Exercising the financial advantage coming from distributing more than 40 million direct mail pieces per year, Eberle may have spent between a quarter and a half a million dollars to obtain publication of corrections and clarifications that could have been published just for the asking, if the points at issue had ever been clearly identified in routine correspondence.
Indeed, the errors concerning the basis of the Eberle contract with Wildlife Waystation and the bogus MIA/POW photograph would never have been made if Eberle and Colette had given clear and accurate explanations.
On July 24, 2000, for example, Eberle e-mailed to ANIMAL PEOPLE, "A few years back we raised funds for a POW group. However, after a number of years we began to doubt their ability to fulfill on their commitment to their donors. What did we do? We terminated our relationship, and that was several years before this same client engaged in activities that eventually came before a special committee of Congress."
In deposing ANIMAL PEOPLE editor Merritt Clifton, the counsel for Eberle argued that this statement separated Eberle from the use of the bogus photo by his former client Jack Bailey.
On December 2, 1992, however, Senator John Kerry made plain directly to Eberle during the Select Committee on POW-MIA Affairs hearings that the activities under investigation included "a letter that goes out for six years saying, P.S., some of our captive Americans are in failing health. Now I guess they knew that in 1986, 1987, 1988, 1989, 1990, 1991, 1992, same letter. P.S., they are in failing health."
Eberle represented Bailey and Operation Rescue from 1983 to 1989. The Senate Select Committee on POW-MIA Affairs was concerned about the whole history of the organization--and that was not the first time a Congressional committee looked into it, summarized Scott Harris of the Los Angeles Times in August 1991.
"Bailey was cited frequently in a November 1987 report by Army General James W. Shufelt, then head of the Defense Intelli-gence Agency, on dubious fundraising by activists involved in the POW-MIA issue," Harris explained.
"The report was submitted to U.S. Rep. Stephen Solarz (D-N.Y.), chairman of the House Subcommittee on Asian and Pacific Affairs, during hearings on the POW-MIA issue. A recurring theme, Shufelt said in the report, was emotion-laden, unsubstantiated claims that searchers were 'on the verge of rescuing (a POW) and if the recipient does not send money promptly, American servicemen will die.' Provably false claims were rare. But one 1987 appeal from Bailey was an exception. In it, the charity claimed credit for recovering the remains of two American helicopter crewmen. 'Now, at least, they've returned to their families,' the letter claimed.
"It wasn't true. Pentagon records show that a later forensic analysis of bones Bailey claimed to be the remains of two American helicopter crewmen were in fact the partial skeleton of one person, an Asian. There were no Asian-Americans aboard the helicopter in question and, as one authority put it, 'no way' the remains were those of a missing American."
"Bailey alienated fellow activists in other ways as well," Harris continued. "One example was his 1988 encounter with Dieter Dengler, the only American POW to escape from Laos. Dengler met Bailey in summer 1988, after the POW hunter claimed that Dengler's old cellmate, Eugene DeBruin, was alive. Dengler traveled to Thailand to join Bailey in a hunt for more clues. Before departing, Dengler agreed to write a fund-raising letter.
"But after a few days in Thailand and some harsh words with Bailey, Dengler headed home. He sent Bailey a letter by certified mail asking that the fund-raising appeal be scrappedA few months later, the fund-raising letter went out anyway. It featured Dengler's first-person narrative as well as a picture of him at his rescue-bearded, bony, weighing less than 90 pounds. 'Yes, there have been and will be disappointments caused by dishonest people,' the letter concluded, 'but it is vital that we continue NOW.'
"There was one editing change," Harris noted. "Instead of using Dengler's name, the letter was signed 'an ex-POW.'" The bogus photos showing an alleged POW on the premises of the wildlife dealer in Thailand were taken in 1989, according to the Senate Select Committee Final Report. They were just one small part of Bailey's "activities that eventually came before a special committee of Congress," as Eberle put it, --and most of the rest came while Eberle was fundraising for Bailey.