Center For Military Readiness Criticized For Lax Oversight

Watchdogs Say Conservative Anti-Gay Group Run With Little Oversight

WASHINGTON -- The leading opponent of repealing the Pentagon's "don't ask, don't tell" policy and a decades-long critic of expanded opportunities for military women runs a nonprofit organization that watchdog groups say has filed inaccurate and misleading reports to the IRS, lacks a credibly independent board and is operating uncomfortably close to the line that separates education from lobbying.

The Center for Military Readiness (CMR), the tax-exempt nonprofit founded by Elaine Donnelly nearly 20 years ago, bills itself as "an independent non-partisan public policy organization that specializes in military personnel issues." But the "small think tank" headquartered out of Donnelly's suburban Detroit home and run day-to-day by her husband Terry is the single most influential conservative voice pushing back against social progress in the military.

It is a remarkable and, for some, potentially problematic set up that illustrates how an ideological workhorse who has helped tilt the scales of some of the most important cultural debates of our time could operate in relative obscurity with little or no oversight.

An examination of a decade's worth of CMR's 990 tax forms and interviews with several nonprofit experts reveal a mom-and-pop operation that has repeatedly failed to comply with standard rules required of 501(c)3 groups like CMR.

"It seems very loosey goosey, not best-practice," said Ken Berger, president of Charity Navigator, which rates nonprofits. "They need to tighten up the way they're operating."

Daniel Borochoff, whose American Institute of Philanthropy recently blew the whistle on "Three Cups of Tea" author Greg Mortenson's charity, said CMR lacked many of the hallmarks of a well-run, accountable and transparent organization.

Donnelly brushed off criticisms. "You can plum all the records -- there are no problems," she told The Huffington Post. "Our record speaks for itself."

But a closer look at CMR's tax forms raises questions as well as some doubts about her group's structure.

Governance. CMR does not have a written conflict of interest policy, a whistle blower policy or an independent process to review compensation for the Donnellys and their executive director Tommy Sears, a former defense industry lobbyist based in Washington. The group also did not fill out a tax form required of nonprofit organizations that pay a family member in excess of $10,000. Donnelly's husband Terry earns more than that as CMR's administrator. Borochoff said the documents are routinely found in well-run nonprofits.

Oversight. In most years, CMR lists just three or four board members, including the Donnellys. Commonly agreed upon standards call for a minimum of five board members, the majority of whom are independent, although some experts say even a small nonprofit like CMR should have at least nine. Berger called CMR's governing body "problematic" and could signal it is merely a "rubber stamp board."

Advocacy. While it is impossible to determine how much time or money CMR spends on direct or grassroots lobbying and the group appears to operate within the vague legal limits for 501(c)3s, watchdog experts raised concerns that it still may be exceeding the allowable amount.

"The fact that they indicate [on the 990 forms] that they do no lobbying at all -- when you contrast that to what you see in the public domain -- it raises questions about whether the form is being completed accurately and thoughtfully," Berger said. "From what I see on the website, it appears that there is some lobbying going on here."

CMR has made a number of statements over the years that clearly sought to influence votes in Congress, though that is hardly a rare function of 501(c)3s. The group urged the Senate not to ratify a United Nations bill of rights for women and opposed Elena Kagan's confirmation to the U.S. Supreme Court. In a 2005 message to lawmakers, CMR advised them against signing a "Dear Colleague" letter by Democratic members in favor of allowing women in more combat jobs.

And in a sign of how closely Donnelly's work affects lawmakers on Capitol Hill, Rep. Virginia Foxx (R-Va.) delivered a floor speech that quoted nearly verbatim from CMR talking points posted -- and later removed -- from a right-wing news site that touted a bill to ban the use of Pentagon funds "in contravention" of the federal Defense of Marriage Act (DOMA).

No one is accusing Donnelly of using CMR to get rich. The group has revenues ten times smaller than the $2 million-plus budget of her greatest foe, the Servicemembers Legal Defense Network (SLDN), and headquarters far outside the beltway in Livonia, Mich.

In 2010, Donnelly earned $48,476 as CMR's president, a pay cut from the $55,674 and $54,035 she was paid in 2008 and 2009 respectively. Her husband Terry was paid $11,718 last year, better than 2009 when he made $9,812 but nearly three times less than the $31,248 he was paid in 2008. Last year, the couple claimed more than $28,000 for travel and home office expenses.

"She's not doing this work for compensation. That's a given. She does it because she believes in it for all her heart," said SLDN Executive Director Aubrey Sarvis, whose gay advocacy group is among dozens that have spent millions to repeal DADT.

