“The American Action Network and Sen. Coleman have every right to work to elect more Republicans, but they can’t violate the tax laws to do it,” CREW’s Melanie Sloan said in a statement announcing the complaint. “No one is exempt from following the tax laws. If a group wants to take advantage of privileges like protecting the identity of donors, it has to follow the obligations that go along with that. Here, that would mean spending the majority of resources on activities unrelated to political campaigns. AAN didn’t play by the rules.”

CREW stated that when AAN applied for a nonprofit certificate from the IRS, it stated the primary purpose of its activities would be advocating for economic and national security policies with only a “minor portion” of its activities being political. AAN also told the IRS it only planned to spend $2.5 million in 2010. Instead, it spent $18 million supporting or opposing candidates.

Much of the activity was in the form of advertisements attacking Democrats over health care reform and urging them to vote against health care reform, even though the bill had already passed when the ads were bought and no further votes were pending.

“[T]he timing of the advertisements was not related to any scheduled vote on repealing health care legislation,” the complaint reads. “The House went into recess at the end of September, and no votes were scheduled on H.R.4903 or any other bill repealing the health care law.”

One such advertisement was against Rep. Tim Walz in the amount of $275,000.

The complaint also says that AAN coordinated its campaigns with other Republican groups:

“Just weeks after the IRS granted AAN section 501(c)(4) status, AAN began, at the behest of Karl Rove and former Republican National Committee Chairman Ed Gillespie, coordinating with American Crossroads, Crossroads GPS, the U.S. Chamber of Commerce, and other outside groups seeking to influence the 2010 elections.”

And Coleman’s status as a party leader and his recruitment of high level Republicans also demonstrates AAN’s political nature, CREW told the IRS.

“In fact, most of AAN’s officers and directors are Republican party leaders, fundraisers, former members of Congress, and/or former aides to Republican presidents or congressional leaders,” the complaint said. “These close ties to Republican leaders further support the need for the IRS to conduct an investigation to confirm CREW’s conclusion that AAN’s primary purpose is political activity.”

CREW is asking the IRS to investigate AAN’s 501(c)4 nonprofit status, which allows nonprofits to engage in political activity but only if it constitutes a minor portion of the organization’s activities. CREW stated that a big problem with AAN is the independent expenditures created by the Citizens United Supreme Court decision.

“Citizens United put a for sale sign on every ballot box across the country,” said Sloan. “It is time for Congress to act and put this genie back in the bottle. Elections should be won by the candidates with the best ideas, not by innocuous sounding groups funded by anonymous donors with secret agendas.”

In a letter to the IRS asking for an investigation, Citizens for Responsibility and Ethics in Washington (CREW) says AFF is registered as a 501c4 nonprofit, which means it doesn’t have to disclose its donors so long as engaging in political campaign activity is not its primary purpose. However, the group has spent millions trying to defeat Democratic candidates across the country.

American Future Fund, which is based out of a P.O. Box in Des Moines, spent almost $10 million on political activities in 2010 – $7.3 million on independent expenditures expressly advocating the election or defeat of candidates for federal office, and at least another $2.2 million on electioneering communications – ads that mention a candidate by name close to an election.

“There is nothing wrong with working to elect Republicans, but you can’t violate the law to do it,” said CREW Executive Director Melanie Sloan. “Given the amount of money the American Future Fund spent on ads in the 2010 congressional elections, it seems clear the primary – if not only – goal of the group is to elect Republicans to Congress.”

In October, AFF was accused of violating campaign finance laws in a formal complaint with the Federal Election Commission demanding that it register as a political action committee and disclose its donors.

In December, several groups called on newly elected state Sen. Sandy Greiner (R-Keota) to resign her position as president of AFF, saying it was a conflict of interest for a sitting senator to lead an overtly political group. In a statement to The Iowa Independent, Greiner said she would not resign from AFF, but did step down from the group’s PAC.

“How can an organization that has a sitting Republican legislator as its chief executive claim to be non-partisan?” Sloan said. “It is clear the American Future Fund is a front for wealthy Republicans to anonymously spend millions electing Republicans to Congress.”

