October 1, 2005

EdWatch and Sen. Michele Bachmann: Violation of IRS Tax laws

Bachmann and EdWatch Violate Tax Laws
Notorious anti-gay state senator, and current Repubican candidate for the 6th Congressional Distict may be involved in a situation involving a tax violation by the anti-gay non-profit, EdWatch. This is a long post, but also a good read for people who want to understand the law, and how EdWatch and Michele Bachmann's (also a tax attorney) campaign violated Internal Revenue Service laws, and probably violated Federal Elections Commission laws. In addition, I've documented several other possible violations of tax law on EdWatch's website involving both implicit and explicit endorsement. Also, at the end, I'll go into the anti-gay advocacy of EdWatch.

The Violation
According to DumpBachmann, whose readers discovered a fundraising letter "prepared and paid for by Bachmann for Congress Committee" that was written by the President of Edwatch, Renee Doyle, was sent out soliciting donations for the Bachmann campaign. At the bottom of the first page of the letter, it lists EdWatch's contact info, and on the second page it lists Bachmann for Congress Committee contact info. Doyle specifically references her position as President of EdWatch numerous times as well as points to Bachmann's work with EdWatch. Electronic copies of the letter are here.

Directors, presidents, board members, in fact anyone at a nonprofit who wants to engage in campaign work or partisan work is allowed to do so. That's a Constitutional right. However, 501(c)3 nonprofits themselves cannot endorse candidates or engage in partisan activities as a condition of their tax-exempt status, and individuals acting on behalf of their 501(c)3 also cannot endorse candidates or engage in partisan activity. Renee Doyle clearly linked EdWatch to Bachmann in a solicitation letter paid for by the Bachmann campaign.

EdWatch describes itself as a 510(c)3 and that is public information.

"The work of EdWatch continues only with the financial generosity of people like you, who are committed to the principles of intellectual and educational freedom. EdWatch is a 501(c)(3) non-profit educational organization. Cash contributions to EdWatch are tax-deductible as provided under the IRS Code.'" [Link]

The Law
The IRS looks at the 'facts and circumstances' around certain violations. Sometimes the law can be ambiguous. That is not the case with EdWatch. Here is a document from the IRS describing just this situation, and what is a violation of the law (It's a PDF. Quote is from page 30):

"E. Attribution of the Acts of Individuals to IRC 501(c)(3) Organizations. The prohibition on political campaign activity applies only to IRC 501(c)(3) organizations, not to the activities of individuals in their private capacity. The prohibition against political campaign activity does not prevent an organization's officials from being involved in a political campaign, so long as those officials do not in any way utilize the organization's financial resources, facilities, or personnel, and clearly and unambiguously indicate that the actions taken or the statements made are those of the individuals and not of the organization. ....An IRC 501(c)(3) organization acts through individuals such as its officers, directors and trustees. The officers, directors, or trustees of the organization are the ones who make the decisions for the organization and communicate those decisions to others. Officials acting in their individual capacity may be identified as officials of the organization so long as they make it clear that they are acting in their individual capacity, that they are not acting on behalf of the organization, and that their association with the organization is given for identification purposes only. If it is not made clear that the official's association with the organization is given only for purposes of identification, the individual's acts may be attributed to the IRC 501(c)(3) organization since the organization typically acts through its officials. Actions and communications by the officials of the organization that are of the same character and method as authorized acts and communications of the organization will be attributed to the organization. Therefore, when an official of an IRC 501(c)(3) organization endorses a candidate somewhere other than in the organization's publications or at its official functions, and the organization is mentioned, it should be made clear that such endorsement is being made by the individual in his or her private capacity and not on the organization's behalf. The following language would serve as a sufficient disclaimer: "Organization shown for identification purposes only; no endorsement by the organization is implied." However, as stated earlier, if the endorsement occurs in the organization's publication or at its official function, such a disclaimer is insufficient to avoid attribution of the endorsement to the organization."

