501C3
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right-wing group Moms for Liberty was recently hit with an Internal Revenue Service (IRS) complaint probing "whether Moms for Liberty is a political educational organization," The Guardian reports.
Per The Guardian, the eight-page complaint filed against the "extremist" group by a Michigan attorney "alleges that the rightwing organization is in violation of its 501(c)4 non-profit status," and also questions "if Moms for Liberty is an action organization, raising questions about its participation in political campaigns and active recruitment of school board candidates."
University of Pittsburgh Associate Professor of Law Phillip Hackney told the news outlet he doesn't believe the complaint will go far, but "said he does think the complaint is correct in bringing up the group's intervention in political campaigns."
READ MORE: Top Democrats ignorant of 'extremist' Moms for Liberty despite warnings the group is dangerous
The Guardian reports:
IRS investigations into a 501(c)4 like Moms for Liberty would be 'heavily fact intensive',Hackney said, with an agent reviewing materials and going back and forth with attorneys for 18 months. The IRS has a statute of limitations to complete an investigation within three years, he said. If the group's status is revoked after that time, it probably would not owe back taxes but would reorganize as a taxable, private organization with even less transparency and no prohibitions on political campaigning.
The complaint obtained by the news outlet states, "The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. However, a section 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity."
The document also emphasizes, "It would be a permissible educational purpose if there were advocating to remove gender discussions from classrooms and schools if there was a balanced presentation of benefits and drawbacks of using a person's preferred pronouns, supporting LGBTQ youth, impacts on children of being 'exposed' to LGBTQ supportive environments. There is not." I DUNNO DOES LUNG ASSOC DO BENEFITS OF CIGS?
during a segment of MSNBC's Inside with Jen Psaki earlier this month, Psaki exposed the group in a scathing report, noting, "As for their claim that they are just a group of concerned, nonpartisan moms who happen to care about liberty, consider this: One of the founders, who's name is notably emitted from its website, is a current Republican school board member, who is married to the now-chairman of the Florida Republican Party. In 2021, he told The Washington Post, "I have been trying for a dozen years to get 20- and 30-year old females involved with the Republican Party. But now Moms for Liberty has done it for me."
READ MORE: 'May not be what you think': Jen Psaki exposes 'unapologetically extreme' Moms for Liberty group
The Guardian's full report is available at this link (subscription required).
YIKES SEE AMICUS
:{
}:
attempt to use NAACP v Ala/14th to make corp dark $ CONST PROTECTED?!
...
The negative effects that these new amicus campaigns have on our democ-
racy are twofold. The wealthy few fund the campaigns, excluding the majority
of Americans from the process and exacerbating preexisting countermajoritarian
and inequality concerns. And without a mechanism for disclosure, the general
public currently does not, and cannot, know how judicial reasoning is influenced
by masked private actors.
...
Donors have reaped enormous returns on their investments. As I have doc-
umented, the :{Roberts Court has handed down over eighty partisan Republican
5-4 decisions}: 87 that benefit an easily identifiable Republican Party-donor inter-
est.88
:{:{These include decisions that remove constraints on anonymous giving
(e.g., Citizens United v. FEC, 89 Americans for Prosperity Foundation v. Bonta 90}:), as
well as decisions that weaken the power of countervailing institutions like labor
unions}: (e.g., Janus v. American Federation of State, City & Municipal Employees,
158:{
Council 3191), regulatory agencies (}:e.g., Seila Law v. Consumer Financial Protection
Bureau92), and the civil jury (e.g., Epic Systems Corp. v. Lewis93).
The effects of this litigation strategy on our democracy are frightening: the
courts are becoming an arena for enacting policies by judicial decree that are too
unpopular to pass through democratically elected legislatures. These coordi-
nated efforts warp the judiciary toward anonymous, ultrawealthy donor inter-
ests, all without the public ever learning about the role of dark-money interests
in shaping the law. The Supreme Court was already, by its nature, an avenue for
countermajoritarian ideas and policies to prosper.
