Yesterday, the nonprofit watchdog Citizens for Responsibility and Ethics in Washington (CREW) filed a complaint with the Internal Revenue Service in which it alleges that Carolina Rising violated IRS rules surrounding the permissible activities of 501(c)(4) nonprofits. The complaint asks the IRS to: “investigate whether Carolina Rising…violated the tax code by operating primarily to influence political campaigns and for the private benefit of now-Sen. Thom Tillis (R-NC), and whether Carolina Rising and its president, Dallas Woodhouse, violated federal law by failing to disclose on its tax return nearly $4.7 million Carolina Rising spent on political activity in 2014.”
The gist of the complaint is that Carolina Rising acted, despite its claims to be an issue advocacy group, as a campaign organization that existed to get Tillis elected. This conclusion is boosted, the complainants argue, by Woodhouse’s own admission to a TV reporter on the night of Tillis’ election in which the following exchange took place:
Reporter: “You spent a whole lot of money to get this man elected, right?”
Woodhouse: “4.7 million dollars! We did it.”
In addition to the tax code issues raised by the complaint, another fascinating aspect to the story is the question of who funded Carolina Rising. This is from a summary of the issue posted by CREW yesterday:
“As a 501(c)(4) tax-exempt organization, Carolina Rising is not required to disclose its donors, leaving the public in the dark about who funded all those ads. The Washington Postreported in July 2014 that one of Carolina Rising’s contributors was Art Pope, the multimillionaire discount store mogul who is part of the Koch donor network. Dallas Woodhouse, the president of Carolina Rising, refused to confirm for the Center for Public Integrity whether Pope was a supporter.He did, however, insist that Carolina Rising was supported by a ‘large, diverse donor body’:
Woodhouse did say Carolina Rising is funded by multiple donors.
‘And I’ll go as far as to say anybody who makes assumptions based on my previous associations are wrong,’ he said. ‘Broadly speaking, we have a large, diverse donor body that we have brought into this mission of helping the Republicans tell their story in North Carolina. They are not the same old usual suspects.’
The group’s 2014 tax return tells a different story. The form, known as a 990, reveals that Carolina Rising received just two contributions in 2014, including one for $4.82 million. That single donation accounts for 98.7% of Carolina Rising’s revenue in 2014. In fact, since the organization spent just under $4.8 million in 2014, that single donation covered the entire cost of Carolina Rising’s operations, which consisted almost entirely of TV and cable ads.”
If you’re looking for a sad commentary on the state of American politics and confirmation that a handful of super-rich individuals now all but own our government, the notion that North Carolina’s junior senator is now beholden to a single donor for as much as $4.8 million in de facto campaign support ought to provide it. That our ridiculous tax laws prevent the citizens from even knowing who that donor is makes the state of things all the more outrageous.