Citizens for Responsibility and Ethics in Washington filed IRS complaints against 10 “social welfare” groups for violating their non-profit status by acting as political organizations or for significantly underreporting their political activity. CREW also filed criminal complaints with the Department of Justice against six of the organizations, calling on the FBI and DOJ to investigate whether they lied to the IRS about their political activity.
501(c)(4) social welfare groups are allowed to make political expenditures as long as political activity is not the primary focus of the group and they disclose all political spending to the IRS. These groups failed to meet those simple standards.
“The disastrous Citizens United decision opened up the floodgates for dark money groups to spend on politics,” CREW Executive Director Noah Bookbinder said. “But there are still some limits to the amount of spending and secrecy these groups are permitted—and too many brazenly ignore these modest limits.”
American Dream Initiative (based in Virginia but active in Texas), the DC based Arizona Future Fund, Jobs and Progress Fund (organized in Ohio but spending in Georgia), Michigan Citizens for Fiscal Responsibility, Ohio’s Mid America Fund (which spent in Rhode Island and Illinois) and the Rule of Law Project (organized in Virginia but active in Wisconsin) all spent hundreds of thousands of dollars on politics in the 2014 election that they hid from the IRS, leading to CREW’s criminal and IRS complaints. Ohio’s Freedom Vote and Moving Ohio Forward, Oklahomans for a Conservative Future and the Iowa based but Nebraska and Arizona spending Legacy Foundation Action Fund all impermissibly spent more than 60% of their spending on political activity—as did many of the groups included in the criminal complaint, leading to today’s IRS complaints.
“These groups have demonstrated a clear disregard for the law,” Bookbinder said. “If the government does not act, it will send a signal to dark money groups that no laws or limits apply to them and it is open season for secret money in our elections.”