But as Barry Friedman ex-
plains, especially when the Court is acting during a period of judicial suprem-
acy—as it arguably is now—the countermajoritarian aspect of the institution will
flourish.94 Alongside those concerns, the emergence of the dark-money amicus
machine increases the probability that the Court’s rulings will run counter to the
will of the American people (i.e., counter to democracy), and instead for the
benefit of the hidden interests that had a secret hand in putting Justices on the
Court and then filed masked amicus briefs...
151
:{Sure enough,:{ Chief Justice Roberts’s}: ruling in favor of the Koch network—a:{6-3 decision with all Republican-appointed Justices in the majority—cast doubt}:
on the constitutionality of disclosure requirements of any kind, turbocharging
the kind of secretive influence through which the Koch operation and its allies
already dominate the public sphere.}:56
:{
}:
:{:{Significantly, many of the donors behind these amici lobbied for the confir-}:
mation of the Justices hearing the case. For instance, Americans for Prosperity,
the 501(c)(4) group directly affiliated with the plaintiff Foundation, spent “mil-
lions” of dollars on a “Full Scale Campaign” to confirm Justice Barrett to the
bench while AFPF’s cert petition was pending before the Court.}:57
Yet, in spite of all this lobbying on her behalf by an affiliate of one of the parties, Justice Barrett
rebuffed calls for her recusal in this matter by me and others—a recusal seem-
ingly required under the Court’s own due-process precedent58—and heard the
case anyway.59
:{
}:
D. Amicus Briefs and Dark-Money Influence on the Courts
:{
}:
Amicus briefs play an important role in the appellate process. Indeed, I have
filed many myself.60 Interested parties should be able to use amicus briefs to ad-
vance their view of the law or their conception of the public interest or to educate
...
https://www.yalelawjournal.org/pdf/F7.WhitehouseFinalDraftWeb_v4zwakx5.pdf
lee f
https://theintercept.com/2020/02/15/dark-money-irs-reporting-501c
dark MONEY GROUPS backed by foreign corporate donors are supporting the Trump administration’s decision to roll back one of the last remaining ways for authorities to monitor the flow of unlawful campaign cash in American elections.
In recent years, 501(c) nonprofits have become the entities of choice for secret campaign spending.These nonprofit groups, which do not have to report any donor information to the public, can receive unlimited contributions from any source and, thanks to the Supreme Court’s 2010 Citizens United decision, spend unlimited amounts on elections.
Foreign spending, whether by a foreign national or a foreign-owned corporation, is still illegal under federal law. But the law has been poorly enforced, and the few instances in which penalties have been applied in recent years have come in reaction to publicly reported foreign corporate spending to Super PACs, such as The Intercept’s reporting on Chinese corporate donations in 2016 and the recent federal indictment over a shell company owned by a Russian national that gave to President Donald Trump’s Super PAC in 2018.
The one check on foreign contributions to dark-money groups has been the Schedule B form, which reports 501(c) donor information confidentially to the Internal Revenue Service. Under a new rule proposed last September by the Treasury Department and the IRS, nonprofits will no longer be required to report donor information, even to the government, allowing an unprecedented level of secrecy.
Lobbyists for foreign-funded groups have pushed the administration to move forward with the rule, which is close to being finalized. The U.S. Chamber of Commerce, the largest business lobby organization in the world, spent over $10 million to influence the last 2018 midterm election cycle using its general fund. The group, which has foreign corporate donors, has lobbied in support of the IRS rule to repeal the Schedule B requirement, claiming in a letter to officials that the accidental leak of donors could reduce corporate free speech rights.
“Identifying, harassing, and intimidating the organization’s supporters is a chief means of silencing that organization’s speech,” wrote Caroline L. Harris, the Chambers’ chief tax policy counsel, and Ryan P. Meyers, the deputy general counsel of the group, in a regulatory letter to officials overseeing the rule change. “The Chamber applauds the work of Treasury and the Internal Revenue Service (IRS) in eliminating onerous reporting requirements.”
The National Association of Manufacturers, which counts several corporations based in foreign countries as members, in a letter to IRS officials, similarly called the Schedule B requirement an “unnecessary administrative filings that raise the potential for misuse in a way that chills protected speech.”
