The 2004 presidential election may be in the history books, but the left-wing protests and incendiary rhetoric that targeted President Bush in last year's campaign have not died away. As attacks on the administration's policies continue, so does scrutiny of the finances of such groups, which some say pose significant questions as to whether their activities comply with tax law.Anti-Bush groups like the International Action Center boast of their support for the "courageous Iraqi resistance that has derailed the U.S. Empire." The IAC, which plans an anti-war demonstration in New York City Saturday, has also conducted mock trials and "convicted" President Bush and British Prime Minister Tony Blair of "war crimes." Those activities are significantly bankrolled by a non-profit group called the People's Rights Fund, whose tax-exempt status with the Internal Revenue Service precludes it from engaging in "substantial use of inflammatory and disparaging terms."
The IRS's 501(c)(3) provisions, which govern thousands of non-profit organizations across the country, also warn groups involved not to "express conclusions on the basis of strong emotional feelings" at the expense of "objective evaluations." It's these tax laws, among others, that have caught the attention of Ken Boehm, chairman of the National Legal and Policy Center, a conservative group that monitors the activities of non-profits. "You can have debates, you can do policy papers. It doesn't consist of a bunch of people running down the street shouting obscenities and all these other things," said Boehm. "That's not [non-profit] activity and it never has been."
Boehm told the Cybercast News Service that the tax code restrictions apply, even when groups like the People's Rights Fund provide financing and otherwise stay behind the scenes. "Whenever you have a relationship between a (c)(3) and a (c)(4)," as in the case with the People's Rights Fund and the International Action Center, Boehm said, "the rule is, (c)(3)'s can give to (c)(4)'s, but they have to be for the types of activities that are (c)(3) activities."
Multiple calls seeking comment from the People's Rights Fund, the IAC, and other like-minded groups were not returned, in spite of the fact that in some cases, their offices share the same building address and telephone numbers. While (c)(3) organizations are generally prohibited from engaging in overt political activities, (c)(4) organizations have more latitude in such matters.
The Capital Research Center, another conservative watchdog of non-profit groups, reported in its March Organizational Trends newsletter that, "the International Action Center (IAC), received $62,000 in 2002 from the People's Rights Fund" according to the most recent data provided by the IRS and that "The Fund claimed 2002 revenues of $447,045 and assets of $61,458."
The International Action Center, which was founded by former U.S. Attorney General Ramsey Clark, pulls few punches on its website, promoting other groups like Troops OUT NOW.org (also financed in part by the People's Rights Fund) and No Draft No Way.org. In its related links section, the IAC website includes a category called the "Iraq War Crimes Tribunal." Immediately below that headline is a hyperlink to another website called People Judge Bush.org. The IAC's website also includes several requests for "[t]ax deductible donations," which the website clarifies, should be "over $50.00" and sent to the People's Rights Fund/IAC Project.
In advertising its Saturday "March to Central Park," marking the second anniversary of the U.S. invasion to topple Saddam Hussein's regime, the IAC boasts that "[t]he whole world will be marching and watching. "We have a responsibility to respond with renewed determination and commitment in the face of the Bush Administration's launching of a new phase of the war against the Iraqi people," the IAC website states, adding that demonstrators will march to the military recruiting station in Harlem to protest "the economic draft."
There is no mention, for example, of this week's inaugural session of the Iraq National Assembly, the first session of freely elected Iraqi politicians in a half century.
Past IAC protests have been aimed at the International Monetary Fund and World Bank, both of President Bush's inaugurations, the 2004 Democratic National Convention in Boston and that year's Republican National Convention in New York, as well as the Israeli-Palestinian conflict. Yet, the IAC's benefactor, the People's Rights Fund, maintains its tax-exempt status with the IRS by claiming that its work serves "educational purposes," something Boehm disputes.
