I am yucky!
has a very disturbing (though not particularly surprising) piece about how the National Rifle Association uses its financial contributions from ordinary people. Mr. Berlow began donating small amounts (single dollars "here and there"), and then tracked where that money ended up.
Some of it quickly found its way into the account of the National Rifle Association Political Victory Fund, the NRA’s political action committee. And that was of no small interest, because I never knowingly contributed to the NRA-PVF. [...]
The issue is not just that my donations ended up in a political fund account, but the way the NRA solicited them — and presumably those of thousands of others. In fact, each of these transactions almost certainly violated multiple provisions of the Federal Election Campaign Act (FECA) and a legion of state and federal antifraud statutes designed to protect the public from phony charities and false or misleading solicitations.
FECA laws include an entire section about how one can solicit contributions for campaigns—and it includes telling the people you are asking for money that you are using it
for elections et al.
This law is to protect people from being involved in politics they have no interest in. We all may like an organization for the work they do (even the NRA); but not all of us are interested in certain candidates. We may even dislike a candidate an organization we support has decided to back. Also, the NRA spends a lot of money on elections—and continues to spend
more and more.
2014 PAC Summary Data
Total Receipts: $21,905,192
Total Spent: $20,785,386
Begin Cash on Hand: $1,369,033
End Cash on Hand: $2,488,839
Debts: $0
Independent Expenditures: $15,537,565
Date of last report: December 31, 2014
The above numbers are just contributions. There are the working fees that bring those totals
up another $15 million.
“There are at least three clear violations” of federal law, says Brett Kappel, an expert on political law and campaign finance at the law firm Akerman LLP. “First of all, they can’t be soliciting from the general public at their website. Then there’s the fact that the money is not being solicited in the name of the PAC; they have to say it’s for the PAC and what the political purpose of the PAC is. And then there are multiple missing disclaimers such as the disclaimer saying that contributions have to be voluntary.”
Maybe the NRA thought the phrase "cold dead hand" counts for the "contributions have to be voluntary" disclaimer? Who knows. Mr. Berlow proceeds to break down how the NRA may have also violated tax law.
In addition to violations of the Federal Election Campaign Act, the NRA’s accounting of its corporate political expenditures may have run afoul of federal tax laws, because the powerful lobbying organization apparently failed to report tens of millions of dollars in political expenditures made in connection with federal election campaigns. The Internal Revenue Service has special reporting requirements for tax-exempt corporations like the NRA, which is classified as a “social welfare organization,” or a 501(c)(4) corporation in IRS nomenclature. Unlike tax-exempt charities such as the Red Cross or the United Way, which may engage in only very limited political activities, “social welfare” organizations are given broader latitude to spend money on politics, so long as their “primary purpose” is not political. A social welfare organization can, for example, send out communications urging its members to vote for particular candidates, and it can buy political ads that favor or oppose candidates. It can set up a political action committee, as the NRA did with its Political Victory Fund, and it can pay for a PAC’s salaries, office space and other expenses. Most important, the Internal Revenue Code allows these tax-exempt corporations to raise funds for their PACs.
In return for this broader authority to engage in politics, the IRS insists that tax-exempt groups like the NRA report all their corporate political expenditures.
Amazing. Maybe you think, well, this is how everybody's been doing it since
Citizens United. Actually, no. Not at all. Even the
Koch-driven Americans for Prosperity paid
their taxes.
Nevertheless, among the top 25 political nonprofit groups spending money in federal elections in 2012, only the NRA failed to report any of its political expenditures to the IRS. The other politically active nonprofits all acknowledged when they were involved in direct or indirect political activity, filed the required IRS reporting schedule with their tax return, declared how much they spent to support or oppose candidates, and paid any tax owed. Although several reported huge expenditures — $71 million for Crossroads GPS, $36 million for the Chamber of Commerce and $37 million for Americans for Prosperity — none had anywhere near the investment income reported by the NRA, or a substantial tax liability. Based on the NRA’s reports, it appears it would have owed more than $600,000. Put another way, none of the other groups had as much to lose by filing the returns required by law as did the NRA.
The entire Alan Berlow piece is
really worth a read. The inference is that this may just be the tip of the iceberg for the NRA's dubious dealings in campaign finance. He's just uncovering their violations online. The NRA gets most of its money via direct mail. Who knows where that money is actually going.