Both NAM and the Chamber of Commerce, which spends more than $160 million a year, are organized as 501(c)(6) trade associationsand under no obligation to disclose donor money to the public — only to the government through the annual Schedule B form to its 990 annual filing. After the Citizens United decision, the two groups led an effort to defeat the DISCLOSE Act, legislation that would have forced groups engaged high-dollar election advocacy to reveal donor information. The Chamber also lobbied successfully to stop President Barack Obama from issuing an executive order to force government contractors to disclose grants to 501(c) groups.
Foreign-based firms such as Brazilian petrochemical firm Braskem, Al Zayani Investments in Bahrain, and Turkish conglomerate Tekfen are listed on the Chamber’s website as dues-paying members. Faced with criticism in the past that its foreign funding might bleed into the Chamber’s vast domestic lobbying and campaign spending budget, the group has claimed that any foreign donations are walled off from domestic funds, and that foreign donors make up a small percentage of its overall budget.
But the removal of the Schedule B requirement could make those claims impossible to verify. A large foreign national firm could provide multimillion-dollar donations for use in U.S. elections to the Chamber under the new rule and such giving would never be reported to government officials.
That’s precisely the danger of removing Schedule B forms, campaign finance experts warn. The Campaign Legal Center, a campaign finance watchdog that has filed the ethics complaints that led to enforcement action on foreign money in the past, cautioned the IRS that the rule would simply open the door to more foreign spending.
“Congress has failed to pass new transparency legislation, and the FEC has failed to enforce the transparency laws that are on the books,” said Brendan Fischer, director of Campaign Legal Center’s federal reform program. “As a result, the only donor disclosure reports that dark-money groups file with any federal agency are the confidential Schedule B reports filed with the IRS. These confidential donor reports are one of the few ways that federal agencies could detect and deter foreign money in U.S. elections.”
It’s not hard to comprehend the many ways in which completely secret legal entities could incentivize illegal election behavior. In 2016, reporters from the Telegraph conducted a sting operation on a Republican campaign operative working in support of Trump. The operative was offered a $2 million check from a Chinese businessman by the reporters. He responded by offering a plan for how to conceal the money, suggesting that it be routed through his consulting firm to a pair of 501(c)4 groups and then to a pro-Trump Ssuper PAC.
The FBI is also investigating the National Rifle Association over allegations that the group, which is organized as a 501(c)4, may have received financial support from Russian sources. McClatchy reported that counterintelligence officials believe that Russian interests may have contributed to the NRA’s $30 million election advertising campaign in 2016.
Foreign firms increasingly finance major American business associations. As The Intercept has previously reported, a major Chinese chemical company joined the American Chemistry Council, a 501(c)6 that routinely lobbies lawmakers and spends money in elections.
The Trump administration had originally tried to remove the Schedule B form last summer in a surprise decision. A federal judge in Montana, however, ruled that the IRS had failed to follow proper regulatory procedure and ordered the agency to conduct a formal rule-making to allow the public and stakeholders to weigh in on the change.
“The rise of ‘dark money’ in U.S. elections has made it easy for foreign entities to contravene these laws by funneling money into U.S. elections through groups that that [sic] do not publicly disclose their donors, such as 501(c)(4) social welfare organizations and 501(c)(6) trade associations,” wrote the Campaign Legal Center in a letter to the IRS.“This change would further enable foreign entities to donate millions of dollars to such organizations for the purpose of influencing U.S. elections without any risk of scrutiny by federal regulators.”
Republican-aligned think tanks have joined the business-backed push to eliminate the Schedule B.Several nonprofits backed by billionaire Charles Koch, including his marquee group Americans for Prosperity, testified on February 7 in support of the rule change. FreedomWorks, a conservative grassroots group backed by business interests, has also mobilized hundreds of letters to the agency.
Hans von Spakovsky, a former Federal Election Commission member now with the Heritage Foundation, appeared at the hearing alongside other conservative activists in support of the rule change.
