Santorum Surge Brings Ethics Questions

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Santorum Charity Backer Got Federal Earmark

The other issue that captivated Santorum critics involved a non-profit charity called Operation Good Neighbor. Santorum founded the organization to "illustrate compassionate conservatism" but did not take a formal role in its day-to-day operations. The charity was run by his campaign staffers. It operated out of the same building as his campaign headquarters. And its board included several top Washington, D.C. lobbyists who had clients with millions of dollars in business before the U.S. Senate, according to a 2006 report by WTAE, the ABC News affiliate in Pittsburgh.

The chairman of Operation Good Neighbor was Michael O'Neill, CEO of Preferred Real Estate. The company was involved in a waterfront development in Chester, Pa., that, with Santorum's help, benefitted from more than $8 million in federal grants, according to local reports.

O'Neill told ABC News that accusations suggesting the charity work and his development were connected were "crazy."

"My answer is absolutely not," said O'Neill, who is now out of the real estate business. "I was never told, 'If you do this, we'll help with that.' They were completely unrelated."

O'Neill said Santorum was a figurehead with the charity and that the senator derived no benefit from the work the charity performed -- doling out contributions to small groups around the state. "He was proud of the work of the charity," O'Neill said. "Rick helped bring exposure, but other than that, he didn't get anything out of it."

O'Neill also said the former senator should be proud of the waterfront development, which he says has helped deliver 2,000 jobs to downtown Chester, where there is now a soccer stadium, an office building, and a casino.

Santorum also defended the federal grants in a letter to the Philadelphia Daily News, saying his efforts to win federal money for O'Neill's waterfront development represented "a prime example of how, when used appropriately, earmarks can be beneficial."

"When Preferred Real Estate became interested in investing in the region, specifically in the revitalization of a blighted former generating plant, I was ecstatic -- this was exactly the type of project that could kick off a full-scale economic rebirth and help combat poverty," he wrote. "So, working with the city, I helped bring federal money to improve access to the riverfront, renovating roads like Route 291 and Highland Avenue, as well as to better the environment of the riverfront, making it a more attractive place for Pennsylvanians to work and live."

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O'Neill has not committed to supporting Santorum's presidential bid, saying he is waiting to see if Santorum can focus on more mainstream economic issues, rather than social issues.

"If he doesn't win it won't be because of his ethics," O'Neill told ABC News. "What's going to kill him is, this country wants someone down the middle."

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