[Congressional Record Volume 147, Number 130 (Tuesday, October 2, 2001)]
[Senate]
[Pages S10065-S10066]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCONNELL:
  S. 1484. A bill to prevent fraud in the solicitation of charitable 
contributions, and for other purposes; to the Committee on the 
Judiciary.
  Mr. McCONNELL. Mr. President, the Nation's armies of compassion have 
rallied in response to the events of September 11 and thus far have 
contributed more than $676 million to our Nation's charities. But this 
largess have proven an irresistible target to criminals who prey upon 
the generous and good-hearted nature of Americans in this time of 
national emergency. We heard reports of false charities exploiting 
well-intentioned Americans during the Gulf War and after the Oklahoma 
City bombing and we now hear similar reports that the September 11 
attacks have given these unusually heartless criminals new 
opportunities to perpetrate fraud.
  Almost daily we hear of American citizens receiving solicitations 
from phony charities. News reports from more than a dozen States, from 
New York to Florida to California, reveal that Americans are being 
asked to contribute to what turn our to be bogus victim funds, phony 
firefighter funds and questionable charitable organizations. The 
fraudulent solicitation of charitable contributions is a problem all 
across our Nation.
  Well-meaning Americans unwittingly contribute an estimated $1.5 
billion per year in contributions to fraudulent charities. This $1.5 
billion is intended to feed rescue workers, shelter the homeless, and 
care for those who have lost loved ones. Instead, this money is 
siphoned into the pockets of cold-hearted criminals. In the wake of the 
September 11 attacks, the amount of misappropriated contributions will 
surely increase. The Better Business Bureau reports that inquiries from 
consumers about dubious fund-raising practices have increased 
approximately 40 percent since September 11. Unfortunately, these 
criminals frequently prey upon our Nation's seniors, whose fervent 
patriotism and generous hearts can make them easy marks for a grifter's 
scam.
  These crooks often try to confuse their victims by using names that 
sound like reputable charities and relief efforts. For example, some 
scam artists ask for donations to the Red Cross of America or the 
Armenian Red Cross, not the legitimate relief organization known the 
world over as the American Red Cross. Other crooks use the name 
``firefighter fund'' or ``victim's survivors fund'' in their fraudulent 
appeals.
  While an informed donor is the first line of defense against sham 
solicitors, there also are steps Congress should take in addressing 
this problem. Current Federal law targets fraudulent solicitations and 
telemarketing scams related to the sale of products and services and 
sweepstakes and contests, but does not specifically cover the 
fraudulent solicitation of charitable contributions. That is why I rise 
today to offer legislation, the Crimes Against Charitable Americans 
Act, which would authorize law enforcement and regulatory agencies to 
specifically target these fraudulent solicitation.
  My bill, the Crimes Against Charitable Americans Act, strengthens 
Federal law by first, making it a Federal crime to fraudulent solicit 
charitable contributions or donations. This crime would be punishable 
by a fine and imprisonment for 5 years, or both, and those convicted 
would be ordered to provide restitution to their victims. Second, my 
bill increases the penalty from 1 year to 5 years for those convicted 
of impersonating members or agents of the Red Cross in order to solicit 
contributions. Third, my bill directs the Federal Trade Commission, the 
Federal agency with primary enforcement against consumer fraud, to 
include charitable solicitations within its definition of telemarketing 
and to promulgate rules designed to end such fraudulent practices. 
These FTC regulations also give local and state officials the authority 
to persecute violators, which will increase the possibility that scam 
artists will be caught and punished. Finally, this legislation broadens 
the definition of telemarketing in federal law to include charitable 
solicitations and provides for up to a 10-year sentence enhancement for 
anyone who fraudulently solicits charitable contributions in connection 
with the commission of other Federal crimes. This maximum sentence 
enhancement of 10 years is reserved for those criminals who target our 
generous seniors with fraudulent appeals for money.
  There are more than half-a-million federally recognized charities in 
America that raised more than $200 billion in contributions last year. 
Those who seek to profit from tragedy, especially the events of 
September 11, deserve a special degree of society's scorn and a special 
punishment under federal law. Not only do they steal valuable resources 
from the most worthy of recipients, but they erode the trust of the 
American people in legitimate charitable organizations. America is a 
generous and compassionate Nation and we must preserve the integrity of 
our charities and their ability to help others. The Senate can protect 
the noble work of our Nation's charities by passing the Crimes Against 
Charitable Americans Act.
  I ask unanimous consent that the text of the bill, a letter of 
endorsement from the Bluegrass Area Chapter of the American Red Cross, 
and information sheets from the Federal Trade Commission and the AARP 
about fraud and charitable donations be printed in the Record.
  There being no objection, the bill and the additional material were 
ordered to be printed in the Record, as follows:

                                S. 1484

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Crimes Against Charitable 
     Americans Act of 2001''.

