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Top court considers fund-raising fraud

WASHINGTON — The public should be protected from telemarketers who shade the truth about how much of your contribution really goes to charity, government lawyers told the Supreme Court.

The court heard arguments Monday on what the government can do about charity fund-raisers who take most of the donations and turn over a small percentage for good works.

Illinois, backed by 45 states and the federal government, says some such fund drives amount to fraud. Telemarketers and many large charities warn that their pitches are protected as free speech.

"We ask this court not to hold that half-truths are constitutionally protected," Illinois Assistant Attorney General Richard Huszagh told the justices. His state wants to stop misleading sales pitches made by a professional fund-raising firm in the name of a Vietnam veterans' charity called VietNow.

Telemarketing Associates Inc. took in more than $8 million on behalf of the veterans' charity, and pocketed 85 percent of the money. Better-known charities have taken pains to distance themselves from VietNow and its practices but still side with the charity and its fund-raiser in the Supreme Court case.

Charities say potential donors would slam down the receiver if told upfront that a telemarketer would keep the overwhelming share of any contribution. The fees and overhead costs they charge simply are a cost of doing business, charities contend.