Legal Filings

Legal Filings
Feb 01, 2011

Crew Asks IRS to Investigate American Future Fund

Washington, D.C. –Today, Citizens for Responsibility and Ethics in Washington (CREW) asked for the Internal Revenue Service (IRS) to investigate whether the American Future Fund (AFF) has violated tax law.  AFF, organized under section 501(c)(4) of the tax code, burst onto the political scene in the 2010 election, spending millions of dollars asking voters to vote against Democratic candidates for federal office.  501(c)(4) organizations like AFF may not have as their “primary purpose” the participation in political campaigns in support of, or in opposition to, candidates for public office.

“There is nothing wrong with working to elect Republicans, but you can’t violate the law to do it,” said CREW Executive Director Melanie Sloan. “Given the amount of money the American Future Fund spent on ads in the 2010 congressional elections, it seems clear the primary – if not only – goal of the group is to elect Republicans to Congress.”

According to reports AFF filed with the Federal Election Commission, AFF spent almost $10 million on political activities in 2010 – a sum greater than the organization’s total expenditures for 2008 and 2009 combined.  AFF spent more than $7.3 million in the 2010 election on independent expenditures expressly advocating the election or defeat of candidates for federal office, and at least another $2.2 million on electioneering communications – ads that mention a candidate by name close to an election.  News reports described the AFF as “one of the more active players in this fall’s campaigns, spending millions of dollars on ads attacking Democrats across the country.”  In addition, the New York Times reported that as of October 17, 2010, AFF had devoted more than half of its television advertising spending in 2010 to express advocacy advertisements.

The list of AFF’s officers reads like a who’s who of Iowa Republican politics. Nicole Schlinger, AFF’s sole board member when it was organized, is the former finance director for the Republican Party of Iowa.  The current president, Sandra Greiner, served as a Republican in the Iowa House of Representatives from 1992-2008, was elected to the state Senate in 2010.  AFF reportedly got its initial seed money from Bruce Rastetter, CEO of Hawkeye Energy Holdings, who has been described by Iowa newspapers as a “long-time power broker in Iowa politics.”

In its initial filings with the IRS, AFF claimed its activities were “strictly issue based and non-partisan” and that it “does not support or oppose any candidate for public office.”  

“How can an organization that has a sitting Republican legislator as its chief executive claim to be non-partisan?” said Ms. Sloan.  “It is clear the American Future Fund is a front for wealthy Republicans to anonymously spend millions electing Republicans to Congress.”

Spurred on by the disastrous Citizens United Supreme Court decision, AFF and other outside groups spent almost $300 million to elect the 112th Congress.  As 501(c)(4) organizations, AFF and others are allowed to raise unlimited amounts of money without having to disclose their donors, but they cannot engage in political campaign activity as their primary purpose -- a requirement AFF (and others) ignore.  CREW highlighted some of the most egregious offenders on both sides of the political spectrum by naming its 2010 election all stars, which included AFF President Sandy Greiner.

“Citizens United put a for sale sign on every ballot box across the country,” said Ms. Sloan.  “It is time for Congress to act and put this genie back in the bottle.  Elections should be won by the candidates with the best ideas, not by innocuous sounding groups funded by anonymous donors with secret agendas.”

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