     SEC. 2. FRAUD AND FALSE STATEMENTS.

       Chapter 47 of title 18, United States Code, is amended by 
     adding at the end the following:

[[Page S10066]]

     ``Sec. 1037. Fraud and related activity in the solicitation 
       of charitable contributions

       ``(a) Offense.--It shall be unlawful for any person to 
     knowingly and fraudulently solicit, cause to be solicited, or 
     receive contributions, donations, or gifts of money or any 
     other thing of value--
       ``(1) for an alleged charitable or beneficial organization, 
     or an alleged charitable or beneficial purpose; and
       ``(2) in connection with a disaster or emergency which has 
     been officially designated a Federal disaster or Federal 
     emergency by the President or any other appropriate Federal 
     official.
       ``(b) Penalty.--A person who is convicted of an offense 
     under subsection (a)--
       ``(1) shall be fined under this title or imprisoned for not 
     less than 5 years, or both; and
       ``(2) shall be ordered by the court to pay restitution to 
     any victim, and may be ordered to pay restitution to others, 
     who sustained losses as a result of fraudulent activity of 
     the offender under subsection (a).''.

     SEC. 3. TELEMARKETING AND CONSUMER FRAUD ABUSE.

       The Telemarketing and Consumer Fraud and Abuse Prevention 
     Act (15 U.S.C. 6101 et seq.) is amended--
       (1) in section 3(a)(2), by inserting after ``practices'' 
     the second place it appears the following: ``which shall 
     include fraudulent charitable solicitations, and'';
       (2) in section 3(a)(3)--
       (A) in subparagraph (B), by striking ``and'' at the end;
       (B) in subparagraph (C), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(D) a requirement that any person engaged in 
     telemarketing for the solicitation of charitable 
     contributions, donations, or gifts of money or any other 
     thing of value, shall promptly and clearly disclose to the 
     person receiving the call that the purpose of the call is to 
     solicit charitable contributions, donations, or gifts, and 
     make such other disclosures as the Commission considers 
     appropriate, including the name and mailing address of the 
     charitable organization on behalf of which the solicitation 
     is made.''; and
       (3) in section 7(4), by inserting ``, or a charitable 
     contribution, donation, or gift of money or any other thing 
     of value,'' after ``services''.

     SEC. 4. RED CROSS MEMBERS OR AGENTS.

       Section 917 of title 18, United States Code, is amended by 
     striking ``one year'' and inserting ``5 years''.

     SEC. 5. TELEMARKETING FRAUD.

       Section 2325(1) of title 18, United States Code, is 
     amended--
       (1) in subparagraph (A), by striking ``or'' at the end;
       (2) in subparagraph (B), by striking the comma at the end 
     and inserting ``; or'';
       (3) by inserting after subparagraph (B) the following:
       ``(C) a charitable contribution, donation, or gift of money 
     or any other thing of value,''; and
       (4) in the flush language, by inserting ``or charitable 
     contributor, or donor'' after ``participant''.
                                  ____



                                           American Red Cross,

                                   Lexington, KY, October 2, 2001.
     Hon. Mitch McConnell,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator McConnell, I have reviewed your proposed Crime 
     Against Charitable Americans Act of 2001 and on behalf of the 
     Bluegrass Area Chapter of the American Red Cross fully 
     endorse your efforts.
       Whether handling donated funds or fees for products and 
     services, upholding the public's trust is critically 
     important to the Red Cross. The Red Cross is committed to 
     high standards of financial stewardship and those who 
     fraudulently solicit charitable contributions or donations 
     erode the basic foundations of our organization.
       I commend you for stepping forward in this effort to stop 
     those who breed on opportunities of national disaster for 
     personal gain. If I can be of assistance in promoting this 
     act, let me know.
           Sincerely,
                                                      Paul B. Hay,
     Executive Director.
                                  ____


