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Dark Money Group Spent on House Race, Then Told IRS It Didn’t

A Better America Now had spent money on mailers linking a congressional candidate to “left-wing extremists” and a controversy involving an endangered spider.

A spider of the Cicurina genus delayed a large highway project in Texas. (Photo courtesy of Texas Department of Transportation)

Shortly before Election Day last year, mailers went out to Texas voters featuring pictures of a Democratic congressional candidate and a rare species of spider, whose discovery had forced stoppage of an important highway construction project.

“The same left-wing extremists who support Pete Gallego want more burdensome regulations that put the interests of spiders above our need to create more jobs,” the flier declared, referring to discovery of the endangered Braken Bat Cave meshweaver. “The best way to stop left-wing extremists from killing jobs is to vote against their hand-picked candidate Pete Gallego.”

The group that put out the mailer, A Better America Now, reported to the Federal Election Commission it had spent about $65,000 for the mailer and TV advertising in the hard-fought race to represent Texas’ 23rd district.

But in a tax return recently filed with the IRS, the group claimed it did not spend any money at all on “direct or indirect political campaign activities.”

The tax return is signed under the penalty of perjury by the group’s president, Bob Portrie, and the accounting firm LBA Group. Neither responded to requests for comment.

We first reported on A Better America Now earlier this year, showing it had told the IRS in a 2011 application for nonprofit status that it did not plan to spend any money on elections. (That document was sent to ProPublica last year by the IRS, even though the application was still pending and thus not supposed to be released.)

(San Antonio Express-News/Vianna Davila)“This type of inaccurate reporting by electioneering nonprofit groups has a long history,” says Public Citizen’s Craig Holman, when asked about the group’s most recent filing. “It is rooted in the fact that the IRS almost never holds these groups accountable for such false declarations.”

A Better America Now was a bit player in the elections. But it’s also an example of the kind of increasingly common outside groups that inject anonymous money into political campaigns.

Such social welfare nonprofits are not supposed to have political campaign activity as their primary purpose — but the ambiguities around how the IRS measures such activity and how it screens the groups are at the center of the recent investigations of the IRS’s treatment of Tea Party groups.

ProPublica has documented how nonprofits that spent millions of dollars on ads in the 2010 elections failed to report or underreported that political spending to the IRS. The tax form that the groups are required to file with the IRS specifically asks for details on any campaign spending.

One of the curious things about A Better America Now is that, though the group spent money in a congressional and a state legislative race in southwest Texas, it is based a few miles off the beach near Jacksonville, Florida

The president of A Better America Now, Portrie, is also the head of a consulting firm, the Fenwick Group. The two groups are listed at the same address. Fenwick’s website says it works with “organizations across the healthcare, financial services, insurance, retail and investment sectors.”

Portrie and Fenwick were also linked to ads run by another Florida-based social welfare nonprofit, America is Not Stupid, in last year’s U.S. Senate race in Montana. Ads by America is Not Stupid featured a talking baby complaining about alleged cuts to Medicare by President Obama, and referring to the baby’s stinking diaper.

In 2010, the New York Times reported on links between the Fenwick Group and yet another politically active nonprofit, the Coalition to Protect Seniors. Ads by that group featured the same talking baby ad.

In last year’s race in Texas, which attracted a lot of outside spending on both sides, the Democrat, Gallego, prevailed over Republican incumbent Quico Canseco.

Link to the tax returns doesn’t work.

@jw should be fixed now—thanks for flagging

Thank goodness Obama found out about the biased (but not really, apparently, which the conservatives are now angrier over essentially the focus from the media, whereas the IRS also double-checked liberal organizations…and open source advocates—Linux types wear beards and so do Muslims…hmm…) investigations and pledged to put an end to them!

They really need to vet every single non-profit.  These are people whose operations we subsidize.  Some of them are pocketing the money, as in the charities that have been making the rounds in the news.  Some are trying to manipulate voters after stating under penalty of perjury that they wouldn’t.

But hey, then maybe someone would notice that Congress keeps passing laws that make it easier for companies to dodge out of paying taxes and complaining that nobody pays taxes, like it’s some mystery.  That wouldn’t do at all.

The IRS is a corrupt bureaucracy that should hundreds of radical employees jailed.

Corrupt, radical groups like move on . borg and g. soros should be purged from our society.

