Kim Barker wrote an eye-opening series on the ways in which anonymous Republican money is flooding into the presidential race through a legal loophole blessed by Congress and the FEC. Under regulations governing 501c4’s, you may collect unlimited amounts of gifts and funnel them to virtually anyone. Donors’ names are unreported, amounts are unrecorded. If you give through a company, it also gets to write it off as a business expense! There’s only one small catch. Your primary purpose has to be to “operate primarily for the promotion of social welfare,” which it defines as working for the “common good and general welfare of the people of the community.”
The Republican Jewish Coalition has its own such group, but it doesn’t give a fig for promoting social welfare. It’s promoting the welfare of the Republican Party and that’s not kosher according to IRS rules. The key is getting the IRS to act against this violation.
Barker writes about this charade:
Our examination shows that dozens of these groups do little or nothing to justify the subsidies they receive from taxpayers. Instead, they are pouring much of their resources, directly or indirectly, into political races at the local, state and federal level.
As Barker portrays it, the only goal this 501c4 promotes is the defeat of Barack Obama. I suppose if you’re a 1% fat-cat Jewish Republican then getting Romney elected is considered social welfare. That is, if you define doing the bidding of wealthy pro-Israel Jews as social welfare (for themselves).
The RJC makes no bones about the goal of its 501c4. There isn’t even a veneer of promoting a goal as lofty as “social welfare.” The only goal is politics and narrowly defined, single-interest politics at that. Though the group blithely lies about this as Barker implicitly notes:
The Republican Jewish Coalition, though formed in 1985, in many ways epitomizes the new breed of political-minded social welfare nonprofits.
The group’s initial IRS application said it would not engage in politics, yet its 2010 tax return says it gave almost $3.8 million to other groups for political activities.
Separately, the Republican Jewish Coalition told the FEC it spent more than $1.1 million on political ads, money that wasn’t reported to the IRS. Together, the grants and the political advertising made up almost 40 percent of the total expenditures of the group, which is chaired by GOP super donor and casino magnate Sheldon Adelson.
“Our efforts and our expenditures are well within our primary purpose test requirements,” Brooks said in an interview. “Everything we do is strictly within the legal guidelines.”
And I’ve got a bridge and some beach-front property in Florida to sell Brooks.
The RJC is raising $6.5 million in this endeavor, which may just be the start, since ProPublica finds that the RJC spent $12.4-million in 2010. That’s a far cry from the $1 or $2-million they’ve raised during past presidential races. As Matt Brooks tells it, they don’t care much who you are, how you earned your money, or even what currency it is:
“Contributions to the RJC are not reported,” Brooks told the people sitting around a horseshoe-shaped table. “We don’t make our donors’ names available. We can take corporate money, personal money, cash, shekels, whatever you got.”
I’m sure this tacit invitation to Israeli citizens to donate money to defeat Barack Obama was meant in jest. Otherwise, Brooks was encouraging people to violate campaign finance laws. It is still illegal for foreigners to donate to U.S. election campaigns, though one of the beauties of the permissive Supreme Court approach to campaign donations is that donors’ names aren’t publicized. That means the RJC could accept funds from Israeli citizens and expect that it could shield this illegality from public knowledge.
Barker in her story describes a fundraising pitch on behalf of the RJC which was offered at the New York law firm Weil Gottshal Manges. I believe in giving credit where it’s due. If the firm wants to elect a Republican president and encourage violation of IRS regulations, let them be known and named and shamed.
As of recently, 501c4’s had spent $71-million. But hey, the night, and the race are young. Those Republican megawards are just gettin’ started.
As Pablo Eisenberg succinctly put it in the most recent Chronicle of Philanthropy “…the Internal Revenue Service and state attorneys generally have been unable or unwilling to play an effective oversight role…”
The same issues discussed here (fraudulent application for TE status, no bona fide charitable purpose etc) were submitted in an IRS complaint about the American Israel Public Affairs Committee. After filing a complaint, filers can expect….nothing. Even back in the day when J.W. Fulbright was pursuing what Walter Pincus recently called “all sorts of things they weren’t supposed to do” http://www.q-and-a.org/Transcript/?ProgramID=1405 the IRS wouldn’t give the Chairman of the Senate Foreign Relations Committee the time of day.
Don’t hold your breath waiting for the IRS to act.
AIPAC has an outstanding 1962 DOJ request to reclassify itself as a foreign entity, an agent of the government of Israel.
Some are “above the law”.
Can’t a public suit be initiated against the taxing authority for its inaction with respect to policies it has itself articulated?
The public generally doesn’t have “standing” to go after abusive nonprofits in that way. It’s really entirely up to the IRS, and they only revoke TE status of small, unconnected orgs.
See Hopkins, Bruce R., “The Law of Tax Exempt Organizations”, 9th Edition
What about all the taxpayer subsidized “help Israel” funds which support illegal settlements and even provide arms! The IRS doesn’t life a finger against them. I have complained about 18 such organizations to Nanette M. Downing, Acting Director, EO Examinations at the IRS and been told that information about the named organizations is CONFIDENTIAL, as are the “on-going investigations” of which there are none. There are no investigations and since when are charitable, tax-subsidized entities entitled to “confidentiality?”
The other side of IRS laxity is the grueling enforcement levied against average working Americans each of whom will provide about $21.50 directly to Israel in 2011. Why do all these organizations get away without taxes, on big sums of money, and the little American taxpayer is hounded to death over $100 but can’t support a family in America? Israelis receive money from American taxpayers who can ill afford it.
That’s pretty hilarious isn’t it? By regulation all nonprofit tax returns are public, and yet Downing’s group sends the same tired form letter about tax information being confidential. They don’t even bother to come up with a plausible reason for being in-transparent and doing nothing.
Eisenberg is 100% right. Don’t look to the IRS or DOJ for enforcement of abuses that shift the burden onto the little guy while inflaming the region. It’s just not going to happen.
This lack of accountability for the IRS is as pressing and important an issue for Americans as any high profile story currently, e.g. war with Iran (more war? how boring). The behavior of the IRS expresses tacit policies that no electorate ever endorsed.
People really need to start researching what Mitt Romney believes and spread the word before it is too late.
http://www.youtube.com/watch?v=IGFAph3lWqw