"She doesn't need a big budget. She maintains her influence because she's got her own niche," said Peter Montgomery of the liberal advocacy group People for the American Way, which supports full equality for gays and lesbians.

"We are a small organization," Donnelly said in an email to The Huffington Post, "but it is fair to say that our influence is disproportionate to our limited resources."

The Anti-Feminist

DADT may be in its final death throes, but the most dogged conservative culture warrior against gays in the military just will not fade away.

Feminists, gay rights activists and liberal pundits dismiss her as a lonely and slightly loony advocate whom time has passed by, but even detractors begrudgingly give Donnelly her due after more than three decades of dueling.

"She has a resilience you have to respect," said Rosemary Mariner, who fought Donnelly over opening combat jobs to women as one of the Navy's first female aviators. "She's tenacious, she's been the face of the opposition for a very long time...but she also has provided an outlet for a lot of people's hates, people's prejudices...and made it more difficult for the armed forces to do their job."

"She probably more than anyone else was a factor in the amendments to delay or derail repeal" of DADT that recently passed in the GOP-controlled House, Sarvis said. "The country has moved on. Clearly, Elaine Donnelly hasn't. Her advocacy has the tenor of a crusade."

Donnelly enlisted in the culture wars in the 1970s as a protege of Phyllis Schlafly. The conservative activist and her Eagle Forum were leading the campaign to kill the Equal Rights Amendment for women at the time. Donnelly said she got involved because she feared her two daughters could be drafted into the military if ERA passed.

In 1984, after working to get Ronald Reagan elected president, Donnelly was appointed to the Pentagon's Defense Advisory Committee on Women in the Services. Later, the first President Bush named her to a commission on women's roles in the military.

Donnelly has never served in the military.

"I have a unique background as a civilian woman," she told HuffPost in another phone interview. "I had access to the military with the advantage of not being in the military culture." That, she said, made it easier to tell generals they were wrong about personnel policy.

In 1993, President Bill Clinton devised the DADT policy as a compromise after conservatives pounced on his initial plan to end a total ban on gay service members. That same year, Donnelly founded CMR.

The Veterans of Foreign Wars and the Association of the U.S. Army donated seed money and retired officers, including two former Marine Corps commandants, joined some active-duty service members in rallying around Donnelly. All were troubled not only by the thought of serving beside gays but alongside women as well.

Donnelly spent most of the decade fighting to keep women out of combat jobs after the Tailhook sexual assault scandal prompted pressure from Capitol Hill to open more military career fields to women. Although she failed to stop all but the Marines Corps from integrating men and women in basic training -- and couldn't keep women off of combat ships and planes -- she racked up her share of victories.

In 1997, Donnelly leaked a tip about a seminar in which Assistant Secretary of the Army Secretary Sara Lister had called Marines "extremists." Lister was forced to resign.

Donnelly also helped derail the career of Lt. Carey Lohrenz, the first female F-14 fighter pilot in the Navy. Convinced that unqualified women were being promoted to fill gender quotas, she leaked confidential training records given to her by a chauvinist male flight instructor. Even though Lohrenz had gotten high marks as a pilot, she was grounded. Later it became clear that she and other women had been undermined and ostracized by the men in their units.

"She tried to destroy me," said Lohrenz, who later was allowed to fly VIPs but eventually chose to leave the Navy.

Lohrenz sued Donnelly for defamation but lost when a federal appeals court ruled she was a public figure. Donnelly called the lawsuit "bogus" and charged that it was aimed at silencing her and bankrupting CMR.

"I don't know how she's still able to have this platform," Lohrenz, now a motivational speaker in Memphis, told HuffPost. "She's not credible and yet she's a go-to media person for a quote."

Conservative support

CMR'S ability to influence far-reaching social debates is all the more remarkable considering the limits of its funding. It annually brings in around $250,000 in revenues from a network of like-minded conservative foundations. Though its website includes a page where supporters can contribute $25 to become a "member," the group has little or no revenue from membership dues in recent years. Terry Donnelly said CMR is "not a membership organization in the truest sense," though he claimed it has "well over 10,000" people on its email list.

In some years the group's budget has dipped below $200,000. In 2000, however, when George W. Bush became president, its coffers swelled north of $350,000. CMR ends many years in the red. In 2010, it had a deficit of $30,000 -- the second year in a row the organization came in five-figures short of a balanced bottom line.

"We just try to put together enough money for Elaine to do her research," said Terry Donnelly. He said neither he nor his wife have any other source of income.

CMR, like similar organizations, is not required to publicly release its list of donors. A partial accounting by the liberal watchdog Media Matters reveals, unsurprisingly, that CMR's patrons include conservative and Christian groups such as Focus on the Family.

