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December 23, 2019

Where Does Donations to the Center for Consumer Freedom Go?

by Anne Paddock

The Center for Consumer Freedom (CCF) was established in 2002 but changed its name to the Center for Organizational Research and Education (CORE) in 2014, but still uses both names.

Founded by Richard Berman, founder, principal and president of Berman and Company, a Washington, DC-based firm “specializing in research, communications, and creative advertising” reportedly for the fast food, soft drink, alcohol, restaurant and meat industries, CCF/CORE is a non-profit 501 (c) (3) who runs media campaigns against organizations whose doctors, scientists, environmentalists, health activists, animal activists, and employees who report and advocate information to the consumer. Although CCF/CORE reports the organization is leading the charge to protect personal freedoms, a closer look at the finances of CCF/CORE reveals that the primary person that benefits from donations to this organization is, in fact, Richard Berman.

The IRS Form 990 (2017) submitted to the IRS by CORE reports the following information:

CORE reported total revenue of $2.8 million (compared to $4.5 million the prior year), almost all of which came from contributions (note: specific contributors are not listed as the organization keeps the donor list anonymous).

CORE reported two primary expenses: compensation:  $1.4 million of the $2.8 million (or 50% of revenue) was paid to Richard Berman and Company, Inc. as compensation for being the “management company for CORE;” and advertising and promotion: $1.4 million (or 50% of revenue) paid to a variety of media outlets. So, if you donated $100 to this tax-exempt organization, the $100 was spent as follows:

 $100:  Revenue

-$ 50:  Compensation to Richard Berman and Company

 $ 50:  Revenue Remaining

-$ 50:  Advertising and Promotion

 $   0

Richard Berman, as President and Executive Director of CORE was compensated as President of Richard Berman and Company (which appears to be the same as Berman and Company).

During 2017 due to the Center’s established accounting and financial internal control processes, which have been approved by an independent CPA firm, the confidential compensation information is unavailable to the preparer and signing officer.

So, Richard Berman expects the public to believe that his compensation information is unavailable to the preparer and the signor of the tax return, F Lane Cardwell, Secretary, Treasurer, and Director of CORE (and former CEO of Boston Market and PF Changs and currently the Chairman of the Board of ALFA Restaurant Group)? Really? Sounds like Mr. Berman is hiding behind “accounting and financial internal control processes” to avoid disclosing how much of the $1.4 million paid to Richard Berman and Company was paid to him personally. In short, Berman, the executive director of a non-profit is paying Berman, the public relations guy.

Mr. Berman works 15.5 hours a week for CORE. $1.4 million divided by 52 weeks equals $27,000 a week. $27,000 divided by 15.5 equals about $1,750 per hour….to manage a very small non-profit.

Mr. Berman owns more than 35% of Richard Berman and Company.

6 “independent” contractors were compensated more than $100,000. The five most highly compensated were:

  • $1,428,785:  Richard Berman and Company, Inc. for management, research, accounting, and advertising fees
  • $  365,170:  Fox News Network for media advertising
  • $  274,421:  Facebook for media advertising
  • $  170,000:  AT&T (Direct TV) for media advertising
  • $  145,000:  Lamar Texas LP for media advertising

CORE has $1.7 million in net assets, most of which is liquid.

There are 7 directors on the Board, all of whom are male include:

  • Richard Berman:  President and CEO, and President of Richard Berman and Company
  • F Lane Cardwell:  former president of Boston Market and PF Changs
  • James Blackstock
  • David Browne:  affiliated with David Browne and Associates
  • Nelson Marchioli:  CEO and President of Denny’s
  • Daniel Mindus: analyst (CORE)
  • David Verrecchia: former VP at Fintech, an organization whose focus is the alcohol industry

To read the IRS Form 990 (2017) of CORE, click here.

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