This part of the IRS code is pretty unambiguous. If you endorse someone, and you use your official capacity as the head of a tax-exempt nonprofit, you better be damn sure that the audience knows that you are not speaking on behalf of the organization. In this case, Doyle is using the organization as a tool to gain support and funds for Bachmann. This is a clear violation.

Will their be excuses for breaking the law? Tax laws are long, ambiguous, legalistic, and often difficult to understand. Fortunately for Minnesota nonprofits, the Minnesota Council of Nonprofits provides ample opportunities to learn what a nonprofit, and its employees can and can't do. Also, the president of a nonprofit should be well aware of the IRS and FEC laws governing a 501(c)3 organization. Additionally, a candidate for the US House of Representatives who lists her occupation as a TAX ATTORNEY should be well aware of these laws.

Other Possible Violations

Browsing the EdWatch website for Bachmann references turns up over 60 pages. And there certainly seems to be a bit of a love-fest for Bachmann occurring there. Here are a few examples that are very close to being in violation, if they aren't in fact violations.

"On Monday, Sen. Michele Bachmann officially announced her campaign for the 2006 race for Minnesota's 6th District Congress, a seat that will be vacated by Cong. Mark Kennedy. Kennedy has announced his 2006 run for Mark Dayton's U.S. Senate seat. The Bachmann race brings No Child Left Behind into the election arena. Bachmann authored legislation to remove Minnesota from the massive federal education law. Bachmann also authored the 2004 legislation for a Minnesota constitutional amendment to define marriage between one man and one woman. Bachmann was a tireless opponent of the Profile of Learning since 1998, when most legislators were lining up to support it. Known for her articulate and populist opposition to the federal education system, Bachmann launched her remarkable political career by speaking out against the Profile of Learning and School-to-Work. Finally, as a Minnesota Senator, she saw the Profile repealed in 2003." [Link]

"EdWatch is coming forward for a Senator who has been there to support parents and taxpayers on education long before it was popular to oppose the Profile. She continues to provide clear, strong leadership in education at the Capitol." [Link]

This page links to Michele Bachmann's campaign website.

And, ironically, the EdWatch Political Action Campaign, EdAction, has this press release titled, "Bachmann calls for end to Illegal Campaigning." Seriously, I do not make this stuff up. (And I'll be looking into EdAction next to see if there are any violations there over the next few days.)

Take Action
If you received a letter from Bachmann and EdWatch, you should visit DumpBachmann and follow the steps to file a complaint.

Anti-Gay EdWatch
Surely, each year many nonprofits are guilty of this type of violation to one degree or another. But, no responsible nonprofit would actually commit such a slam-dunk violation. Unfortunately, most citizens don't pay much attention to nonprofit partisan activity. I DO pay attention to organizations that misrepresent GLBT people and outright lie about our lives and our community. This organization creates a fear of GLBT people in order to push their agenda. Here's an example of those statements made by EdWatch:

"In schools all across Minnesota and this nation, we are seeing a very aggressive plan by gay activist organizations that are boldly taking their agenda into our schools. They are undermining parental authority and putting our children at risk of sexual confusion and sexual diseases by affirming them in lifestyles that are unhealthy and dangerous...Today we are in a cultural war over two views of sexuality: our Judeo-Christian sexual ethic of monogamous heterosexual marriage and the 'gay' ethic of sexual license. The battleground is the classroom and it is the children who will be the greatest casualties if we do not respond." [Link]

It's these kind of misrepresentations, and fear-mongering that led me to research this issue so thoroughly. If breaking tax laws isn't enough to make you mistrust these people, perhaps that will.

Posted by Andy at October 1, 2005 8:22 PM


Excellent post, Andy - and thanks for your followup on tax law related to the DB expose of the Edwatch fundraising letter for Bachmann.

Great post, Andy. Having worked at a large non-profit for several years, I can tell you we were VERY careful not to come anywhere near the lines of appropriate conduct in the political realm. You're right that the responsible ones would never be caught in this kind of dilema.
Thanks for the investigation into this.

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