Donnelly also brings her message to conservative conclaves such as the Conservative Political Action Committee and last month's Faith and Freedom Coalition gathering hosting presidential hopefuls. The conference director of the latter was Tommy Sears, CMR's executive director.

CMR's largest single donor in recent years has been the conservative Randolph Foundation. It has given $400,000, most of it in a three-year grant beginning in 2006. Randolph's head, Heather Higgins, also chairs the conservative Independent Women's Forum.

Randolph spokeswoman Lisa Warner said the grants were meant "to increase and improve CMR's work product and to expand the exposure of its views in the media." CMR never submitted a specific proposal related to DADT, its main focus in recent years. "Anything having to do with influencing legislation, we would not be permitted to fund," Warner said.

Errors, Intentional or Otherwise

Donnelly said in an email that CMR is "independently audited every year," and that "the IRS audited our records without a problem a few years ago."

IRS audits are not publicly disclosed, but nonprofit experts said the organization's recent tax forms appear to have been filled out carelessly, with little if any review by staff or board members.

On the line that asks if "any officer, director, trustee or key employee" had a family relationship with someone else in the organization, CMR most recently checked the "No" box. When questioned how that was possible considering the years the group has been in existence, Terry Donnelly said, "You'd have to talk to our CPAs. They're the ones who check those boxes."

Elaine Donnelly later emailed, "We just noticed that the CPA mistakenly included him (Terry) as an officer on the 990. The error is being corrected and the form re-filed with the IRS."

She added that her husband "is not an officer or director or either, therefore there is no conflict of interest that would violate rules." CMR does not list its governing board on its website.

Borochoff called Donnelly's explanation "misleading. Just because a family relationship is not required to be reported to the IRS does not mean that it could not involve a conflict of interest."

The mistake suggests CMR has "a weak board that doesn't take seriously its fiduciary role to make certain its reporting to the government is accurate," Berger said.

Both Borochoff and Berger criticized the small size of CMR's board, with or without Terry Donnelly. Besides Elaine, it includes Schlafly and Richard Trefry, a retired three-star Army general who began his military career during World War II.

Asked if Schlafly was involved in decision-making at CMR, Terry Donnelly told HuffPost, "Hardly at all." He added, "Phylis Schlafly has nothing to do with CMR other than [being] on the board of directors."

"That's a very odd statement. The board sets the overall policy for the organization. The board is the boss of the paid staff," Berger said. He added that two independent board members are insufficient to break a tie.

CMR also has a "board of advisers" that features conservative stars like David Horowitz, and National Review Washington editor Kate O'Beirne, as well as William Woodruff, the former Army lawyer who helped draft the DADT policy.

The list also includes several octogenarian and nonagenarian retired officers whose generation has been arguably less tolerant of gays and career women than the generation currently serving in the military.

Frank Gaffney, who heads the conservative Center for Security Policy, is a CMR advisor, though he said no "official responsibilities" come with the title. He calls Donnelly "a remarkably consequential figure in raising awareness" about the potential pitfalls of what conservatives call "social engineering" in the military. Gaffney said, "I'm afraid she's altogether too right and what we're going to find -- maybe not immediately but some years down the road -- is that we have broken the all-volunteer military."

Donnelly is a hard worker. Whether cobbling together dense flow charts on the fallout from the new "LGBT Law" or calculating the ages of senior officers opposed to repealing DADT to rebut gay rights critics to show her supporters are younger than theirs, she is constantly making her case.

Last year, Donnelly formed an informal Military Culture Coalition (MCC) that includes a who's who of conservative and religious groups opposed to DADT repeal.

MCC commissioned a poll that, not surprisingly, found likely voters feel the same way.

HuffPost senior polling editor Mark Blumenthal looked at MCC's methodology and called it an ''advocacy poll'' featuring a series of leading questions that appear designed to produce a desired result. The recent independent media polls conducted by ABC/Washington Post, CNN and Gallup, which found strong support for repeal, "asked simple, balanced questions that produced a more trustworthy result," he said.

With public opinion turning against her, and the Pentagon preparing for a post-DADT era and weighing repeal of a key policy on women in combat, Donnelly admits she may be out of step with the times.

"Yes, civilian culture has changed, not always for the better. But the military really has not. The military culture depends on obedience to orders," she said. Later she emailed, "If we concede that the LGBT Left has 'won' it all, then President Obama will 'own' the LGBT/San Francisco military from that day forward."

She is already focused on "educating" lawmakers like Foxx to assure the Pentagon doesn't sidestep DOMA -- which the president this week vowed to help repeal -- and give married gay troops the same benefits as straight couples.

"Do you really think this is the end of history? History is just beginning," she said. "The need for CMR is even greater. You have to have an institutional memory."

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