In addition to Greiner, the leadership of AFF is made up of numerous prominent Iowa Republicans, most with ties to Gov. Terry Branstad. In fact, Branstad himself served as chairman of American Future Fund’s Lecture Series before re-entering politics. Among those in Branstad’s inner circle with ties to AFF are:

• Bruce Rastetter – ethanol businessman and co-chair of Branstad’s inaugural committee. He was the governor’s largest donor, and provided the seed money to start American Future Fund.
• Nick Ryan – a founder of AFF and founder and president of the Concordia Group LLC (AFF paid Concordia $300,000 in 2008). Ryan was one of Branstad’s biggest financial contributors and is a long-time adviser to Rastetter.
• Sandy Greiner — president of AFF and leader of a political action committee that successfully worked to encourage Branstad to jump back into politics.
• Nicole Schlinger — past president of AFF who led Branstad’s fundraising efforts.
• Tim Albrecht– Branstad’s communication director who previously served in the same position with AFF.
• Kathy Pearson – secretary of The Progress Project and a member of Branstad’s Linn County campaign committee.
• David Kochel – past president of The Progress Project, AFF’s sister organization, and formerly deputy manager of Branstad’s 1994 gubernatorial campaign. He did some consulting for Branstad’s most recent campaign as well.

The group’s leadership also includes media consultants who played key roles in the Swift Boat Veterans for Truth ads in 2004 and the Willie Horton ad in 1988.

U.S. Rep. Michele Bachmann (R-Minn.) topped the list of 11 federal lawmakers and one governor, Barton was second and Johnson fifth. Texas and California were the only states on the list to be represented by a pair of lawmakers. (Read about Bachmann’s selection in our sister publication The Minnesota Independent.)

In addition to Barton’s June 2010 description of a government “shakedown” of BP while oil was still gushing from the Deepwater Horizon platform in the Gulf of Mexico, CREW also highlighted a Dallas Morning News report showing that Barton had made nearly $100,000 in a natural gas deal involving a significant political donor, and while Barton was ranking Republican on the U.S. House Energy and Commerce Committee. Barton later apologized for his apology to BP, but he defends the natural gas deal as a legitimate business transaction.

Barton is set to find out Tuesday whether he will secure a second stint as chair of the House Energy committee, according to the Fort Worth Star-Telegram.

CREW also skewered Barton for actions by his Joe Barton Family Foundation, which solicited donations from corporations for the local Boys and Girls Club in 2005 and 2006 — the problem, according to CREW, was that the foundation asked corporations to donate the money directly to the Boys and Girls Club in the foundation’s name, rather than accepting contributions and then passing them to the charity, thereby avoiding congressional lobbying disclosure requirements.

According to CREW, the Barton Foundation employed similar techniques in 2008 and 2009 regarding donations to Meals on Wheels.

Barton defeated Democratic challenger David Cozad by a margin of 66-31 percent in November.

Meanwhile, Johnson took flak from CREW for awarding dozens of Congressional Black Caucus Foundation scholarships (collectively worth more than $31,000) to family members and a top staffer’s children — first reported by the Morning News.

Despite strict anti-nepotism rules by the CBCF, Johnson awarded scholarships to two grandsons, two great-nephews and children of a congressional aide over five years. After the details were made public, Johnson repaid the scholarship money.

The scholarship controversy goaded D Magazine to dub Johnson “the worst grandmother in America,” and prompted the Morning News to endorse Republican challenger pastor Stephen Broden over Johnson. However, the Morning News later withdrew its endorsement of Broden (who often makes inflammatory statements, including that abortion providers target African Americans) after the pastor said violent overthrow of the government is “on the table” if elections do not produce a change in leadership. (Note: The Morning News endorsed Barton for re-election.)

Johnson ended up winning reelection over Broden by a margin of 76-22 percent.

Barton and Johnson weren’t the only controversy-plagued Texas incumbents who coasted to victory: Other lawmakers who won despite being embroiled in ethics issues include state Rep. Joe Driver (R-Garland) — accused of ‘double-dipping’ for travel expenses from his official and campaign accounts; state Rep. Linda Harper-Brown (R-Irving) — who was driving a brand-new Mercedes owned by her husband’s employer, a TxDOT contractor; and state Rep. Charles “Doc” Anderson (R-Waco) — who was slapped with federal liens for failing to pay $70,000 in back taxes.

Driver said he simply made a mistake. Harper-Brown returned the vehicle and said she didn’t do anything wrong. Anderson said he had been in a dispute with the IRS and had paid all the money.

Barton, Johnson, Driver and Harper-Brown are all legislators from the Dallas-Fort Worth region.

