Bush's "faith-bsed initiative:" Just more Republican graft, corruption, and theft of your tax dolla

In theory, it was simple: Congress gave two decommissioned Coast Guard

cutters to a faith-based group in California, directing that the ships

be used only to provide medical services to islands in the South

Pacific.

In reality, the ships never got any closer to the South Pacific

islands than the San Francisco Bay. The mission group quickly sold one

to a maritime equipment company, which sold it for substantially more

to a pig farmer who uses it as a commercial ferry off Nicaragua. The

group sold the other ship to a Bay Area couple who rent it for eco-

tours and marine research.

The gift of the two cutters was one of almost 900 grants Congress has

made to faith-based organizations since 1987 through the use of

provisions, called earmarks, that are tucked into bills to bypass

normal government review and bidding procedures.

Skipping those safeguards can generate more than accusations of

political favoritism. As the case of the Coast Guard cutters shows, it

also can give rise to grants that never achieve their intended

purpose, with the government never even realizing it.

Canvasback Missions, in Benicia, Calif., took ownership of the

cutters, the White Sage and the White Holly, in Baltimore in September

1999. This was the first time such ships had been given away through

an earmark, the Coast Guard said.

Pressed for cash, Canvasback sold the White Sage a few months later

for about $85,000. Two years later, the struggling mission sold the

White Holly to the Bay Area couple for $330,000. The mission did not

inform the Coast Guard property office about the sales.

Typically, decommissioned Coast Guard vessels are sold at auction, are

included in foreign aid packages or are added to the nation's mothball

fleet.

If the two cutters had been sold at auction, the General Services

Administration would have monitored their use for five years. But the

Canvasback earmark required no such monitoring, and Coast Guard

officials said they did not know about the sales until The New York

Times asked about them.

The fate of the White Holly and the White Sage comes as a surprise to

people who supported the Canvasback earmark.

Former Representative Frank D. Riggs, Republican of California, whose

staff drafted the earmark, said it "would raise concerns" if the ships

were "not used as intended."

Senator Olympia J. Snowe, Republican of Maine, was also credited by

Canvasback with working on the earmark. But David Snepp, Ms. Snowe's

spokesman, said she had merely voted for it. Mr. Snepp called

Canvasback's actions troubling and said the senator had asked her

staff to research what is now a gray area: whether selling the two

ships was legal.

"If they were not used in Micronesia, they were definitely not used in

the spirit of the way this was written," Mr. Snepp said. The text of

the earmark gave the government the right to reclaim the ships, he

added. While that was perhaps unlikely, he continued: "They were

supposed to retain the vessels in case the Coast Guard needed them

back. The charity does not have the option to sell."

A harsher assessment came from Steve Ellis, vice president of

Taxpayers for Common Sense, a watchdog group that opposes earmarks,

and a former Coast Guard officer. "They are flipping the property,"

Mr. Ellis said.

Jamie W. Spence, president and founder of Canvasback Missions, said

all the sales proceeds supported the organization's work in the

Marshall Islands, where it has provided eye and dental care and

counseling on diabetes prevention to thousands of people since it was

founded in 1981.

"We did everything in our power to put these ships into service," Mr.

Spence said. But when the group could not raise the money to repair

and maintain the vessels, it sold them instead, using the proceeds to

cope with its financial difficulties, he said.

Mr. Spence said he had consulted with Canvasback's legal advisers and

was confident the sales were ethical and legal.

Coast Guard officials were surprised at the cutters' fate. "The White

Holly and the White Sage are in the South Pacific," Lynn Brown, the

personal property manager in the decommissioning office, said in

March. She affirmed recently that her office had not known that

Canvasback sold the ships.

Mr. Spence acknowledged that he did not give notice to Ms. Brown's

office. But he said he told Coast Guard employees in the Bay Area

about the White Holly sale and mentioned the White Sage sale to the

Coast Guard officer in charge of the Baltimore yard before the deal

and to civilian Coast Guard officials afterward. He did not respond to

requests to identify those people.

While all earmarks are troublesome to critics like Mr. Ellis, who

called the Canvasback gift an "utter indictment of earmarks," those

made for faith-based groups involve special questions about the

constitutional borders between church and state.

The Coast Guard ships were given to Canvasback for a secular purpose,

providing medical services. But Mr. Spence said Canvasback did not

isolate the sales proceeds; instead it mingled them with its general

revenues, which also cover activities that include evangelism. And

under most court decisions, evangelism cannot be paid for with federal

grants.

Mr. Spence said no constitutional violations occurred. "I'm very

certain that the proceeds were used for supporting our medical

program," he said, "and I'm absolutely sure they were not used for

evangelism." He said Canvasback, a nondenominational Christian

mission, raises donations separately for its evangelism activities,

which included donating Bibles translated into local languages and

constructing a chapel.

Mr. Spence and his wife, Jacque, established their medical mission 26

years ago, using a 71-foot catamaran, the Canvasback, to navigate the

shallow coasts of the poorer, more remote islands of Micronesia. As

the ministry grew, it mobilized medical professionals to volunteer for

short stints in the islands and delivered donated medical equipment

and supplies.

When they sought the Congressional earmark, the Spences were hoping

the two cutters would allow them to expand their medical ministry, Mr.

Spence said. But the mission acquired and then sold those vessels, and

a third vessel that was privately donated, because Canvasback

determined that maintaining and operating the ships was too big a

financial burden, he explained. But few of these details can be found

in the annual statements Canvasback files with the Internal Revenue

Service. Two leading nonprofit accounting experts examined the

statements and found them to be incomplete and internally

inconsistent.

"There is no clear audit trail for the boats," said Julie L. Floch of

Eisner L.L.P. in Manhattan, a member of the I.R.S.'s national advisory

panel on nonprofits. Her view was echoed by Jody Blazek of Blazek &

Vetterling L.L.P. in Houston, the author of six books on nonprofit tax

law and accounting.

William J. MacLean, the accountant in Seaside, Ore., who prepared the

filings, declined to comment.

These days, Canvasback has redirected its efforts from ship-based

medical care in the remote islands to land-based clinics on the more

populated islands, Mr. Spence said.

That work has won praise from health officials in the Marshall Islands

- and fresh support from Congress. The tiny mission is now the lead

contractor on a diabetes research program being financed through two

$1 million Defense Department contracts. Those grants were directed to

Canvasback by Congress through a pair of earmarks.

http://www.nytimes.com/2007/06/13/business/13cutter.html?_r=1&oref=slogin&pagewanted=all