White House Rejects Salvation Army Proposal

After being accused of striking a secret deal with the Salvation Army, the Bush administration announced today it will not issue a new federal regulation sought by the church to protect the right of taxpayer-funded religious organizations to discriminate against homosexuals.

"The White House will not pursue the [Office of Management and Budget] regulation proposed by the Salvation Army," White House press secretary Ari Fleischer said in a written statement late today.

The announcement came after gay and civil rights activists had accused the White House of promising to revise an OMB regulation called a "circular" in exchange for the Salvation Army's support for President Bush's faith-based initiative.

"The administration is in fact willing to throw the rights of some citizens overboard in return for political support," Wade Henderson, executive director of the Leadership Conference on Civil Rights, said at a news conference in Washington this afternoon.

Internal Memo Revealed

Excerpts of an internal Salvation Army document published today by The Washington Post said the White House had "committed" to change the circular in order to shield religious groups from state and local laws prohibiting anti-gay hiring practices.

Other excerpts from the 79-page report suggested the Christian charity believed the assurance had been given in exchange for its promise to support Bush's legislative proposal to boost funding for churches and other religious organizations that provide certain social services.

"This kind of backroom deal, this quid pro quo arrangement that would allow religious organizations to circumvent civil rights laws enacted by elected officials in state and local municipalities is reprehensible," said Winne Stackleburger, political director of the Human Rights Campaign, the nation's largest gay rights organization.

Fleischer said earlier today the administration had told the Salvation Army its suggested rule-change "would be reviewed," but insisted there were "absolutely not" any deals struck or promises made. He said administration officials have "advised" the group of its apparent misunderstanding.

The Salvation Army, for its part, claimed before today's late announcement that it had never been under the impression that the Bush administration had made its final decision on the matter.

"The Salvation Army pointed out this issue and the White House has been looking at it," said David Fuscus, a spokesman for the organization. "We understood all along that the White House has not made a decision on this."

Faith-Based Initiative Stalled

The faith-based initiative unveiled by the president in January and now pending in the House would allow religious groups to compete for government contracts to deliver a wide variety of services, such as alcohol- and drug-abuse treatment, job-training, housing and after-school programs. It calls for $24 billion in new federal grants and tax deductions for charitable institutions over 10 years.

The change in government regulations the Salvation Army had been seeking would bar state and local governments from receiving federal grants if they impose restrictions on anti-gay hiring practices by federally funded religious groups.

"What this is really about is the Salvation Army trying to get a license to discriminate using public money," said Matt Coles, director of the ACLU's Lesbian and Gay Rights Task Force.

The president's legislative initiative is stalled in Congress and Senate Majority Leader Tom Daschle, D-S.D., who opposes the plan, said today the controversy would make it even less likely it would ever become law.

"It raises a lot of questions and, I think, may actually imperil the president's efforts to get something passed," he told reporters on Capitol Hill.

But the nation's leading gay GOP group, the Log Cabin Republicans, said the president's critics, not the administration's policies, were to blame for the controversy.

"One Salvation Army staffer's misguided memo became something akin to a child's game of 'whisper down the lane' for groups opposed to the president," LCR Public Affairs Director Kevin Ivers said in a written statement. "[A] long list of liberal special interest groups lined up, before checking the facts, to claim the White House was mounting a non-existent attack on the gay community."

Civil Rights Act At Issue

But even as it announced its decision to reject the Salvation Army request, the administration signaled its commitment to allowing it and other faith-based groups to discriminate against gays.

Fleischer stressed that the 1964 Civil Rights Act grants religious organizations wide latitude in hiring practices and does not prohibit them from discriminating on the basis of sexual orientation.

"These protections ensure that religious organizations have the right to hire individuals who share their religious faith," he said in his statement this evening.

Fuscus said the Salvation Army prohibits gays from becoming ministers with the organization, but does not have an across-the-board ban on hiring homosexuals.

"It does not discriminate against anyone in its hiring practices. However, when it's looking at people who are hired as ministers, it does hire people whose values are consistent with the church's philosophy," he said. "It's a right that every church has — to hire who it wants."

A White House official told ABCNEWS the senior members of the administration who ruled out the proposed rule-change had only become aware of the Salvation Army's request today.

ABCNEWS' Terry Moran contributed to this report.