No Tax Returns for You, Dark Money Groups Say
Some politically oriented social-welfare nonprofits dodged ProPublica’s requests for IRS filings or refused to provide them as required
It was mid-July and I had come to Hilltop Public Solutions because Jessie Bradley, a partner with the consulting firm, appeared to run two social-welfare nonprofits out of its Washington, D.C., office.
ProPublica was preparing a story about how such groups – also known as 501(c)(4)s for their section of the tax code – were pouring money into elections. The nonprofits run by Bradley, Economy Forward and the Citizens for Strength and Security Action Fund, or CSS Action Fund, had spent more than $3 million supporting Democrats in 2010, records showed.
I wanted the groups’ tax returns and the applications they had submitted to get IRS recognition of their tax-exempt status. The law requires 501(c)(4)s to make these forms available for inspection immediately if someone requests them in person or to provide them by mail within 30 days.
When I reached the office suite listed as Hilltop’s headquarters, however, it turned out to be a law firm.
The firm’s receptionist said Hilltop was located in an inaccessible area of the building and called Bradley to convey my request.
Bradley said she was busy.
The receptionist asked if I could meet with someone else. “She hung up on me,” the secretary said, putting down the phone.
Bradley wasn’t the only one who refused to provide ProPublica with these crucial records, in which social-welfare groups set down, under penalty of perjury, their revenue, spending and involvement with political activities.
Eighteen of 106 social-welfare nonprofits that we identified as having spent money on elections in 2010 would not provide us with these documents, despite repeated requests and reminders that they were legally obligated to do so.
Some groups promised to provide the records, but never did. Others wouldn’t even tell us their addresses, so we couldn’t ask for them in person. (ProPublica got the tax returns from CSS Action Fund and Economy Forward from the IRS. Available records show they never applied to the agency to be recognized as tax-exempt.)
Several groups offered reasons why they couldn’t gather the documents, at least not right away: A death in the family. A wife with cancer.
“It’s the middle of August,” said Neil Corkery of The Annual Fund. “Everyone’s on vacation.”
Corkery later had the group’s tax return sent to ProPublica, but it was missing a breakdown of the group’s $2.7 million in grants, some of which went to other social-welfare nonprofits heavily involved in politics. Corkery never responded to a request for The Annual Fund’s application for recognition, or to questions about whether the group filed one. Though listed as the person keeping the group’s records on its tax return, Corkery said he was no longer really involved with The Annual Fund.
Thorney Lieberman of the West Virginia Conservative Foundation said he couldn’t provide records for the group right away because he was out of town.
“If it’s a public record, then shouldn’t it be available online?” he asked.
Sure—if the nonprofit or Guidestar, which tracks charities, puts it there. Guidestar had a copy of the West Virginia Conservative Foundation’s tax return but not its application for recognition. Regardless, the group is required to provide documents when requested.
Lieberman asked me to send an email requesting the records. He never responded. Or supplied the address of the West Virginia Conservative Foundation, which reported spending more than $630,000 on political ads in 2010 to the Federal Election Commission. (That’s 97 percent of the group’s expenditures in 2010, according to its tax return.)
The Foundation for a Secure and Prosperous America—which spent more than $111,000 on ads in 2010—also didn’t respond to a request for its application for IRS recognition. Lawyer Scott Thomas, a former FEC chairman who is now with Dickstein Shapiro LLP in Washington D.C., said the associate that advised the group on the filing had just left the firm. Thomas said he couldn’t find a copy of the group’s application.
“I’ve explained the obligation to make a copy available if requested,” Thomas wrote in an email. Neither he nor the group responded to a follow-up email.
Chris Carmouche of GrassTops USA said in mid-May that he was out of the country but would be willing to “talk about” ProPublica’s request for records when he returned later in the month.
But Carmouche never called or responded to a note left at his front door. The IRS couldn’t locate 2009 or 2010 tax returns for GrassTops, which says in daily emails that its mission is to “wage web warfare against the liberal establishment.”
The IRS says that citizens who are rejected from seeing tax returns or applications should write to complain about the offending nonprofit, which can be fined $20 a day, up to $10,000 maximum, as long as the failure continues.
And we’re considering it.
But despite all the rejection, ProPublica has a message for the groups that have not yet supplied us with tax returns and applications for recognition: You have one more chance. Feel free to send them along.
ProPublica is following the money and exploring campaign issues in the 2012 election you won't read about elsewhere.