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Tuesday, July 17, 2018

Dark Money Group Told IRS It Wasn’t Political — Then Spent $1 Million On Campaign Ads

by Justin Elliott, ProPublica.

A dark money nonprofit group that has run more than $1 million in ads in the Ohio race for U.S. Senate told the IRS last year it did not plan to spend any money to influence elections when it applied for recognition of its tax-exempt status.

ProPublica first reported on the group, the Government Integrity Fund, after information from television station political ad files became available online (see our Free the Files project), showing extensive spending by the Fund.

The group’s filings with the IRS  illustrate how “social welfare” nonprofits, also known as 501(c)(4)s, are playing an aggressive role in this election, pouring tens of millions of dollars into races around the country, while taking advantage of the donor anonymity their tax status provides.

The Fund applied for IRS recognition last December and received the IRS’ approval less than two months later.

Question 15 on the application asks, “Has the organization spent or does it plan to spend any money attempting to influence the selection, nomination, election, or appointment of any person to any Federal, state, or local public office or to an office in a political organization?”

Much hinges on this: Under the tax code, social welfare nonprofits may not have political campaign activity as their primary purpose, though exactly what that means is a subject of much debate.

Fund chairman Tom Norris, who signed the Fund’s application, checked the “No” box on Question 15.

In a statement to ProPublica, the Fund said that “legally, the concept of ‘influencing elections’ has been narrowly defined” and that “throughout its existence, [the Fund] has regularly consulted with experienced tax counsel to ensure it is in full compliance with the federal tax laws.” (See the full statement.) Norris, a Columbus lobbyist, did not respond to calls.