IT'S not on any tourist's itinerary, but there is one venue in the Washington DC area which never ceases to excite the senses as much as any number of Lincoln memorials. The first time I visited the Arlington headquarters of the Freedom Forum, I was to take part in a seminar on the state of the Hong Kong media. Most non-profit organisations dealing in such rarified domains as the freedom of the world's press usually operate out of a two-room hovel with peeling wallpaper and a 1970s coffee machine that's on the blink. Or so I thought. Taking the lift to the top floor of a shiny new office block, the lifts opened onto what looked like a cross between Jardine's HQ and a gentlemen's club. Wall-to-wall carpet, wood-panelling, sweeping staircase and a specially-commissioned triptych of the Forum's chairman, Al Neuharth. That's just the first level. One is then whipped upstairs to the roof terrace, where guests are served delicate canapes and chilled Chardonnay, while admiring the best views available of the capital's skyline. I admit to having felt a trifle uncomfortable discussing the jailing of Chinese journalists in the midst of such conspicuous, yuppie-heavy luxury. What I didn't know at the time was that I was not the only one. Many of the Forum's staff have been operating under a cloud in recent months, waiting for judgment from the New York State Attorney-General, who has been probing such bald-faced overspending and self-indulgence on the part of the Forum's trustees that it truly defies belief. Assistant Attorney-General Sean Delany summed it up last week after announcing terms of a settlement with the trustees which avoided further legal action. 'It appears that the corporate mentality may have been transferred to the charitable world, and that is not appropriate,' he said. 'We don't ask non-profit groups to take a vow of poverty, as Al likes to say, but we do ask them to take a vow of frugality.' The Forum's programmes admittedly do much good in promoting journalistic training and independence around the world. But when an organisation can spend US$34 million (HK$262 million) in one year, 1991, in operating costs, and only $20 million in grants and donations, one has to ask who really profits in the non-profit world. Not that the Forum is hard up. After selling off the shares it held in publishing giants Gannett - whose founder, Frank Gannett, started the foundation in 1935 - it now holds around $700 million in assets. It doesn't have to ask for outside donations. But it does demand tax-exempt status, and that's why its jet-setting, glass-clinking board has finally had to stand up and be counted. Although 14 trustees contributed to the $174,000 return payment to the Forum demanded by the Attorney-General, the main player in the farce is Mr Neuharth. After retiring from Gannett - for whom he founded USA Today in the 1980s - he moved over to chair the then Gannett Foundation, which later changed its name to the Freedom Forum. Mr Neuharth, whose penchant for lavishness was legendary at Gannett - he used to maintain a year-round suite at New York's Waldorf Astoria at company expense - seems to have had no intention of going frugal on entering the non-profit world. He spent $15 million of the Forum's funds on building and decorating its Arlington HQ, ordering over $1 million of art from a dealer friend and spending $280,000 just on custom furniture - which Mr Delany called 'the most egregious example of overspending'. His own desk is said to have cost $40,000, and then there was the treadmill and massage table he ordered for his office. DURING the early 1990s, the Forum's philanthropic work centred more on its trustees than its grantees. Apart from a first-class fact-finding trip to Hong Kong and other Asian climes, board members - with spouses in tow - have flown to many exotic venues for executive meetings; including a Mexican resort and Los Angeles during Super Bowl week. In 1992, the multi-millionaire Mr Neuharth paid himself $130,000 in trustees fees, and the other directors earned $50,000 and up. Such salaries are way above what other bodies pay, especially when the work is supposed to be done out of charity. But the most cynical exercise of all came in 1990, when the Forum paid over $40,000 to snap up 2,000 copies of Mr Neuharth's autobiography, Confessions Of An S.O.B, claiming it was of educational use. But instead of buying it direct from the publisher at a discount, the Forum was unable to explain why it had bought copies from shops around the country. Mr Delany was unequivocal in his assessment. It was, he said, 'a vain attempt to enhance the status of the book on the best-seller list'. But it was anything but vain - Confessions entered the New York Times list and stayed for several weeks. Mr Neuharth admitted last week that buying the exercise equipment 'was a dumb thing to do', but added, seemingly without remorse: 'That $3,957.50 simply fell through the cracks in our fast-paced, multi-million dollar building programme.' Some cracks. The Forum's president, Charles Overby, even declined to accept it had done anything wrong, saying it had agreed to the settlement only to avoid an expensive court case. Frank Gannett, who can never have envisioned what would be happening with his endowment nearly 60 years on, must surely be turning in his grave.