Norm Coleman’s American Action Network accused of violating tax status
Citizens for Ethics in Washington filed an IRS complaint against former Sen. Norm Coleman’s American Action Network Tuesday alleging that the group violated its 501(c)4 status by working to elect Republicans. CREW posits that AAN used its tax status to protect Republican donors from disclosure and spent the majority of its resources on political campaigns instead of educational activities, as required under the law.
“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.”