Norm Coleman's "shadowy" American Action Network under fire for flouting law
Coleman's "advocacy organization" is taking heat for flouting campaign finance and tax laws.
Norm Coleman may be Minnesota's most popular prominent Republican, but he isn't feeling any love these days from nonprofit campaign watchdog groups in Washington.
Both Democracy 21 and Citizens for Responsibility and Ethics in Washington have recently called for the IRS and FEC to investigate whether Coleman's American Action Network conservative advocacy organization is operating in violation of campaign finance and tax laws.
AAN is a tax-exempt organization. According to CREW, as such, it is supposed to spend less than $1,000 annually on expenditures aimed at electing federal candidates. While it's arguable what sorts of expenditures constitute the type of candidate-specific contributions in question, tax returns show that AAN spent more than $25 million on "advocacy, organizing and political activity" from July 2010 to June 2011, including a $500,000 donation to American Crossroads, a super PAC linked to former Bush Administration power broker Karl Rove.
Furthermore, as a tax-exempt organization, AAN doesn't have to publicly disclose its donors. Tax returns show that 35 unnamed donors contributed a total of $27.5 million to AAN from June 2010 to June 2011, including a single $7 million contribution from an anonymous source.
Democracy 21 argues AAN should have its tax-exempt status stripped. In a letter to the IRS, Democracy 21 founder and president Fred Werthheimer wrote that while AAN characterizes itself as a partisan think tank concerned with social welfare, its tax returns clearly indicate it is a political action group.
The AAN touts itself as promoting social welfare, but critics say it's really a political advocacy organization.
"These political groups are anything but 'social welfare' organizations' and their donors are not 'secret Santas,'" Werthheimer wrote.
For its part, CREW points out that while no tax-exempt organization is supposed to spend more than 65 percent of its funds on political activity, AAN's returns shows that 66.8 percent of its spending from July 2009 through June 2011 was devoted to political activity. "By any definition, this is clearly over the percentage permitted by the tax code," CREW writes in a press release.
CREW wants the FEC to strip AAN's tax-exempt status and impose "significant financial penalties" on the organization for violating campaign finance and tax laws.
Melanie Sloan, executive director of CREW, said: "It is past time for the FEC and IRS to say enough is enough and finally crack down on this shadowy non-profit... What is the point of having laws on the books if they are not enforced?"
"With the November elections only five months away, these agencies need to act now to make sure this election isn't a repeat of the 'anything goes' mentality of 2010," she added.
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