That’s what the group Citizens for Responsibility and Ethics in Washington (CREW) urged today in a letter to Baucus, chairman of the Senate Finance Committee, which CREW notes has the jurisdiction to hold hearings or launch its own independent investigation into such organizations.

The accompanying press release says, “No Need to Punt to the IRS,” and includes the following from the group’s director, Melanie Sloan:

“Senator Baucus has correctly identified the gaping hole in our tax code that allows these faux tax-exempt groups to circumvent the law thanks to the flawed Citizens United decision,” said Melanie Sloan, CREW Executive Director. “Yet, as Chairman of the Finance Committee, Senator Baucus can do something about this. He does not need to punt the matter to the IRS; rather, the Finance Committee can and should immediately begin its own investigation.  The committee has the jurisdiction and authority to subpoena witnesses and documents to get a handle on the extent of the abuse of the tax code and begin working towards a legislative solution.”

The letter submitted by CREW points out numerous instances in which the Senate Finance Committee has launched similar investigations in the past, including a thorough investigation into The Nature Conservancy’s non-cash charitable contributions in 2003. In recent years, the committee has also conducted investigations into groups affiliated with ACORN, the tax-exempt ministries of six televangelists, the Institute for Healthcare Improvement, and others.

Now that Congress is on recess, of course, there’s little chance that anything will happen before the midterm elections. But a slate of hearings during the lame duck session is entirely possible.

The plan, which the lobbyists and watchdog groups have been presenting to Congressional staff members in recent closed-door meetings, would limit the contributions that lawmakers can take from the beneficiaries of earmarks they arrange. Top officials from companies getting earmarks would be limited to donating $5,000 to lawmakers in each two-year election cycle, and they would not be allowed to give at all while seeking an earmark.

In addition, legislative staff working on earmarks would be banned from participating in campaign fund-raising — a practice that drew sharp criticism in a recent investigation by the Office of Congressional Ethics involving earmarks.

And to promote transparency, Congress would be required to disclose all earmarks on a central database, submit to audits by the Government Accountability Office and certify that the contractors are qualified to do the work.

Any coherent system, members of both camps agree, would be better than the current patchwork of partial regulations that Congress has imposed. At present, House Republicans have forsworn the process; House Democrats have banned earmarks for commercial businesses; and the Senate has continued par for the course. The result is that House members have often simply put in requests for earmarks from their respective Senators, while for-profit businesses have often funneled their same requests through affiliated non-profit organizations.

The odd couple that initiated the process was Rich Gold, a lobbyist for Holland & Knight, and Melanie Sloan, who leads Citizens for Responsibility and Ethics in Washington (CREW). The two met over the summer before seeking out partners to join their campaign. They don’t have active backing in Congress yet but the involved groups claim that their unlikely coalition will build momentum by itself:

Mr. Gold said in an interview that Congressional aides have asked incredulously: “Now, who are you doing this with again? And how did this happen?”

He said he already received some criticism from fellow lobbyists. “I’m wearing a flak jacket today” to withstand the attacks, he said, “but to be honest, so are the good government groups from their own supporters. We are strange bedfellows.”

“I’ve never seen a candidate who just stole all their campaign money and used it for personal use,” she told CBS News. “What it seems like here is that Christine O’Donnell had no other way to support herself, so she thought, ‘Okay, I’ll run for U.S. Senate.’”

Sloan and her group are calling on the Delaware attorney’s office to open a formal, criminal investigation into the matter. O’Donnell, thus far, has refused to return calls for comment on the matter and seemed to dismiss such allegations as mere smear tactics during her speech at the Voter Values Summit in Washington this Friday:

“Will they attack us? Yes. Will they smear our background and distort our record? Undoubtedly. Will they lie about us, harass our families, name call and try to intimidate us? They will. There’s nothing safe about it. But is it worth it?….Are those unalienable rights worth a little alienation from the beltway popular crowd. Yes! I say yes, yes, a thousand times yes,” she said.

So far, GOP leaders are attempting to stay mum on the issue. Having gotten a lot of mileage out of decrying the ethics cases surrounding Reps. Charlie Rangel (D-N.Y.) and Maxine Waters (D-Calif.), repeatedly accusing Pelosi of not actually “draining the swamp” in Washington as she had promised, Republicans are attempting to avoid headlines that they would seek to loosen up ethics scrutiny in Washington should they take power:

Boehner’s spokesman tried to change the topic when asked whether his boss would keep the OCE if Boehner has the Speaker’s gavel in 2011.

