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Saturday, October 22, 2016

by Kim Barker and Theodoric Meyer, ProPublica

To see how easy it is for a dark money group to ignore the Internal Revenue Service, look no further than the loftily named Government Integrity Fund.

The Fund, an Ohio nonprofit, spent more than $1 million in 2012 on TV ads attacking Ohio senator Sherrod Brown and praising his Republican opponent, Josh Mandel. Now the Fund’s tax return, which ProPublica obtained from the IRS this week, indicates that the group spent most of its money on politics — even though IRS rules say nonprofits like the Fund aren’t allowed to do that.

The Government Integrity Fund was founded in May 2011 and applied later that year for IRS recognition of its tax-exempt status, swearing under penalty of perjury that it would not engage in politics but would instead “promote the social welfare of the citizens of Ohio.” Within two months, the IRS had recognized the group.

It then devoted much of its resources to backing Mandel’s unsuccessful bid to unseat Brown. As previously detailed by ProPublica, the Fund was linked to a former top Mandel staffer.

The Fund’s return highlights the ways such nonprofits, known as “dark money” groups because they are not required to disclose their donors, can skirt IRS rules designed to limit their political activities. Such groups are playing an increasingly prominent role in elections, spending more than $256 million on election activity in 2012.

Dark money groups can spend money on politics as long as they can persuade the IRS that their primary purpose is social welfare. This can lead to quite creative accounting on tax forms, with groups describing ads that should qualify as political under IRS rules as “education” or “issue advocacy.”

On the Government Integrity Fund’s latest tax return — for 2012 — the group told the IRS it spent $5.2 million overall. Of that, $2 million went to two SuperPACs — mostly the Fund’s sister SuperPAC, the Government Integrity Fund Action Network — which then used the money to pay for different ads from the ones the Fund bought. According to the filing, this $2 million made up all of the Fund’s political spending in 2012.

But that didn’t include an additional $1.08 million the Government Integrity Fund spent on TV ads praising Mandel and attacking Brown in the spring and summer of 2012, which ProPublica reported on in September 2012. (The spending was tallied by Brown consultants. The lawyer listed on the Fund’s incorporation papers confirmed that the group spent more than $1 million on the ads.)

If the Fund had categorized the additional money it spent on the ads as political, almost 60 percent of its expenditures would have gone toward elections — which would seem to violate IRS rules that say a social welfare nonprofit’s primary purpose can’t be politics.

“Josh Mandel served our country with two tours in Iraq,” one ad said. “Now he’s fighting for taxpayers, fighting for our future.” Another slammed Brown, contrasting his performance in 2012 with that of his younger self. “Young Sherrod Brown voted more for Ohio,” it said. “Today’s Sherrod Brown — he just votes the party line. Where did the young Sherrod go?”

The ads stopped short of telling people how to vote, but three nonprofit experts who reviewed them for ProPublica said they all qualified as election ads under IRS rules.

“There’s no question,” said Brian Galle, a Boston College associate professor of law who has written about political activity by nonprofits. “It’s not even close. They’re blatantly political advertisements.”

The Fund now appears to be inactive. Its website is no longer operating. The Fund’s president, Thomas Norris, who signed its tax return, did not respond to requests for comment.

“I think they existed solely to help Josh Mandel,” said Justin Barasky, the Brown campaign’s communications director, this week.

Unraveling what the Government Integrity Fund spent in 2012 wasn’t possible until recently because the group didn’t file its tax return until January of this year, when it was two months overdue. The long wait highlights one of the major problems with regulating dark money groups and their spending: The IRS typically doesn’t look at these groups until a tax return is filed, often more than a year after an election has been decided.

Even with the return in hand, several aspects of its operations remain confusing.

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  • highpckts

    Yep, that’s our Josh Mandel! So proud of this idiot!!

  • Boston You

    Even $17 trillion in debt can’t stop the US government from wasting $1.5 million to study why female homos are obese and male homos are not

    • Lola Johnson

      The term “homo” is offensive, and so are you, Troll.

      • Sand_Cat

        From a moronic bigot like our “friend”? “Homo” is a badge of honor.

        • Boston You

          Homosexual sodomy is a criminal act

          • Sand_Cat

            Every post you bless us with is an act of profound ignorance and bigotry.

      • Boston You

        Homosexual sodomy is a criminal act.

    • Mr Wiseguy

      They should better spend the money on why only morons vote conservative and no one else.

  • disqus_ivSI3ByGmh

    Here is something to think about – If a Republican Candidate served in the military, these conservative PACs praise their patriotism to the Heavens, even if all he did was take photo IDs in the Admin department, or make sure there were enough pairs of socks at boot camp. If a Democratic Candidate served in the military, the same groups decry his patriotism, even if he or she served combat tours, was awarded the Purple Heart and Bronze Star, and needs a prosthetic limb.

    • charleo1

      For Republicans, it’s called getting to know your base. And here’s
      how they did it. The 2002 mid-terms for Republicans was all about
      gaining control of the Senate. At that time, the Senate was a 50-50
      split between Democrats, and Republicans. With Vice President Dick Cheney casting the deciding vote. Republicans calculated their best
      chance to gain advantage was by unseating Georgia Senator, triple
      amputee, Vietnam War Vet, and moderate Democrat, Max Cleland.
      Polls showed the contest between, Cleland, and Saxby Chambliss,
      a hand picked Party insider, with no military background, (bad knee,) too close to call. The GOP decided, on what then might have been
      a risky strategy. Which was to paint this former combat soldier, who’s
      bravery on the field of battle was heretofore unquestioned, as soft
      on terror, soft on defense of the Country. Running disgusting ads
      fading in, and out, between the face of Osama Bil Laden, the Twin
      Towers blazing, and the face of a man who had left both legs, and
      his left hand in the jungles of Southeast Asia, fighting for, and defending his Country. HIs voting record by the way, was supportive
      of the Bush Administration’s war on terror. Often against his own Party, Chambliss of course went on to win his election. Where he
      remains. Deeply entrenched, and voting Party line. And solidly against the best interests of his constituency. (My opinion.) But,
      the Republicans learned something. That the support of the military
      among their core voters was a mile wide, but an inch thick. So they
      had no compunction about going after another highly decorated Vet,
      John Kerry, in the ’04 Presidential Election. A decorated Patriot gets
      his record of service, maligned, and discredited. And, America gets a new lexicon, (Swift Boated.) And the Chicken Hawk, who used his Father’s position, and contacts to safely ride out the dangerous conflict here, gets reelected as Commander and Chief.

  • ps0rjl

    IT’s interesting that all the conservative commentators like to attack the IRS for going after the conservative pacs but the only one that was denied the 501c status was a liberal pac.

  • atc333

    Anyone without a preconceived viewpoint who bothered to watch the House Committee hearings on the IRS “targeting” of conservative groups could come away from those hearings with the distinct feeling that many of these groups are not “social welfare” groups for the good of all,, but only set up to further their political viewpoints and specific candidates. This was blatantly obvious when one spokesperson stated they worked to get their message out to the young, educating them in their true American conservative principals..