Leavitt defends family's charity

WASHINGTON — Health and Human Services Secretary Mike Leavitt on Friday defended his family's charitable giving as two senators called for tighter regulation of private foundations.

The Washington Post reported Friday that Leavitt and his relatives have claimed more than a million dollars in tax deductions through a charitable foundation that until recently paid out little in actual charity.

Leavitt's spokeswoman, Christina Pearson, said the foundation's activities are "totally legal and proper."

In a statement, Leavitt said, "My family and I are grateful that we have the resources to give back to our community, and the Dixie and Anne Leavitt Foundation has already contributed nearly $1.5 million to charity and will continue to make generous contributions in the years to come."

The Internal Revenue Service has called the tax structure used to create the Leavitt family's foundation, a Type III supporting organization, one of its "Dirty Dozen" tax scams.

Sens. Charles Grassley, R-Iowa, and Max Baucus, D-Mont., have in recent years called for tighter regulation of such organizations. They responded to the report about the Leavitt foundation by renewing that quest.

"There is no question that working families are disturbed by these types of stories that keep appearing in the papers about wealthy people who take a big charitable deduction to get a significant tax break yet retain control of the funds, benefit from that control, and little to nothing actually goes to real charities doing important work," the lawmakers wrote in a letter to President Bush.

They asked that Treasury regulations be rewritten to prevent fraud and abuse. They did not say Leavitt's foundation committed any wrongdoing foundation.

The Post reported that the Leavitt family used nearly $9 million in assets to set up a charitable foundation in 2000. But unlike standard private foundations, it is not required to give away at least 5 percent of assets to charitable causes.

While Mike Leavitt alone has claimed about $1.2 million in tax write-offs since 2000, the foundation gave away only $49,000 in 2002 and $52,000 the next year, the Post reported.

"They're basically sitting on all this money, getting a charitable write-off and doing nothing with it," said Rick Cohen, executive director of the National Committee for Responsive Philanthropy. Cohen reviewed the foundation's records and tax returns at the Post's request.