This may not contribute to the conversation on dark money in political races, but does anyone else find the name of that last “nonprofit” hilarious? “America is Not Stupid?” It’s a good thing for these groups that the IRS so blatantly neglects following up on the requirements for receiving the status of social welfare non profit. Something tells me most of these folks would not do too well at covering their tracks.

Secret undeclared donations weren’t called “dark money” until conservatives started doing it.  I look forward to PP’s expose on George Soros and Herb Sandler.  ProPublica doth protest too much, methinks.

Kelly Pomeroy

July 1, 2013, 3:37 p.m.

When you say “but the ambiguities around how the IRS measures such activity and how it screens the groups are at the center of the recent investigations of the IRS’s treatment of Tea Party groups”, you are perpetuating what I’m given to understand is the false claim that the IRS targeted conservative groups, but not liberal ones.  If this is the case, I’m disappointed in your journalistic carelessness.

BS7SDEN- moveon.org does not have tax exempt status. They pay taxes on donations and did not lie to the IRS like the groups mentioned in the article. Just what should they be investigated for, telling the truth?

Kelly Pomeroy

July 1, 2013, 4:32 p.m.

The biggest thing that’s being overlooked in all this discussion is that the IRS has NEVER been even-handed in doing its job.  Just as many corporations have grown “too big to fail”, I think the IRS often finds them to big and powerful to audit and crack down on…so they go after the little guys instead.

Darrell Issa will probably investigate why it was not alright to them lie and why the press is har-issa-ing them.

Dominick F. Sammarone

July 1, 2013, 8:19 p.m.

There is a better way to collect tax… Fairtax
It’s a tax on spending-Not a tax on income
Theres a bill on the table-check it out! https://www.cosponsor.gov/all

As any large organization does, the IRS has people with a wide range of competence.  However, CONGRESS writes the tax laws, not the IRS, but the latter has to implement them, even when the rules are vague, confusing or layered with exceptions and odd special cases, and changes.

https://en.wikipedia.org/wiki/501(c)_organization
http://www.law.cornell.edu/uscode/text/26/501  501(c) law

http://www.irs.gov/publications/p557  501(c) explanations by IRS

To be fair, Kelly, a person would have had to pay very close attention to spot the story that liberal and open source groups were also on the list.  I dismissed the first story about the audit showing evenness, and the more solid revelation a couple of weeks later barely registered.

I only caught it because software news people picked up the story on the open source side, myself.

Dominick, “fair taxes” go right after the poor while removing burdens from the rich.  The entire definition of being rich is having more money coming in than is spent.

The rich should have more of a motivation to keep the markets afloat (and thus want laws enforced by the government) and greater disposable means to make it happen.  Why anybody would target consumption is beyond me.  It’s not like Bill Gates buys thousands of times more Cheerios than retirees on Social Security.

Dominick F. Sammarone

July 2, 2013, 10:46 a.m.

lol,
the poor and the seniors get a prebate. Fairtax covers that.
You should read up on the bill first. 
fairfax.org

Fairtax?

So what sleazebag gangster are you working for?  Grover Norquist, maybe?

Sorry, this scam doesn’t even pass the smell test, let alone close scrutiny.

Go peddle this trash somewhere else.  People with brainwaves aren’t interested…

Kelly Pomeroy

July 2, 2013, 12:20 p.m.

There has been a lot of talk - going back to John Maynard Keynes himself - about putting a very small tax on financial transactions.  This has several virtues.  It would not require rebates to the poor and seniors, it would help to rein in the kind of speculation that crashed the economy, and it would put the burden of recovery on those who caused our current crisis.  We could also stop all the perennial taxpayer subsidies to big corporations, put a heavy tax on obscene payments and perks to CEOs (regardless of their actual worth), reinstate regulations that will prevent future financial implosions that lead to bailouts and/or severe loss of jobs and benefits, and close a lot of the loopholes that have allowed the very richest people to suck up an increasing percentage of the wealth at the expense of everyone else, turning us into a Third World country.

Still looking for the expose on Organizing for America.  Of course the amount they spend on political advertising couldn’t be close to $65,000!  And of course while progressive groups were targeted, there is no evidence that any targeting did anything but speed up their applications.

Dominick F. Sammarone

July 21, 2013, 6:40 p.m.

FAIRTAX!

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