IRS Incompetence, Yes. Tea Party Innocence? No.

Those groups whining about their c4 status and the IRS should watch what they say, because it turns out they're not so grass-rootsy after all.

The IRS certainly deserves some of the criticism it's getting, but it's also worth looking at the groups they were examining a little closer.

I've been collecting the IRS filings for these organizations since they dropped off the FEC radar in early 2009. At that time, these political "civic" organizations were springing up like weeds after a spring storm. Let's take just one subset of the larger group and look more carefully.

American Majority Action is the 501(c)(4) companion to American Majority, the Koch-funded 501(c)(3) organization devoted to "training conservative activists." It is headed up by Andrew and Net Ryun, sons of former Kansas congressman Jim Ryun. Their initial report to the IRS for the short year ending June 30, 2011 described its program services as "issue advocacy and get out the vote operations in 4 states including 9 liberty headquarters." Secondary services included "capacity building grants to 32 like-minded organizations," and tertiary services included "health care policy issue advocacy." Amounts spent were $1,020,500, $529,000 and $224,000, respectively.

What like-minded organizations received grants? Here is a list of some, not all, since they did not list all 32 grantees:

  • Arkansas Conservative United - $45,000
  • Citizens Alliance of PA - $5,000
  • Tulsa 912 Project Association - $5,000
  • WI GrandSons of Liberty - $55,000
  • Grassroots Outreach (AZ) - $275,000
  • Liberty Restoration Foundation (FL) - $20,000
  • Jefferson County Tea Party - $5,000
  • Kitchen Table Patriots - $46,500
  • Medina County Friends Neighbors (OH) - $5,000
  • Ohio Liberty Council - $20,000
  • PA Family Council - $5,000
  • PA Coalition for Responsible Government - $6,000
  • St Louis Tea Party - $22,500
  • Tampa 912 - $5,000

Most of these groups are those "small tea party groups" crying out about unfair treatment now. They have billionaires beneath their scattered whines -- billionaires who seeded those groups with the intention of building network nodes in key swing states for the 2012 election.

At least one of them isn't a non-profit at all. You might recall Grassroots Outreach from 2012, or perhaps the name Nathan Sproul rings a bell. On April 29, 2010 I wrote about Mark Jacoby, who pled guilty to voter registration fraud in California. He was associated with Nathan Sproul then. Sproul has a very long history of conducting unethical voter registration cleansings in key states, and was ultimately caught doing so aggressively in 2012.

Perhaps it was more convenient to launder payments through a brand-new nonprofit organization than for the RNC to get their hands dirty, or maybe it was just insurance. Either way, Sproul received $275,000 for "get out the vote" efforts.

Meanwhile, American Majority, the c3 associated with American Majority Action, was incubating a new group called the John Hancock Committee for the States. The JHCFS was the successor organization to Eric Odom's American Liberty Alliance. Here is American Majority's incubation disclosure:

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The almost $700,000 in funding for that organization came from the Sam Adams Alliance, the very same organization that incubated American Majority. I reported that information on April 26, 2010, which was around the same time that the IRS placed these groups under higher scrutiny.

Shorter version: Sam Adams Alliance incubates American Majority. American Majority spawns American Majority Action and John Hancock Committee for the States. American Majority Action sends thousands of dollars to 'small tea party groups' around the country for "get out the vote" operations. What does JHCFS do? According to Rachel Tabachnik, all three groups are in an alliance to do the same thing:

The focus of this national Tea Party group is radical free marketers and culture warriors – anti-union, anti-regulatory, anti-environmental, anti-feminist, anti-reproductive rights, and the list goes on. But it’s not about Israel.

In early October American Majority opened a storefront office on Forward Avenue in the largest Jewish neighborhood in Pittsburgh. This is one of several campaign offices opened in swing states including Pennsylvania, Florida, and Ohio.

The American Majority Inc.’s purpose, as listed on its IRS 990 tax forms is to “create a national training institute dedicated to identifying, training, and mentoring political leaders.” It is affiliated with the Valley Forge Alliance in Aledo, Texas, also formerly called the John Hancock Committee for the States and the American Liberty Alliance, and the Sam Adams Alliance. The organizations have worked closely with Glenn Beck’s 912 organizations to build Tea Party networks.

Just to place some additional context, the JHCFS gave out some grants in 2011:

  • Texas Public Policy Foundation: $124,000
  • 1851 Center for Constitutional Law: $7,000
  • Tea Party Patriots: $50,000
  • James Madison Institute: $25,000

In 2011, the Ryun brothers let JHCFS fly from the nest after it changed its name to the Valley Forge Alliance. At that time, they handed the reins over to Mark Meckler, disgraced former leader of -- wait for it -- Tea Party Patriots! At the same time, Meckler was also placed in charge of Empower Texans, another 501(c)(4) organization created to watchdog state legislators.

The Tea Party Patriots are some of the biggest whiners about their non-profit status being held up, yet when you untangle the funding hairball and remember that Jenny Beth Martin is a Republican consultant, it's not quite as evil as she makes it seem.

What else was happening at the time the IRS decided to look closer at these groups? Karl Rove was crowing all over the place about his big initiative with Crossroads GPS, Sarah Palin was reading her hand at the "National Tea Party Convention", and Glenn Beck was huddling with Paul Ryan to plot ways to "flush out" progressivism.

In this environment, is it difficult to understand why the IRS put these groups under high scrutiny? Just for the record, it wasn't only conservative groups, either. In fact, the only organiztion denied tax-exempt status was a liberal group who intended to recruit women candidates.

The scandal here isn't the IRS having the common sense to look harder at these organizations. The scandal is the utter incompetence with which they did it. Asking stupid questions, asking for radio interview transcripts? Stupid, stupid, stupid. Their incompetence is truly mind-blowing, but this one case study should prove beyond all reasonable doubt that these so-called grassroots organizations deserved all scrutiny and attention given to them. After all, these organizations and their donors are asking for a pass on taxes. They have a duty to prove they deserve that.

Next on the agenda? Push Congress to close the loophole. It's simple enough. No political activity in non-profit organizations that directly funds election efforts. Period. That should take care of any possible future scandals, and still allow organizations to advocate/lobby for their cause.

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