WASHINGTON-Thomas Wheeler, until recently the nation’s top mobile-phone lobbyist and now a major fund-raiser for surging Democratic presidential candidate John Kerry, had his $2 million salary padded in 2002 with a $500,000 bonus from the $37 million sale of a for-profit subsidiary of the Cellular Telecommunications & Internet Association.
The half-million-dollar bonus went to Wheeler, currently a consultant to CTIA, at a time when wireless companies were struggling financially. However, CTIA’s revenue increased to $68 million in 2002-a $30 million increase from the previous year.
The revelation of the $500,000 bonus, which CTIA confirmed in connection with the release of its 2002 tax return, comes as corporate and association executives face increase scrutiny over salaries and benefits.
After a series in the Washington Post last year, the Senate Finance Committee began a probe of the Nature Conservancy’s management and certain financial transactions. Nature Conservancy is a nonprofit.
Wheeler’s $500,000 bonus is nowhere to be found in Form 990, the Internal Revenue Service document for organizations exempt from income tax. Rather, the bonus is imbedded in his salary of $2,060,058 for tax-year 2002, which for CTIA began June 1, 2001, and ended May 31, 2003.
Whether the bonus is proper is unclear, because the law governing 501 (C) (6) organizations like CTIA is far less specific than is the statute for 501 (C) (3) tax-exempt groups, like Nature Conservancy.
An IRS spokesman said the agency cannot address specifics of any given case, but agreed to have nonprofit specialists review this story after its publication.
“It is a fairly nebulous issue,” said Hugh Webster, a Washington, D.C., attorney who specializes in nonprofit association law.
Another expert on nonprofit trade groups, who requested anonymity, characterized Wheeler’s $500,000 bonus as a fairly deep legal question.
“I’ve never been in such a situation,” said Thomas Kuhn, president of Edison Electric Institute and chair-elect of the American Society of Association Executives. “I think it [the multimillion sale of a for-profit subsidiary by a nonprofit association] happens pretty infrequently.”
CTIA will not say who conceived of the Wheeler’s Cibernet bonus and whether the payment was approved by CTIA’s board of directors.
For more on this story see the Monday, Feb. 2 edition of RCR Wireless News.