 Helping Victims of the Terrorist Attacks: Your Guide to Giving Wisely

       In the wake of the September 11 terrorist attacks on the 
     World Trade Center and the Pentagon, Americans are opening 
     their hearts and wallets to help the nation recover. If 
     you're thinking about donating to the cause, here are some 
     tips to help you give wisely:
       Donate to recognized charities you have given to before. 
     Watch out for similar sounding names. Some phony charities 
     use names that sound or look for those of respected, 
     legitimate organizations.
       Give directly to the charity, not solicitors for the 
     charity. That's because solicitors take a portion of the 
     proceeds to cover their costs. That leaves less for the 
     victims.
       Do not give out personal or financial information--
     including your Social Security number or credit card and bank 
     accounts numbers--to anyone who solicits a contribution from 
     you. Scam artists use this information to commit fraud 
     against you.
       Check out charities. Contact the Better Business Bureau's 
     Wise Giving Alliance: 4200 Wilson Blvd, Suite 800, Arlington, 
     VA 22203; (703) 276-0100; www.give.org.
 Don't give cash. For security and tax record purposes, pay 
     by check. Write the official name of the charity on your 
     check. Or you can contribute safety online through 
     www.libertyunites.org.
 Ask for identification if you're approached in person. Many 
     states require paid fund-raisers to identify themselves as 
     such and to name the charity for which they're soliciting.
       To report a fraud, contact the Federal Trade Commission 
     toll-free: 1-877-FTC-HELP (1-877-382-4357) or use the 
     complaint form at www.ftc.gov. The FTC works for the consumer 
     to prevent fraudulent, deceptive and unfair business 
     practices in the marketplace and to provide information to 
     help consumers spot, stop and avoid them. The FTC enters 
     Internet, telemarketing, identify theft and other fraud 
     related complaints into Consumer Sentinel, a secure, online 
     database available to hundreds of civil and criminal law 
     enforcement agencies in the U.S. and abroad.
                                  ____


                 [From AARP Bulletin Online, Oct. 2001]

               Tragedy Can be Opportunity for Con Artists

       Be very cautious of anyone soliciting money to help 
     rescuers and victims of the recent tragic events in New York 
     and Washington, D.C. The U.S. Postal Inspection Service, and 
     other law enforcement agencies, are warning people about 
     phone calls, e-mails or any other attempts to obtain 
     donations.
       Shortly after the tragedy, con artists claiming to 
     represent victims, firefighters, law enforcement or charities 
     were asking for money. If you want to donate, contact 
     legitimate charities yourself rather than responding to 
     requests.
       Older consumers report that, on average, they get more than 
     six calls or letters seeking charitable donations every week. 
     That's more than 300 calls or letters every year. More than 
     two-thirds of older consumers are not confident that unknown 
     callers ``really represent the organization they say they 
     do.'' [For more information, visit the AARP website's 
     Telemarketing Fraud section.]


                       tips for charitable giving

       Before you give, get more information:
       Ask the charity's full name, address and telephone number.
       Ask how much of your donation goes to the program that the 
     request describes--and how much goes to administrative costs.
       Call your state Attorney General or Secretary of State's 
     office to see if the charity is registered.
       Depending on your state, charities must file financial and 
     other disclosure statements; get copies, and review them.
       Don't provide your credit-card number or personal 
     information to telephone or e-mail solicitors.


                    be sure you know who is calling

       If a fundraiser calls, call the charity directly to ask if 
     it is really sponsoring a fundraising drive.
       Also beware of phony charity names that sound similar to 
     legitimate organizations. Don't assume that you know a group 
     because the name or symbols seem familiar.


                    protect your charitable dollars

       To ensure that your contributions actually benefit those in 
     need, follow these guidelines:
       Pay with a check or money order made out to the charity--
     not the fundraiser itself.
       Don't give money at the door to a courier or messenger--nor 
     by leaving a check under the doormat. Send your contribution 
     directly to the charity.
       Don't feel pressured to make a donation on the spot. There 
     will be plenty of opportunities to contribute in the future.
       Keep records of your donations and pledges, and check your 
     records if someone says you made a pledge that you don't 
     recall.
       Know the difference between tax deductible and tax exempt. 
     Donations to tax-exempt organizations are not necessarily tax 
     deductible for you. If your donation is tax deductible, get a 
     receipt.


                             online giving

       The AARP Bulletin is providing links to some of the 
     legitimate charities collecting money to help the victims of 
     the September 11 tragedies.
       The following Web sites can provide additional information 
     on charitable giving and charity fraud.
       Federal Trade Commission: If you suspect charity fraud, you 
     can file a report online with the Federal Trade Commission. 
     http://www.ftc.gov/.
       Better Business Bureau: The Better Business Bureau has much 
     advice on charitable giving, including donating used cars and 
     tax deductibility issues. http://www.give.org/tips/index.asp.
       Wise Giving Alliance: Want to check out national charities? 
     This site has reports on hundreds of charities, how much of 
     the money raised goes to administrative or fund raising 
     costs, contact information and charitable missions. http://
www.give.org.

 ____________________