Wednesday, February 27, 2013

President Obama's non-profit "Organizing for Action" raises some serious questions.

Thanks to the New York Times story, "Obama Backers Seek Big Donors to Press Agenda", I've been doing some reading up on President Obama's new "Organizing for Action" which is designated by the IRS tax code as a social welfare organization. This means it is not subject to donation limits or other laws which govern PACs.  The Organization's mission is:
"to support the President in achieving enactment of the national agenda Americans voted for on Election Day 2012. OFA will advocate for these policies throughout the country and will mobilize citizens of all parties and diverse points to speak out for speedy passage and effective implementation of this program, including gun control, sensible environmental policies to address climate change and immigration reform."

According to the Times:
"The goal is to harness those resources in support of Mr. Obama’s second-term policy priorities, including efforts to curb gun violence and climate change and overhaul immigration procedures. Those efforts began Friday, when thousands of Obama supporters were deployed through more than 80 Congressional districts around the country to rally outside lawmakers’ offices, hold vigils and bombard Congress with e-mails and phone calls urging members to support stricter background checks for gun buyers."

The Organization claims it will:
"support the legislative agenda we voted on, train the next generation of grassroots organizers and leaders, and organize around local issues in our communities."

Okay so it sounds good so far, right? The President is using this non-profit organization as a means of getting his agenda out there and encouraging Americans to get involved in promoting said agenda, for the good of the American people. Volunteers in communities across America will send emails, make phone calls and bang on the doors of their elected officials to push for the enactment of the items on this agenda. We want people to be empowered and get more involved. We want them to care about what's going on around them. Also, we want our elected officials to pay attention to what the people have to say. 

That said, while immigration, the environment and gun control are issues that affect all of us (and they are issues important to OFA), the organization is essentially promoting a political agenda.  The site clearly states that it promoting the agenda the American people voted for in November 2012. OFA is in fact, an extension of the President, it embodies his values and ideals and its sole purpose is to promote his policies and get them into law. While in it's FAQ, OFA is firm that it is non-partisan and encourages people from all parties to take part in it, how could this organization appear, to the average person, as anything but a political organization?


I read up on the IRS rules governing social welfare organizations and it is broad when it comes to defining social welfare organizations. It states:
"[A]n organization is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare of the community."
"Organizations exempt under IRC 501(c)(4) may engage in germane lobbying activities without the restrictions imposed on IRC 501(c)(3) organizations."

The Tax Almanac probably explains the rules on social welfare organizations best:
"2) Promotion of social welfare—(i) In general. An organization is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare of the people of the community. An organization embraced within this section is one which is operated primarily for the purpose of bringing about civic betterments and social improvements."
 "(ii) Political or social activities. 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. Nor is an organization operated primarily for the promotion of social welfare if its primary activity is operating a social club for the benefit, pleasure, or recreation of its members, or is carrying on a business with the general public in a manner similar to organizations which are operated for profit. "

So I wondered about the lobbying activities of 501(c)(4) organizations and I came across a PBS Frontline published a story in October 2012 and it wasn't pretty.
"While these nonprofits have always been allowed to lobby for change, in 1959, regulators opened the door to political activity by interpreting “exclusively” to mean that groups had to be “primarily” engaged in social welfare and helping the community.

But regulators never defined exactly how they would measure this balance. Part of the reason, said Marcus Owens, a former head of the IRS division overseeing nonprofits, is because the IRS didn’t want to limit what it could evaluate in deciding what was political activity.

However, the lack of clarity has created a unique type of organization when it comes to politics — chief among those differences being what the public must be told about these nonprofits’ donors."


In addition, Pro Publica published a story in August 2013 titled "How Nonprofits Spend Millions on Elections and Call it Public Welfare" in which they expose the gaping holes in the 501(c)(4) law and how its broad interpretation leads to inappropriate activity. ProPublica's investigation found that a number of 501(c)(4) organizations have misused their status. One of the problems:
"To receive the tax exemption, groups were supposed to be "operated exclusively for the promotion of social welfare." The IRS later opened the door to some forms of political activity by interpreting the statute to mean groups had to be "primarily" engaged in enhancing social welfare. But neither the tax code nor regulators set out how this would be measured."

The thing that keeps creeping up here is accountability. There isn't any.
Is this or is this not a lobbying group?  Its website says there will no participation in elections nor endorsement of any candidate but if you're making phone calls and sending emails and banging down doors in Washington (and at the state and local level) to get the President's agenda into law, you are essentially lobbying. You are using whatever legal means necessary to get legislators to vote for your cause. The OFA says it will pay salaries. Whose salaries? What will they be doing? What type of relationship will those being paid, or the volunteers have with anyone in the government?

And what about the donors? There are no restrictions on how much an individual can donate, nor are there restrictions on who can donate. However, the Organization has a self-imposed rule of not accepting donations from:
 "registered lobbyists or foreign agents, political action committees, or foreign nationals, including foreign governments or foreign political parties. It will welcome support from all other supporters of its work. As a nonprofit organization organized for this social welfare purpose, it may accept donations of any size from those eligible to give."

The Organization is hosting a "Founders Summit" in DC where donors who give $50,000 mingle with the President's former campaign manager. Donors who give $500,000 will have the opportunity to become part of the President's National Advisory Board and will attend four meetings per year meetings with the President.

The Times reports:
"Moreover, the new cash demands on Mr. Obama’s top donors and bundlers come as many of them are angling for appointments to administration jobs or ambassadorships."

Again, why am I telling you this?


It is very important that the American people know who bends the ears of our elected officials. The people have the right to know who is influencing the elected officials. It is clear in this case that individuals who donate the most money to this organization will have the ear of the President and others in the White House, and they thus they will have some kind of influence. What we want is transparency, as the President has been preaching since his first election. Whether we are going to get it or not in this matter is yet to be determined in an administration that is not very good at the transparency thing, just ask Washington Lawyer Katherine Meyer who has filed FOIA requests for over 30 years and has never seen more barriers thrown at her than she has with the current administration.

How can the Organization justify taking unlimited contributions from individuals and corporations and then giving special consideration to the wealthiest donors? This is the antithesis of what President Obama is all about. He is about fighting for the little guy, the underdog, the poor, the unemployed, the middle class, the sick, the disabled, the elderly and the children. How do you think it appears to the guy making $10 an hour trying to support a family of five after his wife has been laid off from her job, when the President gives his attention to wealthy donors, asking them for their input on social issues (remember it is a social welfare organization) rather than asking the hardworking men and women out there in the trenches every day living and breathing the hardships.

Of course in his defense, who do you want the President seeking advice from? Your average blue collar worker or a wealthy Harvard graduate who owns a Fortune 500 company? In his defense I'd say that he's seeking advice from people he feels can best help him promote his agenda, the agenda that, in the end, is supposed to promote a better life, a better nation, for all of us. The bottom line is money talks.

I think it's a great idea to encourage Americans to get involved and promote the social welfare of this nation. We need more people actively engaged and involved in the government and in their communities. An educated and informed citizenry makes a better and more prosperous nation for all of us. However...beware the price we might have to pay for that.

If it wants to remain legitimate and earn the respect of the American people, Organizing for Action needs to not only come clean with the information on its donations but it needs to enact a strict policy that donors, regardless of how much they donate, will not be granted positions on any national advisory board. They will not be granted special meetings with the President. If they want to donate to the cause because they care, let them do so and send them a thank-you note but Organizing for Action should make it very clear, in no uncertain terms, that there will be no, absolutely no granting of any special privileges, period.

That my friends...is transparency, or at least a step in the right direction.

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