April 12, 2004
By Ralph Vartabedian, Los Angeles Times Staff Writer
Pittsburgh, Pennsylvania - If Teresa Heinz Kerry becomes first
lady, she plans to oversee one of the nation's significant nonprofit
empires from the White House -- acting on a diverse agenda that
involves cultural, environmental, economic and educational programs.
Heinz Kerry's plan to continue her philanthropic work if Sen. John
F. Kerry is elected president could be the source of political
headaches, some analysts say.
The 65-year-old heir to the Heinz ketchup fortune oversees three
charitable organizations with combined assets of $1.3 billion
and as many as 10 private trusts that may hold an additional
half a billion dollars, according to a review of Internal
Revenue Service nonprofit returns, Senate financial disclosures and
records at the Securities and Exchange Commission.
The family fortune and philanthropic enterprises have been largely
undiluted for 100 years.
Heinz Kerry inherited control in 1991 after her first husband,
Senator John Heinz (R-Pa.), died in an aircraft accident that took
the lives of seven people.
Since then, philanthropy has become her full-time work. She
supports environmental causes, women's issues, community
development in Pennsylvania, education programs and the arts. The
Heinz name looms large over downtown Pittsburgh, having funded
parks, concert halls and other civic projects.
She hands out awards to scientists, politicians,
environmentalists and others, sometimes giving
large sums of money, as well.
If Heinz Kerry finds herself living in the White House next year and
continues to set the agenda for the foundations, it would set a
precedent not only for the role of a first lady, but potentially in the
public influence exerted by increasingly powerful nonprofit
organizations.
Political observers are dubious that she could actually maintain her
current role in the White House. Her actions could create political
baggage for a Kerry presidency, they say.
Although much of her work is widely admired, a portion
involves controversial public policy.
Heinz charities, for example, have helped environmental
groups file lawsuits against electric utilities and government
agencies.
Heinz Kerry was not available for comment on her philanthropic
activity, a spokeswoman said.
However, Heinz Kerry's circle of foundation experts have argued that
the charitable work is nonpartisan, avoids any fringe causes and is
mainly aimed at finding market-based solutions to social problems.
But political analysts say none of that will matter.
"It is a lot more complicated than saying it is
nonpartisan," said Stephen Hess, a political analyst at the
Brookings Institution. "The work may be nonpartisan in a sense
that it doesn't have a party label, but it has causes that can have
consequences for the president. Assuming she becomes first lady, she
may change her mind."
Stan Brand, a Washington attorney and government ethics expert, said
no formal laws defined or restricted a first lady's role, but that
the job was subject to customs and practices that had a long
history.
"If she were to become a lightning rod, it could be a problem
for the president," Brand said. "Then she would have to
scale back her role.
"Washington has forced people to make harder decisions than
that in the past," he added. "Washington is a brutal place
and people are subject to incredible scrutiny. They don't understand
what it is like at the center of such scrutiny. And once they are in
it, they change. That is the reality of the political system."
Nonetheless, Heinz Kerry is powerful and independent.
Born a Portuguese citizen in the African colony of Mozambique, she
wed John Heinz in 1965, and they raised three sons, all now adults.
Her charitable work reflects a strong dedication to her roots in
Pittsburgh, her membership in the Heinz family and the causes of her
late husband.
Indeed, Heinz Kerry is still a legal resident of Pittsburgh and
changed her party affiliation to Democratic only last year, eight
years after marrying Kerry, a Massachusetts Democrat, according to
Jeff Lewis, chief of staff at the Heinz Family Office in Washington,
D.C., which manages the family's affairs.
Lewis and Maxwell King, president of the Heinz Endowments in
Pittsburgh, defended her plan to continue operating her charitable
work.
"I don't see why a first lady who has a well-articulated body
of work, as Teresa Heinz does, should have to give that body of work
up," said King, former editor of the Philadelphia Inquirer, who
joined the Heinz team five years ago. "I hope she would be able
to continue and still fulfill all of her obligations as first
lady."
Making Changes
Still, Heinz Kerry has recognized that Kerry's presidential
campaign is going to force her to make some changes, and she has
taken a few steps toward separating from certain activities.
She has suspended her membership on the board of
Environmental Defense, a group she has helped fund.
She has also suspended her board membership at the H. John
Heinz III Center for Science, Economics and the Environment, a
Washington, D.C.-based environmental organization she set up
after her late husband's death.
But in many other areas, she is continuing her involvement,
including her board position with the Brookings Institution.
Heinz Kerry's most important work involves the three charitable
organizations bearing the Heinz family name.
If they were combined into a single corporation, they would rank
within the top 30 nonprofit foundations.
She chairs the largest, the Pittsburgh-based Howard Heinz Endowment,
which reported total assets of $789 million in 2002.
She is also a board member of the closely related Vira I. Heinz
Endowment, which reported total assets of $401 million in 2002.
(Howard was Senator Heinz's grandfather; Vira his great aunt.)
Heinz Kerry also chairs the Heinz Family Philanthropies, which is
not a formal organization but a group of activities run out of the
Heinz Family Office.
The group includes the Heinz Family Foundation, a registered
tax-exempt private foundation with total assets of $62 million.
The group also includes two other foundations bearing the Heinz
name, but not registered as tax-exempt corporations.
The foundations are the H. John Heinz III Foundation and the Teresa
and H. John Heinz III Foundation.
Because they are not registered nonprofit corporations,
little is disclosed about their activities or how they are funded.
The Heinz fortune has remained largely intact through four
generations.
Senator Heinz was an only child, and his father had only one sibling
who met an early death. The previous generations had similarly lean
families.
