Posted: Thursday, May 18, 2000 - 12 PM
White House Urges Solution on T&G Fund
Discuss It Now: The Worcester Fund
SHAUN SUTNER
Reprinted with Permission, The Telegram & Gazette
WORCESTER -- The city's congressional delegation, the White House and the Telegram & Gazette were all involved yesterday in efforts to resolve problems surrounding the distribution of $6.4 million collected by a Telegram & Gazette foundation after the Dec. 3 blaze that killed six city firefighters.
The discussions centered on finding a solution that would satisfy both the Internal Revenue Service, which has regulations concerning tax deductions that must be met, and the families of the deceased firefighters.
Although no solution was settled on, spokesmen for U.S. Rep. James P. McGovern, U.S. Sen. John F. Kerry and the newspaper all voiced optimism.
“We received assurances yesterday that the IRS would be as flexible as possible within the law,” said Michael Mershon, a spokesman for Mr. McGovern, D-Worcester. “But right now there needs to be a proposal put forward that the IRS can review.
“Mr. McGovern hopes this will be resolved earlier rather than later,” he added. “Obviously these families have been through enough -- too much -- and they don't need to go through this.”
Thomas F.X. Cole, director of marketing and new media for the T&G, said that the newspaper is continuing to seek legal advice and input from civic leaders.
“We're trying to come up with a solution that provides for the families' needs, honors the donors' intentions and complies with the law, and that's a complicated equation,” Mr. Cole said.
Asked how much of the money the newspaper would like to see go to the families, Mr. Cole replied: “As much as possible -- as much as the law will allow.”
However, the efforts to resolve the situation suffered an apparent setback when the board of the United Way of Central Massachusetts, with about 25 of its 31 members present, voted unanimously to play no role in the fund, at least for now.
In explaining the board's decision, Chairman Richard B. Collins alluded to the controversy that has emerged since T&G Publisher Bruce S. Bennett stated last week that efforts to disburse the fund had been complicated by the way it was set up and by the tax laws.
“At this stage in the discussion, until there is a resolution among the interested parties, it really isn't appropriate for us to participate in the administrative capacity we had perhaps envisioned,” Mr. Collins said. “It appears to us that until very basic decisions are made about how this fund is going to operate, we don't really see a role for ourselves.”
Mr. Bennett was away on vacation and could not be reached for comment, but Mr. Cole said the vote would not stand in the way of progress toward a resolution.
“We would have welcomed the administrative support that the United Way had initially offered to us,” Mr. Cole said. “The vote will in no way further delay us in distributing the money.”
Both Mr. McGovern and Mr. Kerry, D-Mass., have urged IRS Director Charles Rossotti to relax the tax rules to allow as much money as possible to go to the firefighters' families.
A prompt distribution has been sought by lawyers for the surviving relatives of the six deceased firefighters -- Lts. Thomas E. Spencer and James F. Lyons, and Firefighters Timothy P. Jackson, Joseph T. McGuirk, Paul A. Brotherton and Jeremiah M. Lucey.
However, newspaper officials and lawyers say that tax laws do not permit all of the money to be disbursed directly to the relatives because of the way the fund was set up.
Newspaper officials say that because the donations are tax-deductible, the fund's distribution is governed by specific IRS rules. Among other things, the rules require the formation of a community committee and that the needs of recipients be evaluated, they say.
Instead of a direct distribution, the newspaper had proposed the creation of a community board that would hand out the proceeds of the more than 43,000 individual and corporate donations. Officials had raised the prospect of using some of the money for a memorial, for fire department equipment, and for other purposes.
That idea met with criticism from the families' lawyers, who said the money was raised on their behalf and should go to them.
It also has drawn criticism from the newspaper's readers, some of whom weighed in yesterday by telephone and electronic mail; the debate has spilled over into local and national radio talk shows, with callers demanding that the money be given entirely to the families.
A common theme of criticism of the handling of the fund is that donors were misled into thinking all the money was to be given to the families.
Mr. Cole, however, defended the newspaper's intentions and its conduct.
“We don't believe we misrepresented ourselves,” Mr. Cole said.
A typical notice in the newspaper, such as that published on Dec. 9, said that contributions were sought to “benefit the families and honor the memories of our brave firefighters.”
While efforts continued in Central Massachusetts, deliberations were under way in the nation's capital on how to move the distribution forward.
White House officials released a statement urging a reconciliation of differences and “honoring the courageous service and sacrifice of the six firefighters who laid down their lives to save others and protect their community.”
“Acknowledging the personal tragedy for their families, we hope all the local parties involved in this case come together and work out a proposal that best serves the families and the community of Worcester,” said Steven Boyd, a White House spokesman. “We commend the efforts of all the local leaders working to bring about a resolution.”
Mr. Kerry came away hopeful from a conversation with IRS Director Rossotti that “without changing the existing law, we ought to be able to find enough common sense to work things out for the families for whom the fund was intended,” said David E. Wade, the senator's spokesman.
Mr. Cole said the newspaper is working to prepare a proposal for the IRS.
“That's been the process that's been ongoing with the discussion with the families, their advisers and the IRS,” he said. “That's been the charge of the committee that we're assembling.”
The first meeting of the committee is scheduled for early next month, when Mr. Bennett returns, Mr. Cole said.
Some of the families' supporters have highlighted the contrast between the T&G fund and the Fallen Firefighter Fund established at the Worcester Fire Department Credit Union. Donations to the credit union fund were not tax-deductible, which allowed the money to go straight to the families.
The Fire Department's fund, which contained as much as several million dollars, has already been distributed to the families in six equal portions, according to Deputy Fire Chief Gerard Dio, one of three guardians who oversaw the money. He declined to state how much was given out, but said no administrative costs were deducted.
Deputy Chief Dio said he contacted the IRS after the fire and was told he could set up either a tax-deductible fund or a non-tax-deductible one. He chose the latter method so the money could go straight to the families, he said.
“If you gave $1,000, I can guarantee you that it was split up exactly six ways and given to the families,” he said. “All we did was act as a conduit.”
Despite his differing approach from that of the newspaper, the deputy chief refrained from joining in the criticism of the T&G.
Mr. Bennett “runs that account the way he wants to, and I ran mine the way I wanted to,” he said. “He's doing what he thinks is right and I'm not going to badmouth him.”
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