"An examination of their web pages, materials publicly available, a Nexis search, etc., shows that they are to a large degree an activist group that conducts street demonstrations, puts together political coalitions, uses enflamed rhetoric, and does not make any attempt to do any balance whatsoever," Boehm said of the People's Rights Fund. Alan Dye, a Washington, D.C., lawyer providing services to non-profit organizations, also saw problems with the People's Rights Fund claiming an "educational" tax-exemption while funding a political protest. "It would seem to me that a protest is not charitable ... or educational," Dye said. Dye said IAC's anti-Bush inaugural protests in 2000 and 2004 should also have alerted the IRS. "It's hard for me to see how the IRS would find a counter-inaugural protest to be educational or charitable. I don't see how you justify that."
Boehm said the IAC, "without question," presents its viewpoint in an emotional, rather than reasonable manner, in violation of the 501(c)(3) provisions. The IAC activity is "political, it's ideological, it's advocacy," Boehm said. Dye agreed that IAC's style could be as problematic as its substance. "If the language is inflammatory enough, if the appeals are strongly enough based on emotion rather than reason [the IRS] certainly could, if they wanted, find the content not to be educational," Dye told the Cybercast News Service. Because the People's Rights Fund is a 501(c)(3) and the IAC and other projects it sponsors are not, the People's Rights Fund is classified as a fiscal sponsor to those activities.
Fiscal sponsorship, according to IRS Ruling 68-489, 1968-2 C.B. 210, allows (c)(3)s to distribute funds to non-exempt groups, but the (c)(3) must maintain full control of the funds. However, instead of retaining control of the money supporting the IAC's activities, Boehm wonders whether the People's Rights Fund is merely acting as a "funnel" for the funds. "What else is it doing?" he asked in reference to the People's Rights Fund. "The (c)(3) seem[s] to be small, they don't have a paid staff, [and] a chunk of the money goes to (c)(4) activities," Boehm added. "It looks like this very hard-edged activist group (the IAC) is getting funding from a (c)(3) for their agenda." In contrast to the IAC website, the People's Rights Fund site consists only of its mission statement, contact information, and a store for making donations to the sponsored projects. The People's Rights Fund advertises no activities of its own.
Boehm said he believes the solicitation of funds on the IAC website and affiliated sites are an indication that the donors intend for the money to go directly to the IAC instead of, as the law mandates, to the People's Rights Fund. "The fact that they're touting that on the webpage for the activist group certainly does lend an appearance that there's a conduit arrangement," Boehm said.
In a January 28 interview with the Cybercast News Service, Bob Huberty, executive vice president of the Capital Research Center, expressed concern about the fact that the IAC, the People's Rights Fund, and a number of other groups "are all at the same address in New York, all different groups."
Boehm agreed that the concept of a 501(c)(3) sharing an address with one of its sponsored projects was a cause for concern. The address, 39 West 14th Street in New York City, is also listed by the Troops Out Now coalition, People Judge Bush.org, Vote No War.org, Vote To Impeach.org, No Draft No Way.org, and others.
The People's Rights Fund is not the only 501(c)(3) group drawing attention for the projects it sponsors. The Progress Unity Fund provides money to the anti-war International ANSWER Coalition, which until recently was listed as a project of the People's Rights Fund. Boehm noted similarities in the templates of the respective websites for the People's Rights Fund and the Progress Unity Fund. There are also several connections between International ANSWER and IAC, both of which share office space in New York City and show a cross-pollination of leadership.
The International ANSWER coalition is directed by Ramsey Clark, who is also the founder of the IAC. Members of International ANSWER will also participate in this weekend's anti-war demonstration. Similar to the relationship between the People's Rights Fund and the IAC, International ANSWER advertises events on its website and requests that tax-deductible contributions be directed to the Progress Unity Fund. "Your contribution will help support the upcoming March 19 Day of Global Mass Action," the International Answer sales pitch reads. The Progress Unity Fund shares headquarters with International ANSWER at 2489 Mission Street in San Francisco. International ANSWER may also be sponsored by a second 501(c)(3) -- the Alliance for Global Justice (AGJ). International ANSWER requested donations for its January 20 counter-inaugural protest through AGJ. AGJ appears to share office space with International ANSWER's Washington, D.C., headquarters at 1247 E Street Southeast.