All of the Heinz money appears to have ended up in either the
foundations or with Teresa Heinz Kerry.
When Senator Heinz died, probate records in Pittsburgh -- which
would have disclosed much about the family's money and the strings
attached to it -- were sealed.
The unregistered foundations appear to be funded by the private
trusts set up by the Heinz family.
Heinz spokesmen say the family does not discuss the trusts or their
organization.
Some of the trusts' names and holdings, however, were disclosed in a
1995 filing by the H.J. Heinz Co. when the endowments decided to
sell much of their company stock.
The SEC filing, known as a 13D, showed that Heinz Kerry had
control of 10 family trusts -- separate from the foundations
and endowments -- that held about 9.8 million shares of Heinz
Corp.
The shares were not part of the sale and today are worth an
estimated $462 million, though it is not known if the family still
holds them.
Heinz Kerry has many assets that make it difficult to
estimate her personal wealth.
For example, she owns four homes around the nation and shares
ownership of a Boston mansion with Kerry.
The five homes have a total assessed value of $33 million.
Allegheny County property records show she owns a 90-acre estate in
Pittsburgh, still registered under her and her late husband's name.
Kerry's last Senate disclosure lists dozens of pages of
stock and bond holdings, most of which are
apparently owned solely by his wife.
The disclosure does not separate the ownership.
A Heinz Kerry spokeswoman declined to discuss the financial
arrangements of the marriage, but it was widely assumed that there
was a prenuptial agreement that kept the spouses' money separate.
Since her money is held separately, Heinz Kerry cannot donate more
than $2,000 to Kerry's campaign, the same limit imposed on any other
individual donor.
As a result, Kerry took a $6-million loan on their Boston
house last year to help finance his campaign.
Heinz Kerry is known in Pittsburgh for her loyalty to the causes of
her late husband and her ability to find creative ways to meet
social needs.
Heinz money paid for the city's symphony hall, a design competition
for a convention center, and the cleanup of abandoned steel mills
that long blighted the downtown riverfront, according to the city's
Democratic mayor, Tom Murphy.
"We have miles and miles of riverfront parks paid by
the Heinz endowment," Murphy said in a recent
interview.
"The last 170-acre steel mill site, the LTV coke ovens, was
bought by Heinz."
Murphy said he had met with Heinz Kerry regularly through the last
decade, when she funded $6 million to $7 million of projects
within the city -- not including the funding
to state and national groups that focused on environmental issues in
Pennsylvania.
The funding she provided to environmental organizations has helped
clean up the foul air and dirty water in heavily industrialized
western Pennsylvania, Murphy said.
"The best bass fishing in Pennsylvania is now in downtown
Pittsburgh," Murphy said, referring to the Allegheny,
Monongahela and Ohio rivers. "Thirty years ago, nothing could
live in those rivers."
Among the key environmental groups that Heinz Kerry supports is the
Clean Air Task Force, a low-profile Boston group that gets 10% of
its funding from her.
It has half a dozen scientists on staff capable of "going
toe-to-toe" with utility industry experts in emission disputes,
according to executive director Armond Cohen.
The task force targets Midwestern utility emissions, some of which
eventually blow over Pittsburgh and contribute to dirty air and acid
rain.
Among its many activities, the group recently sued the federal
Environmental Protection Agency for its failure to identify counties
that are not meeting federal smog standards.
Cohen said that Heinz Kerry's support was "nonpartisan."
Already a Target
Still, bankrolling lawsuits against the federal
government would be an unusual role for a first lady.
Such activity by Heinz Kerry has already become a target for
conservative groups such as Capital Research Center, a
Washington-based organization that examines the spending of
nonprofit foundations.
The group has tried to link Heinz Kerry to fringe environmental
causes.
It points to her contributions to the Tides Center, a San Francisco
nonprofit organization that has provided bookkeeping and other
back-office support for smaller groups that she supports.
Separately, Tides also runs its own foundation that supports
anti-globalization causes; the Heinz groups do not support such
agendas.
The allegations that tie Heinz Kerry to anti-globalization protests
miss the mark, said King, the endowments chief.
"These little-minded and uninformed people keep attacking
us," he said.
But a member of the Heinz board takes a more cautious approach,
saying in an interview on condition of anonymity that the
association with Tides will be reconsidered. "We have
to make sure there aren't any appearance issues," the
board member said.
Heinz Kerry's support of other groups, such as the League of
Conservation Voters (LCV), also rankles her critics. The league is
the political nexus of the environmental movement, with a board of
directors that reaches deep into the nation's famous or wealthy
elite. The directors include such names as Theodore Roosevelt IV,
Rampa Hormel and Marie Ridder.
Many of them are Kerry supporters, as is LCV President Deb
Callahan. Between 1993 and 2003, the Heinz Family Foundation
contributed $55,000 to the organization, Callahan said in an
interview. It was not because of that support, but because of
Kerry's record on environmental legislation, that the league gave
Kerry an early endorsement in January.
"He had the strongest environmental record in the field of
candidates," Callahan said.
But Ron Arnold, a critic of the environmental movement who has
written several books on abuses of power under the green cause, has
said the endorsement reflected Heinz Kerry's financial support of
the league and demonstrated the way she would use her money to pull
strings outside official channels.
"This is very Machiavellian," Arnold said.
The tempest -- involving Heinz Kerry's support of environmental
causes -- illustrates, experts say, the very problem that her
philanthropic work could cause Kerry if he reaches the White House.
"She may recognize that it is wiser to turn it over to some
other group or to her children," said Hess, the political
analyst.
Additional recommended reading:
Heinz Center issues first annual update to The State of the
Nation's Ecosystems