Von Spakosvsky, an avowed critic of campaign finance regulations and voting rights laws, testified that “their claim that this will somehow allow foreign money to suddenly flood into American elections is absurd,” according to a transcript of his remarks. Von Spakovsky said the FEC had plenty of authority and expertise in combating foreign money during his tenure, despite the fact that the agency has historically only intervened to investigate foreign money through disclosed political action committees on a few occasions in its 45-year history. He did not cite any examples of the FEC investigating 501(c) groups.
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CMD
Fox News’ Tucker Carlson is under fire this week for racist, sexist, and homophobic comments he made while chatting on “Bubba the Love Sponge” a shock jock radio show between 2006-2011. Groups are scrutinizing Fox’s advertisers and demanding that they drop the show.
But Carlson also publishes The Daily Caller, a controversial online media outlet with ties to white nationalists that has infamously peddled everything from climate denial and anti-Islamic tropes to false prostitution charges and violence against protesters.
Carlson’s moonlighting as an extremist at The Daily Caller is heavily bankrolled by — you guessed it — the Koch brothers. An investigation by the Center for Media and Democracy (CMD) finds that the Charles Koch Foundation has poured more than $2.7 million into the Daily Caller’s non-profit “charity” since 2012, which generates the lion’s share of the “news” that the Caller publishes.
Indeed, in 2016, Koch cash accounted for 83 percent of the The Daily Caller News Foundation’s $1.1 million in revenues.
Carlson Under Fire
As if catering to white supremacists was not bad enough, Media Matters published an inventory of hateful comments made by Carlson as a guest on the show between 2006-2011.
The radio host discusses Warren Jeffs, the religious leader who was investigated in 2007 for marrying off underage girls to older men and was eventually jailed for sexual assault of minors in 2011. When the radio host condemned Jeffs for being an “accessory to the rape of children,” Carlson said “whatever the hell that means,” and going on to suggest that forcible underage marriage is not as serious as forcible child rape. Listen to the tape here.
In other interviews, Carlson called Iraqis “semi-literate primitive monkeys,” who “don’t use toilet paper or forks.” They should just “shut the fuck up and obey.” Carlson spoke about his desire for a presidential candidate to blame the “lunatic Muslims who are behaving like animals.” That candidate would be “elected king” if they vowed to “kill as many of them as [they] can.” Carlson also said Afghanistan is “never going to be a civilized country because the people aren’t civilized.” Listen to the tape here.
The release of the older audio tapes gives “context and insight” on his nightly programming today,
on MSNBC.
So far, Carlson has failed to apologize. As Fox News scrambles to control the damage, at least three advertisers — Allergan, letgo, and GreatCall — have had enough.
But with the focus on advertisers, it’s important to remember who else bankrolls Carlson’s mini media empire.
The Koch Caller?
The Kochs have long underwritten The Daily Caller. Previously, CMD reported that the Kochs gave $805,512 to The Daily Caller News Foundation between 2012 and 2015, predominantly from the Charles G. Koch Foundation. Since then, the numbers have continued to grow.
The Koch foundation gave another $946,000 in 2016 and $960,000 in 2017, the last year publicly available — for a total of $2.7 million.
In 2017, CMD analyzed emails sent by the Trump campaign to The Daily Caller subscribers and estimated that the outlet also received at least $150,000 from the Trump campaign in the months right before the November election, based on the fee charged for mailings to its list. The funding was never disclosed by Carlson or The Daily Caller as they reported on the Trump campaign.
In addition, CMD also examined the relationship between the non-profit and for-profit arms of Tucker Carlson’s operation. The mechanics of how they operate together raise serious concerns about whether Carlson’s tax-free nonprofit is operating primarily for the private benefit of his for-profit media outlet, which would be a violation of tax law.
CMD’s story was picked up by numerous media outlets including the Washington Post, which interviewed tax experts on the legality of the scheme.
“It really does look like the reason for the existence of this 501(c)(3) organization is to provide benefits to the for-profit company, and that should be a private benefit that is not acceptable,” Linda Sugin, a law professor at Fordham University, told the *Post* and other media outlets. “You can’t have money going into the foundation being used for purposes that are really to support the for-profit organization.”
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