Loan Charity's High-Flying Guests Exposed
Educap is a multibillion-dollar student loan charity run by CEO Catherine Reynolds. As CBS News Investigative Correspondent Sharyl Attkisson reported Monday night, Educap is under investigation by the IRS and Congress for alleged abuse of its tax-exempt status because it charges high interest on charitable student loans, and provides lavish perks with millions in compensation for Reynolds and her husband.
CBS News has obtained exclusive details of what may have been the biggest charity perk: use of Educap's $31 million luxury jet, which costs thousands of dollars an hour to operate.
Investigators say for five years, Reynolds jetted friends, family and luminaries to faraway and exotic destinations that sometimes had little to do with the charity's mission.
CBS News has learned that high-profile names on the Educap flight list include CIA Director Leon Panetta, former Sens. Tom Daschle and Ted Stevens, former FBI Director William Sessions and Chicago Mayor Richard Daley.
According to flight records, Panetta and Daschle, while not in public office, accompanied Educap's Catherine Reynolds on flights to private business meetings not related to the charity.
Reynolds also took Daschle and his wife on a tour with seven stops in Europe and the Middle East.
Ted Stevens, his wife and daughter were along on dozens of flights, hitting destinations like Vail and Aspen, Colo., before the senator was convicted on corruption charges last fall.
And records show Reynolds took Chicago's Daley and his wife on 58 flights including ones to Turkey, Asia and Sweden.
Watchdog Stephen Burd says money spent on the jet comes off the backs of students, who have Educap loans costing up to three times more than government loans.
Attkisson asked Burd if he thought Educap was acting like a for-profit company operating as a charity.
"Exactly," said Burd, of the New America Foundation. "Educap is the worst case that I've seen of a charity - a so-called charity - abusing its tax-exempt status."
Reynolds wouldn't talk with CBS News. Educap has said its loans are competitive with private companies. As for the jet, Educap has said its use was appropriate. None of the passengers would talk with us, but there's no law against flying on charity jets. Panetta has told Congress he "acted in full compliance with tax laws."
EduCap sold its pricey jet after the IRS began looking into it. But that hasn't ended the controversy - or the investigations.