“We are listening to the American people, who are focused on jobs and spending,” said Michael Steel. “This sort of hypothetical hasn’t come up.”

Minority Whip Eric Cantor’s (R-Va.) spokesman responded similarly.

“Eric is focused on cutting spending and bringing an end to the cloud of uncertainty that continues to hang over job creators, families, and investors so that people can get back to work,” said Brad Dayspring.

While Boehner and Cantor won’t say anything for certain at present, they both opposed the OCE’s creation and tried to block the measure in March of 2008. The bill passed by a single vote (207-206), and requires reauthorization at the beginning of each congress. Many House Democrats, as well, are hardly pleased with the new office, especially members who faced a recent investigation into their conduct on the eve of the financial reform vote in December, as well as members of the Congressional Black Caucus (CBC):

CBC members have introduced legislation that would curtail the powers of the OCE, but those proposed modifications were swiftly lambasted by watchdog groups, including Democracy 21 and the Citizens for Responsibility and Ethics (CREW) in Washington.

Republicans and Democrats in recent weeks have openly ripped the OCE’s investigative tactics amid an investigation into the fundraising activities of a bipartisan group of eight members during the Wall Street reform debate.

Last week, the OCE recommended that the House ethics committee further review Reps. John Campbell (R-Calif.), Joe Crowley (D-N.Y.) and Tom Price (R-Ga.) for fundraisers they held in the days leading up to the House financial reform vote last December. The OCE recommended dismissal of the probes against the five other members.

An ethics office that has roused the ire of both parties would appear to be living up faithfully to its independent watchdog mission. Unfortunately, it serves at the pleasure of the Congress it is tasked with investigating, putting it in a perilous spot come the beginning of the next session.

In response, CREW’s Director Melanie Sloan released the following statement:

“Senator Ensign had an extended affair with a campaign staffer, who happened to be married to his chief of staff Doug Hampton, fired them both, and had his parents pay them off without properly reporting it to the Federal Election Commission. He then conspired to help Mr. Hampton to set up a lobbying business to lobby his own office, in violation of federal law. So what exactly are the things that Senator Ensign is being accused of that he did not do?”

There’s not much more to add to that.

Sloan doesn’t exactly give an answer in her op-ed, but she hints that politics might have something to do with it:

With control of the House likely up for grabs, some — including Rangel — have said that Republicans on the ethics committee have refused to reach a settlement with Rangel specifically because of a desire to focus national attention on Democrats’ ethics problems and to gain an edge in the election. [...]

Intentional or not, releasing charges against Rangel and Waters so close to the midterms lends credence to those who assert that the charges are political. The timing undermines the ethics committee’s already weak credibility and jeopardizes the legitimacy of the ethics process. As a result, we may see members reluctant to buy in to a process they view as a politically motivated. Already, we have heard members of both parties call for the OCE to be dismantled, or at least to have its (limited) power severely reduced.

The investigation was dropped after Deal decided to leave office, but the scandal earned him a place on Citizens for Responsibility and Ethics in Washington’s “Most Corrupt” list:

Rep. Deal, along with his business partner Ken Cronan, owns a lucrative business, Recovery Services, Inc., that – through a no-bid contract – provides inspection stations to the state for the inspection of salvaged vehicles. The business earned $1.4 million between 2004-2008 and Rep. Deal personally took home $150,000 a year.

In 2008, Georgia Revenue Commissioner Bart Graham took over responsibility for the inspection system and found the operational costs and locations of the inspection stations to be too costly and restrictive. Comm. Graham decided the best course of action was to reform the system and award contracts through a competitive bidding process.

Rep. Deal and his staff, with assistance from Georgia Lieutenant Governor Casey Cagle, arranged meetings with Comm. Graham at which Rep. Deal and his chief of staff were present, to persuade him to reconsider his decisions, including the proposed elimination of $1.7 million that has been allocated for the program. After Comm. Graham’s plan was passed by the Georgia House, Rep. Deal’s chief of staff used his House email to contact Georgia state officials in an effort to stop the plan from passing the state Senate. The money for the program was eventually kept in the budget.

Rep. Deal’s abuse of his position and taxpayer resources to maintain a personally lucrative business deal does not reflect creditably on the House.

Considering his checkered past, Deal’s victory over a crowded GOP primary field in Georgia has surprised a number of pundits in the Peach State. He’s not exactly a model candidate in a year where one of the most popular electoral strategies is to rail against Washington’s culture of corruption and back scratching and all that.