Anne and Gordon Badgley, who received $9 million in federal grants for their nonprofit, Heritage Community Services, also set up Badgley Enterprises to market and sell their abstinence-only curriculum, Heritage Keepers. While Heritage's IRS 990s are sketchy and marked by vague expenses, even a student loan repayment, they clearly show that the Badgleys pocketed $174,201 from the taxpayer-funded nonprofit by buying the curriculum from their own private company.

Then there is Rosenberg Communications, headed by Wade Horn's longtime friend and co-author Jeffrey Rosenberg, who served as communications director at Horn's National Fatherhood Initiative. When Horn took his HHS job in 2001, Rosenberg launched his PR firm, which has since netted $8.8 million in contracts from HHS--contracts that account for the bulk of the two-man company's income. Rosenberg's client list is rounded out by some familiar names--most of them recipients of federal money: IYD, MISH, the Children's AIDS Fund, Gerard, Focus on the Family and Pal-Tech, which joined IYD to run HHS's multimillion-dollar capacity-building program for faith-based groups.

The IYD and the Children's AIDS Fund, though themselves nonprofits, have not been bad business for Shepherd and Anita Smith. Shepherd and Anita draw salaries and expenses from both groups: Shepherd as president of IYD and vice president of the Children's AIDS Fund; Anita, neatly, as president of the Fund and vice president of IYD. In 2003 their combined salaries were more than $200,000. To supplement that meager pay, each year since 2003 the Children's AIDS Fund has made substantial loans to the couple. The two groups also just happen to lease their shared offices in Sterling, Virginia, from an entity owned by the Smiths. According to IRS filings, the two nonprofits listed combined occupancy expenses of $66,000 for 1999. Two years later, the expenses jumped to $185,000, and by 2003 the two groups were paying a combined $203,000. Nonprofit experts contacted for this story said the huge jump in occupancy expenses combined with the fact that the two groups were paying a company owned by the Smiths raises a red flag.

The two organizations have long played a role in pushing socially conservative approaches to AIDS--mandatory HIV testing, opposition to condoms and needle exchange and an abstinence-only approach to HIV prevention--and questioning condom efficacy through the creative manipulation of data. IYD has also insinuated itself into some of the country's most conservative Statehouses. In 1998 Virginia Governor Jim Gilmore and Claude Allen, then his secretary of health, threw their state's entire $1.5 million sex-ed budget into IYD's abstinence-only school program along with a statewide television and radio campaign crafted by the group. An even more lucrative future was rising for the group in Texas, where IYD sold its Right Choices for Youth initiative to the state as part of then-Governor Bush's aggressive faith-based policy there. In March 1999, Bush gave the welcoming speech at an IYD conference in Dallas--a harbinger of the close relationship to come.

With Democrats now controlling Congress, this faith-based feeding trough may soon run dry. At press time, Democrats are poised to cut off one $50 million abstinence-only funding stream, through Title V, which requires renewal by June 30. Henry Waxman, the California Democrat who chairs the House government reform committee, is considering hearings on Bush's abstinence programs--hearings that could expose the conservative pork barrel they've become. Since February--perhaps to avoid those Waxman subpoenas--three ACF directors have resigned. First to leave was Jeffrey Trimbath, who jumped to a fundraising post with the Heritage Foundation. A month later Keroack vacated his post. Then on April 2 Wade Horn announced his resignation. But the revolving door of influence-peddling is still turning. Horn hired on with Deloitte Consulting, where according to a Deloitte statement he "will be a key advisor to health and human services clients of Deloitte Consulting's state government practice." Horn's former boss at HHS, Tommy Thompson, already heads Deloitte's Center for Health Solutions.

As investigations unfold over the summer and fall, the Institute for Youth Development will continue to serve as a conduit for HHS's Compassion Capital Fund, through which IYD disperses grants to a select group of well-connected evangelical abstinence-only and crisis pregnancy centers. The money IYD disperses can be used for just about anything these organizations might need--from computers, software and office equipment to administrative training. While federal guidelines prohibit the use of these funds for "religious activities"--worship or proselytizing--it's clear that the infrastructure for these evangelical outfits is being subsidized by taxpayers. Even if the funds are not immediately applied to religious purposes now, they will remain to serve those purposes down the road.

Without oversight and defunding from Congress, the money will continue to flow for the next five years into Raymond Ruddy's extended family of antiabortion, anti-condom, anti-gay, abstinence-only Protestant evangelicals and Catholics--a radical consortium that threatens the health of millions.

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