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Congress Investigating Nonprofits' Partisan Election Activities

Democrat Super Pac calls 501(c)3s the most effective tactic



KRISTINE CHRISTLIEB, MFE writer | AUG 17, 2023 Editor’s Note: Trust But Verify (TBV) has been up and running for just over 60 days, reporting exclusively on non-profit organizations. Of the nine feature articles published, four of them have involved non-profit organizations’ involvement in U.S. elections. That was not by design, it was simply where the tips led. And now, Congress is seeing a similar pattern.

The U.S. House Committee on Ways and Means that oversees tax policy, including tax-exempt organizations, is planning to investigate both partisan activities among 501(c)3 organizations as well as foreign money passing through 501(c)3 and 501(c)4 organizations to influence elections.

In an official “Request for Information” directed to their House colleagues on Monday, U.S. Representative Jason Smith (R-MO), chairman of the Committee on Ways and Means and Representative David Schweikert (R-AZ), chairman of the Subcommittee on Oversight Committee on Ways and Means, pointed out from the Internal Revenue Code: “501(c)3 organizations are strictly prohibited from participating in or intervening in any political campaign on behalf of or in opposition to any candidate for public office.”

These 501(c)3 organizations are allowed to undertake nonpartisan activities related to elections such as voter registration and get-out-the-vote campaigns. But they must be executed in a nonpartisan manner, e.g., they can’t target certain neighborhoods or demographics.

Even more confusing are regulations related to 501(c)4 organizations — civic leagues or organizations that operate “exclusively for the promotion of social welfare.” Smith and Schweikert are receiving reports that “some 501(c)4 organizations have taken advantage of the vague major purpose and primary purpose criteria to avoid registering as political committees which have donor disclosure requirements.”

As it stands, foreign individuals can anonymously contribute millions of dollars to a 501(c)4 which then distributes the funds to 501(c)3 organizations engaged in illegal partisan activities.

According to Smith and Schweikert’s RFI, Democrat Super PAC Mind the Gap told its donors that “the single most effective tactic for ensuring Democratic victories — 501(c)3 voter registration focused on underrepresented groups in the electorate.”

As Trust But Verify reported in a two-part series (here and here) on how Michigan politics has in recent years been overwhelmed by outside Democrat dollars, the strategy of politically weaponizing nonprofits was launched first in Colorado (see The Blueprint).

With regard to foreign dollars, TBV included a headline brief last week on the concerning activities of Swiss billionaire Harsjorg Wyss who is, according to a report from Americans for Public Trust, using American nonprofits to influence elections.

This week, Trust But Verify revealed the nonprofit Pew Charitable Trusts’ left-leaning Election Initiative’s former staff are now partnering with Microsoft and the Council on State Governments, yet another giant nonprofit, to create a comprehensive election management system.

Watch for future coverage on the Ways and Means Committee’s investigation.


Kristine Christlieb serves on MFE's Communications Team and is founder of Trust but Verify.


Related:

Rep. Claudia Tenney says Ways and Means panel to investigate whether tax law broken or foreign money being used to funnel cash into elections.




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