By Kim Barker

Controversial Dark Money Group Among Five That Told IRS They Would Stay Out of Politics, Then Didn’t

January 2, 2013 4:16 pm Category: Memo Pad 14 Comments A+ / A-
Controversial Dark Money Group Among Five That Told IRS They Would Stay Out of Politics, Then Didn’t

by Kim Barker, ProPublica.

Five conservative dark money groups active in 2012 elections previously told tax regulators that they would not engage in politics, filings obtained from the IRS show.

The best known and most controversial of the groups is Americans for Responsible Leadership, an Arizona-based organization. Not long after filing an application to the IRS pledging — under penalty of perjury — that it would not attempt to sway elections, the group spent more than $5.2 million, mainly to support Republican presidential candidate Mitt Romney.

The California Fair Political Practices Commission has accused Americans for Responsible Leadership of “campaign money laundering” for failing to disclose the origin of $11 million it funneled to a group trying to influence two state ballot propositions.

The other groups that filed applications for IRS recognition of tax-exempt status saying they wouldn’t engage in politics are Freedom Path, Rightchange.com II, America Is Not Stupid and A Better America Now.

Much hangs on these applications, all of which are still pending. The tax code allows social welfare nonprofits to engage in political activities as long as public welfare, not politics, is their primary purpose. If the IRS ultimately decides not to recognize these groups, they could have to disclose their donors.

Such decisions, along with IRS’ oversight of social welfare nonprofits overall, have come under increasing scrutiny as these groups have assumed an ever larger role in elections, pouring an unprecedented $322 million into the 2012 cycle.

ProPublica has documented how some social welfare nonprofits underreport their political activities, characterizing them to the IRS as “education” or “issue advocacy.” Other groups have popped up, spent money on elections and then folded before tax regulators could catch up with them.

The IRS sent the applications submitted by the five groups to ProPublica in response to a public records request, although the agency is only required to supply these records after groups are recognized as tax-exempt. (ProPublica also obtained the pending application of Crossroads GPS, the dark money group launched by GOP strategist Karl Rove that spent more than $70 million on the 2012 elections, which we wrote about separately.)

The IRS confirmed that none of the groups had been recognized as tax-exempt and referred ProPublica to its earlier response about Crossroads’ application. In that email, the IRS cited a law that says publishing unauthorized tax returns or return information is a felony punishable by up to five years in prison or a fine of up to $5,000, or both.

A lawyer for Americans for Responsible Leadership, Jason Torchinsky, cited the same law in an email.

“If you willfully to (sic) print or publish in any manner any information about Americans for Responsible Leadership that you do not lawfully possess — and which may or may not be complete — you will be doing so in violation of (the law) and we will not hesitate to report such unlawful publication to the appropriate law enforcement officials,” Torchinsky wrote.

The other groups for which ProPublica obtained IRS applications did not respond to calls or emails for comment.

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Comments

  • Sand_Cat

    “Disclose their donors?” Is that the penalty for perjury these days?

    • http://www.facebook.com/mark.vankirk.7 Mark VanKirk

      The penalty should be not being allowed to write off donation on their taxes.

      • http://pulse.yahoo.com/_KOPKDFAUQPIIRAFI3HEXNMSHLQ Ed

        And then JAIL the person that signed the pledge.

  • http://pulse.yahoo.com/_KOPKDFAUQPIIRAFI3HEXNMSHLQ Ed

    When you are trying to destroy a democratic country lying is a standard practice.

  • nobsartist

    Lying to the IRS results in severe penalties like prison. They should not be allowed to operate and the people involved in deceiving the IRS should get prison time.

    The sentence should be long enough to prevent them from pulling off the same CRIME during the next election cycle.

  • quasm

    Ms. Barker;

    Wow. You uncovered a real scandal here. People exercising their right to free speech must be stopped!

    Dik Thurston
    Colorado Springs

  • http://www.facebook.com/people/Jim-Myers/100001512942781 Jim Myers

    “promoting a more ethical and transparent government.”

    TALK ABOUT DOUBLE SPEAK!!!!

    I cannot help but wonder what the Supreme Court must be thinking when they see the CITIZENS UNITED legislation being used to circumvent the “ONE PERSON, ONE VOTE” theory in such a blatant manner.

    When money, (Read that to mean Corporations and Unions), are more important than the actual votes of individuals, we are no longer a Nation of laws, but rather a Nation of Corporate interests.

    SHAME ON YOU AND YOUR HOUSE!!!!!!

  • http://profile.yahoo.com/HJIWONQOW4EAYMCA4QH2DDJMBU MARK

    I’ve just finished reading this article and can’t help feeling like I’ve waded through a pool of bullshit.No problem with the way the article is written but is IRS law so damn vague that these groups can pretend to abide by the law and flagrantly ignore it?

  • http://twitter.com/71LesPaul J M Sute

    ALEC claims 501(c)(3) tax exempt status which means that US taxpayers subsidize their operation. They claim on their IRS form that they are not a lobbying group. but they go way beyond just lobbying, they actually write the legislation and hand it over to right wing politicians across the country to be entered as Bills. Their tax id # is 52-0140979. Such hypocrites.

  • tpartythis

    jail.

  • http://profile.yahoo.com/RFEPMKNCBVGJYV2X7LBNDGRUEY William

    If you or I did that we would be in jail, but for these big money groups, they’ll probably pay a small fine.

    • http://profile.yahoo.com/43TMBJ4SDE6CLF54RRAANIBWH4 Ralph

      And then create another group to do the same thing all over again and again and again.

  • Sierra111

    This is criminal!

  • http://profile.yahoo.com/43TMBJ4SDE6CLF54RRAANIBWH4 Ralph

    We must get this dirty corrupt money out of our political process. If we don’t that will be the downfall of this country, not some faraway government.

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