Night Out Leader Says Salary Caps Can't Touch Him

Senator Arlen Specter questions Matt Peskin's pay, which exceeds his own as a US Senator, in the face of caps set on  salaries paid under Federal grants.  But Mr. Peskin says it's none of the government's business, because it's paid for by T-shirt sales, not government grants.

In a follow up to the story on the quarter million dollar paycheck of the head of the group that sponsors National Night Out, the Philadelphia Inquirer (Katie Stuhldreher) reported the reaction of Sen. Arlen Specter, who was responsible for earmarking the $290,000 government grant to the National Association of Town Watch (EIN 23-2186642 Form 990).  He expressed surprise at the amount of the pay, noting that there are caps on the pay of organizations that receive Federal grants. 

There are, but their effect is limited.  I wasn't able to find the Department of Justice regulations, but there is a similar provision for grants by the National Institutes of Health.  Direct salaries under NIH are limited to the Executive Level I pay scale of the Federal government.  We have already talked about this (US Federal Executive Pay Puts Charity Salaries in Perspective, April 4, 2007).  Executive Level I currently is $186,600.

But there is fine print.  The implementation notes explain:

An individual's base salary, per se, is NOT constrained by the legislative provision for a limitation of salary. The rate limitation simply limits the amount that may be awarded and charged to NIH grants and contracts. An institution may pay an individual's salary amount in excess of the salary cap with non-federal funds.

So Mr. Peskin is correct (if the Department of Justice provision is similar) that his salary can exceed the guidelines if it's paid for by other income.  National Night Out in fact makes most of its money (over a million) by selling products with its logo on it. 

Still, it's probably not a good idea to be quoted in the paper thumbing your nose at the Senator who is responsible for earmarking funds to your organization.

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