Below is an article by Peter H. Stone for the Center for Public Integrity’s iWatch News.
According to Democracy 21 President Fred Wertheimer:
This article indicates that Make Us Great Again, the candidate Super PAC supporting Governor Perry, is involved in creating a 501(c)(4) organization, Citizens for a Greater America, that will accept and spend secret contributions to support Perry’s presidential campaign.
The abuse of the tax laws to hide campaign donors continues full speed ahead.
This article is yet another indicator of why it is essential to get the IRS to take action against campaign groups posing as “social welfare” organizations in order to get tax exempt status and be able to launder undisclosed contributions into federal elections.
Getting the IRS to move on this problem is the goal of the letter sent earlier this week to the IRS by Democracy 21 and the Campaign Legal Center, and the previous IRS letter and petition sent by the groups.
The Center for Public Integrity-iWatch News
Allies of Rick Perry form group that accepts unlimited, undisclosed donations
By Peter H. Stone
September 28, 2011
Citizens for a Greater America, a group newly launched by allies of GOP presidential candidate Rick Perry, has organized under IRS rules as a 501(c)(4) permitting donors to give unlimited contributions and remain secret.
The mission of the new group is officially to “promote conservative leadership and values and to educate the public and policy makers about conservative issues and principles,” according to a fact sheet obtained by iWatch News from a Perry fundraiser.
The fundraiser, who also has been raising money for the Super PAC backing Perry, Make Us Great Again, said he received the fact sheet from Mike Toomey, a founder of the PAC. The fundraiser was seeking information about whether Make Us Great Again had a 501(c)(4) arm for people who wanted to remain anonymous.
Such secretive donations to help federal candidates have mushroomed since the January 2010 Supreme Court ruling that gutted campaign finance restrictions.
Toomey, a high-powered Austin lobbyist who used to be Perry’s chief of staff, in July co-founded Make Us Great Again, which also can accept unlimited donations but has to disclose its donors names publicly.
The new 501(c)(4) tax exempt group is in addition to at least five Super PACs backing Perry that can accept unlimited checks. But Citizens for a Greater America is the first of Perry’s many money pockets that doesn’t have to reveal its donors.
All of these groups are legally required to operate separately from the Perry campaign. Of course, individual donors are also allowed to give $2,500 per election to Perry and other presidential candidates, and to “bundle” contributions from friends and colleagues on a candidate’s behalf.
Citizens for a Greater America is located in Athens, Ga., at the same address where Paul Kilgore, the treasurer of the Super PAC Make Us Great Again, is based, according to the fact sheet.
Reached by phone, Kilgore told IWatch News that the 501(c)(4) was very new and he didn’t know much about it. “I’m the last guy that knows why these things get set up or what their structure is,” said Kilgore, who runs a firm that does campaign compliance work. “I get looped in by the lawyers.” Kilgore declined to say which law firm approached him about the new group.
Kilgore referred iWatch News to Jason Miller, a spokesman for the Super PAC and the new group, who did not respond by publication time.
Under IRS rules, 501(c)(4) groups are required to be “primarily engaged” in the promotion of social welfare which in practice means that they must spend the majority of their funds on non-political matters including issue advocacy and grassroots lobbying.
The fact sheet for the new group, which provides a roadmap for potential donors and fundraisers about what’s legal and not legal for the organization to do, says that it can also “make expenditures about candidates,” provided it’s not a majority of spending.
A spokesman for the IRS, which has to approve the tax status of groups like Citizens for a Greater America, emailed that the agency can’t comment on the status of applications.
Veteran campaign finance watchdog Fred Wertheimer, the president of Democracy 21, told iWatch News “there is no way a group like this is entitled to 501(c)(4) status. When this group surfaces, Democracy 21 and the Campaign Legal Center will challenge its eligibility.”
Wertheimer’s group and the legal center on Wednesday filed a challenge at the IRS to the tax status of four other 501(c)(4) groups that officially were set up to focus on a mix of political and issue advocacy work. One of the groups is Priorities USA which was created earlier this year by two former White House aides to help re-elect President Obama. Another is the Karl Rove-linked Crossroads GPS.
According to the fact sheet, federal candidates or officeholders can recommend that people contribute to Citizens for a Greater America. It also says that “an agent or employee of a federal officeholder or candidate is permitted to solicit contributions to Citizens for a Greater America from individuals.”
501(c) groups like Citizens for a Greater America and Super PACS have proliferated in the wake of last year’s historic Supreme Court ruling in Citizens United v. FEC, which gave the green light to unlimited donations by corporations, unions and individuals to groups that specifically back candidates with advertising and other electoral tools.