Friday, February 8, 2013

Obama Group Runs Afoul of IRS Rules, Its Own Promise [Updated]

    Obama for America continued its metamorphosis this week into Organizing for Action, an independent organization that will advocate for various "progressive" causes, including immigration reform and gun control.  The BarackObama.com website, home of the presidential campaign of Barack Obama, has been changing as well, but the transition has not been without its missteps.

    The latest problem involves a local event (actually a series of events) posted on the site as a Day of Action to collect signatures for Democrat Terry McAuliffe to get the former chairman of the DNC on the ballot for governor of Virginia:
    At the bottom of the page is the new footer which has replaced the "Paid for by Obama for America"  that used to mark each page on the website:
    However, under the rules governing 501(c)(4) "social welfare" organizations, which is what Organizing for Action is according to its "About" page, such activity on behalf of a candidate or political campaign is prohibited. IRS rules state:
The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office.
    As noted above in the event listing, the host for the event is John Heflin.  According to Heflin's Linked-in profile, he is currently an intern for the Terry McAuliffe for Governor campaign, and previously worked for the Presidential Inaugural Committee and the Wisconsin branch of the Obama for America campaign.

    Even if Organizing for Action does not have a pre-screening process for the listing of such events, this posting has been on the site for more than two days without being caught.  If Organizing for Action is to avoid future trouble with the IRS, more discretion will be needed in the activities it promotes.

    This is not the first time Organizing for Action has run afoul of 501(c)(4) IRS regulations.  Two weeks ago, before OFA suspended its donations page, at least two emails when out, one from the president himself and one from Vice President Biden.  Both emails were labeled as "Paid for by Organizing for Action," and yet the links in the email took recipients to the BarackObama.com website where donations were still be accepted for the Obama Victory Fund to pay off campaign debt. (As of 12/31/12, the Obama campaign was still reporting debt of almost $6 million.)  While the president was not a "candidate" at the point the donations were being solicited, at least the spirit of the IRS rules were being violated if not the letter.

    Ironically, Politico ran a story today entitled "New Obama group Organizing for Action says it’s non-partisan
" [emphasis added]:
President Barack Obama’s new nonprofit Organizing for Action insists that promoting the White House’s legislative agenda can’t be counted as “partisan political activity.”The organization on Wednesday quietly posted new guidelines on its website formally declaring its intention to stay out of campaign politics.Neither OFA nor its chapters will be involved in any way in elections or partisan political activity,” OFA wrote. “Its exclusive purpose is public policy advocacy and development, and in particular, both enactment of President Obama’s legislative agenda and the identification and advancement of other goals for progressive change at the state and local level.
     In view of the Terry McAuliffe campaign event scheduled on OFA's website, "partisan political activity" by any definition, it appears OFA's public statements do not yet match its actions.

UPDATE: Friday afternoon, OFA removed the event from its site.  The Google cache is still available here.

Note: This article first appeared at The Weekly Standard on February 8, 2013.

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