In a letter sent today to President Obama, Democracy 21, joined by the Campaign Legal Center, wrote that “your involvement with Organizing for Action (OFA) raises serious questions about whether you are complying with the Ethics in Government Act ban on the solicitation of gifts by executive branch officials, including the President.”

According to the letter:

Federal gift rules prohibit executive branch officials from receiving or soliciting gifts from “prohibited sources,” i.e., donors who have interests that may be substantially affected by your administration’s decisions and policies.  While the President is exempt from the prohibition on receiving gifts, the President is covered by the prohibition on soliciting gifts.

The ban on soliciting gifts applies to gifts solicited by you directly or indirectly, including donations solicited by you, other than campaign contributions.

It appears that the efforts you have undertaken on behalf of OFA are an indirect solicitation of funds by you for the organization you helped create. As discussed below, these efforts include your statements announcing the formation of OFA and endorsing the work of the organization, your statements seeking support for the organization and your participation in donor events for OFA.

To the extent these efforts by you on behalf of OFA involve potential donors who have interests that may be substantially affected by your administration’s decisions and policies, i.e., “prohibited sources,” they raise serious questions about whether you are complying with the ban on the solicitation of gifts by executive branch officials.

According to Democracy 21 President Fred Wertheimer

Organizing for Action is a mistake by President Obama that he should correct. Organizing for Action is an unprecedented entity that creates new opportunities for big donors and bundlers of large amounts to obtain corrupting influence over executive branch policies and decisions.

OFA is also a terrible precedent for the future that if left in place will spread to members of Congress who will use similar non-profit groups to create new opportunities for big donors and special interests to exercise corrupting influence over congressional decisions.

With Organizing for Action, President Obama has traveled a long distance from the days when he talked to the nation about changing “business as usual” in Washington. OFA is “business as usual” in Washington. In the best interests of the country and the presidency, President Obama should move to shut down Organizing for Action before it is too late.

The letter from the watchdog groups stated:

According to published reports, OFA is a privately-funded entity that has been created by you, by former top officials in your White House and by top political associates from your presidential campaign.  OFA has been fully embraced by you.  According to published reports, you will help direct OFA and will be “intimately involved in” its activities.  OFA reportedly is running your Twitter account and Facebook page.[1]

While claiming status as a tax-exempt section 501(c)(4) “social welfare” organization, OFA is operating, in essence, as an arm of your presidency to advance your policy agenda.

At the same time, OFA is soliciting large contributions from individual donors and enlisting bundlers to raise large sums in your name and on your behalf.  According to published reports, bundlers will receive perks in return for raising at least $500,000 each.

OFA creates the opportunity for its donors and bundlers to exercise corrupting influence over your administration’s policies and decisions.  At a minimum, it creates the appearance of such corrupting influence.

The letter also stated:

Furthermore, while the President is exempt from the statutory ban on the receipt of gifts by executive branch officials, the reasons for this exemption have no application to the donations being provided to OFA, which is functioning on your behalf and as an arm of your presidency.  Thus, we believe your involvement with OFA raises serious questions about whether you are complying with the purpose and spirit of the ban on the receipt of gifts by executive branch officials.

OFA is an unprecedented organization.  No president has ever before helped create and been involved in this kind of privately-funded entity. While there have been a few instances where national political parties established section 501(c)(4) “tax-exempt” groups to help support their agendas, these groups were terminated relatively quickly.  In any event, these groups did not function as an arm of the presidency.

On your first day in office, you issued an executive order to prohibit executive branch appointees from accepting gifts from those attempting to influence government policy.  At the time, you said the executive order would make “a clean break from business as usual.”[2]  As you begin your second term in office, your involvement in OFA represents anything but “a clean break from business as usual.”

Democracy 21 and the Campaign Legal Center believe that it is in the best interests of the country and the presidency for OFA to be ended.  We urge you to take all steps necessary to shut down OFA.

The letter concluded:

There are multiple factors that support the conclusion that OFA is a private-sector arm of your presidency:

● You have been personally involved in the creation and public announcement of OFA and in the promotion of OFA to your campaign supporters and the public.

● You have personally endorsed and embraced the work of OFA, which you have said is important to “finishing the job” started by your first term.

● You intend to appear at and participate in OFA events that will be attended by OFA’s large donors and bundlers, including the “founders’ summit”.

● OFA was also created, and is being operated, by former top White House officials in your Administration and by your close political associates and former campaign operatives.

● OFA is a direct outgrowth of your 2012 presidential campaign, and reportedly, by purchase or lease, will become the beneficiary of key assets of your 2012 presidential campaign, including voter database information and email distribution lists.

● OFA Chairman Jim Messina, reportedly has stated that you will help direct OFA and will be “intimately involved” in its operations.

● OFA is managing your Twitter account and Facebook page.

For the reasons set forth in our letter, serious questions exist about whether your involvement with OFA complies with the statutory ban on the solicitation of gifts by a President.  Serious questions also exist about whether your role in OFA complies with the spirit and purpose of the ban on the receipt of gifts by a President.

         Democracy 21 and the Campaign Legal Center urge you to shut down OFA.

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