In 1988 North’s friends established a legal-defense fund that raised 813 million to fight his indictment. Contributions poured in from more than 100,000 people–a mailing list that North would return to over and over. Two years later, for example, he asked those loyalists for more money to help finance his newest project, the Freedom Alliance. It was set up as an “educational foundation.” But North established the group under the part of the tax law–501 (c) (3)–normally re- served for charities such as the Red Cross or the American Cancer Society. As a result, Noah’s organization got roughly a 40 percent discount in postal rates; more important, donations were tax-deductible. The Freedom Alliance raised more than $10.8 million in its first four years, costing the Treasury more than $2 million in lost tax revenue.
North’s aides say the alliance is a legitimate philanthropy. They point out, for example. that it spent $50,000 to provide victims of Hurricane Andrew toothbrushes, deodorant, sunscreen and other donated goods. The group is also giving “personalized memorial cherry wood plaques” to families of service members who died in the Persian Gulf War. But according to the latest tax records obtained by NEWSWEEK, more than 70 percent of the group’s budget for programs in 1992 went to “policy research” and “public information.” This included a monthly newsletter called The Free American, which was dominated by headlines such as NORTH BEGINS NATIONAL RADIO BROADCAST and OLLIE EXONERATED. In 12 pages, the December 1991 newsletter included 31 mentions of North, three photos, one sketch, an interview headlined LIBERAL MEDIA DISTORTS MESSAGE OF OLIVER NORTH’S NEW BOOK and a Freedom Alliance fund-raising appeal from North, noting. “We want to be in a strong position at the start of 1992, a crucial election year.”
Charities are permitted under the tax laws to engage in some political advocacy, but critics say the Freedom Alliance may have crossed the line. “The promotion and personal puffery of Ollie North does not appear to be a bona fide tax-exempt activity.” says James Bausch of the National Charities Information Bureau. Retired Marine Lt. Gen. E. J. Bronars, the Freedom Alliance’s chairman, responds that “every organization has celebrities they use to attract public support.” He adds: “To the best of our ability, we have followed the regulations for these kind of organizations.”
All this helped keep North in the public eye and enabled him to become a wealthy man. Last year he earned $743,292, in part by charging speaking fees of up to $12,000. His net worth exceeds $3 million, including ownership of Guardian Technologies, which sells bulletproof vests to law-enforcement agencies. (The company rents office space from the Freedom Alliance.) Some of North’s vests are sold to the federal government through a minority-owned subcontractor–thereby indirectly benefiting from affirmative action.
North resigned his post as president of the Freedom Alliance in September 1993, when he declared for the Senate. But campaign lawyer Mark Braden says North has kept personal ownership of precious mailing lists used by the alliance and the legal-defense fund. That has allowed him to tap voters like Erma Christensen, a retired piano teacher from Sergeant Bluff, Iowa. She has recently been getting urgent fundraising letters from North warning that the “radical homosexuals” and “elite-biased media, are lining up to destroy him. Christensen needs no, persuading: she started sending money to help him pay his legal bills several years ago. This year, she has written the North-for-Senate campaign 13 checks totaling $330. “I don’t want him to lose by two votes because he didn’t have enough money.” she says. “This man is a hero.”
