It was a business relationship and friendship that, until recently, appeared mutually rewarding. Working side by side, Ralph Reed and Benjamin Hart were two key players behind the Christian Coalition's rise to political prominence. While Reed, the coalition's departing executive director, is credited with expanding the grassroots organization's membership and moderating its image, it is Hart, the coalition's former fundraiser and direct mail vendor, who coordinated the aggressive behind-the-scenes mail campaigns that helped bring in millions in annual donations.
But today, Reed and Hart's partnership appears to have come to an end. In April, Reed announced he would leave the coalition to open a political consulting firm. Hart, meanwhile, faces allegations of unethical billing practices and of marking up the coalition's invoices. As a result, he has been targeted by federal investigators for possible mail fraud.
When Benjamin Hart arrived at the Christian Coalition in 1992, he seemed an ideal fit for the upstart religious group, which was just beginning to flex its political muscle. With an almost perfect conservative background (co-founder of the Dartmouth Review, director of lectures and seminars at the Heritage Foundation, and executive director of Oliver North's Freedom Alliance), Hart became Reed's close confidant in the expansion of the coalition. And donations rose from $5.3 million in 1991 to $21.2 million in 1994.
Although technically an outside contractor, Hart quickly became known as Reed's No. 2 man. "Any conflict that came up with Hart was going to go Hart's way," says one person who worked closely with Reed, "so we had to bend over backwards to make him happy." Not only did Reed defer direct mail decisions to Hart, he also allowed Hart to coordinate the group's telemarketing projects, print its voter guides, and oversee the bidding on its million-piece direct mail packages. "Things were handled loosely from the beginning," says a coalition employee. "[But] Hart was always bringing money in. As long as he was bringing money in, everyone was happy."
Hart was bringing in money personally, too. In 1994, he built an $855,000 mansion in Great Falls, Va. Then there was the shiny green Jaguar. Over time, these luxuries began to arouse suspicion.
Hart's problems at the coalition began in the fall of 1995, when the coalition's marketing director, Donald Black, discovered that Hart's firm, Hart Conover, actually owned two of the vendors it was using to handle the coalition's mailings: Universal Lists (which rented mailing lists to the coalition) and Federal Printing & Mailing (which handled the group's direct mail solicitations). In a memo to coalition CFO Judy Liebert, Black wrote, "This 'closed circle' of business provides Hart Conover with an extraordinary income stream. It doesn't give us the benefit of a competitive bidding environment. Consequently, our 'above the line' cost for direct mail fundraising is astronomical (somewhere in the 50 to 70 percent bracket). Even if this relationship is legally justifiable, it reflects an appearance of impropriety."
According to a memo Liebert wrote to the Christian Coalition board, when she approached Reed with this information in the fall of 1995, he said he knew Hart owned the firms and assured her that Hart had sought out competitive bids. However, when Liebert asked Hart for copies of the bids, he refused to supply them.
After accumulating more evidence -- including an invoice Hart had apparently marked up some $85,000 -- Liebert again approached Reed in early May 1996. But Reed continued to brush off her concerns. "Ralph said we would 'just have to tell Ben to quit doing it,'" reads Liebert's statement. Reed also amended his earlier story. In a May 9 memo obtained by Mother Jones, he now claimed not to have known Hart had been passing invoices through his own printing company. (Both Reed and Hart declined to be interviewed for this article.)
At the time, the coalition was in the midst of an annual internal audit. According to a coalition source, when the auditor contacted Hart, Hart told him that auditing his direct mail operation would not be necessary, because he was going to resign. (He later changed his mind.) Around the time Hart professed to be leaving the coalition, he also tried unsuccessfully to obtain a copy of the group's donor database, valued at more than $900,000. ("In my opinion, there is no legitimate reason for Mr. Hart's organization to need our complete database," wrote Wayne Welpe, head of the coalition's computer systems department, in a May 1996 memo.)
Then in late May, Liebert approached a coalition board member with her concerns about Hart and informed him that she had spoken with a U.S. attorney in order to determine whether the apparent markups might be unethical or even criminal. A special board meeting was called, at which Liebert presented evidence suggesting Hart had been ripping off the coalition. Liebert's case, fleshed out in her memo, was that Federal Printing "appeared to be, for all practical purposes, a 'paper' company that Hart Conover used for contracting out our printing and through which we were billed for printing and mailing services. Federal Printing apparently did no actual printing and was co-located with Hart Conover and Universal Lists in the same small suite of offices." Overall, Liebert estimated, Hart may have bagged the coalition for a total of "a million or more dollars" since 1994.
The coalition's leadership sprang into action -- but not against Hart. On May 30, two days after the board meeting, a coalition security guard showed up at Liebert's house with a sharply worded letter from board member Richard Weinhold. The letter stated that Liebert's documents were "insufficient" to support her claim of improper billing, reprimanded her for contacting outside authorities, and informed her that she was suspended with pay "effective immediately." She was asked to turn over any coalition property -- including "files, documents, and all building keys" -- immediately. After a six-month "vacation," Liebert was officially fired in December.
Hart's fate has been less clear. Following Liebert's accusations, the coalition hired the accounting firm Coopers & Lybrand to undertake a specific audit of Hart's operation -- but both he and the coalition have insisted on keeping its results secret. Hart's lawyer, Steven Chameides, would only say that "the audit found nothing more serious than some keypunch and arithmetic errors in billing." As a result, Hart Conover agreed on a "payment adjustment" with the coalition in December, the specific terms of which Chameides and the coalition have also refused to disclose -- except to describe the payment as "minor."
However, the Office of the U.S. Attorney in Norfolk, Va. -- which last year began reviewing Hart's business records, including a package of invoices -- may not find Hart as blameless. Investigators have told persons close to the case that it might merit a grand jury investigation.
Not surprisingly, Hart no longer handles the Christian Coalition's direct mail, and the group is desperately trying to move on. As far as the coalition is concerned, spokesman Larry Cirignano says, the matter is settled -- and "private."
Sheryl Henderson is a freelance writer and a researcher for the American Spectator.