June 23, 2017
A non-profit donor to a super PAC that backed Sen. Lindsey Graham’s (R-SC) 2016 presidential primary bid filed a tax return that appears to misrepresent the group’s political activity. This is the second non-profit contributor to the super PAC whose 2015 tax filings conflict with the super PAC’s own reports to the Federal Election Commission (FEC).
The South Carolina Conservative Action Alliance (SCCAA) told the IRS it did not spend any money on electoral politics in 2015, but FEC records show the group contributed $140,000 to Security is Strength PAC in September 2015. At the time, the super PAC was paying for independent expenditures supporting Sen. Graham’s presidential efforts. The super PAC later went on to support then-Sen. Kelly Ayotte’s (R-NH) failed re-election efforts.
The $140,000 contribution by the South Carolina non-profit accounts for nearly 90 percent of the group’s total 2015 spending. Groups like SCCAA, which are organized under section 501(c)(4) of the tax code, are allowed to spend money on politics, but influencing elections cannot be the group’s primary activity, which has generally been defined as more than 50 percent of a group’s expenses.
Though the SCCAA denied spending money on politics, the group did admit spending $140,000 on something, telling the IRS it spent the money on “lobbying.” Neither federal lobbying records nor South Carolina lobbying records, however, indicate SCCAA has ever employed lobbyists.
SCCAA is not the only donor to the Security is Strength PAC that appears to have misrepresented its political activities on tax forms. As CREW has previously noted, Freedom Frontier, another non-profit donor to Security is Strength PAC, told the IRS it raised no more than $50,000 in 2015. Security is Strength PAC, however, reported receiving $250,000 from the group in November 2015.
The discrepancy between the two groups’ tax returns and the super PAC’s FEC filings means that one side of the transactions provided inaccurate information to federal authorities. Either the non-profits gave the contributions but failed to accurately report their activities to the IRS or the super PAC misreported who gave it the money.
Graham Backed By Allies With Secret Cash
Unlike Freedom Frontier, SCCAA has clear past ties to the beneficiary of the super PAC’s spending at the time, Sen. Graham. The non-profit’s advertising over the years has praised Sen. Graham, particularly as he faced the specter of a primary in 2014. Several of the people publicly identified with the organization, which is not required to reveal its donors, are also known supporters of the senator, including a political consultant who is now at the center of a major corruption scandal in South Carolina.
For instance, David Wilkins, the chairman of the group’s board, is a former speaker of the South Carolina state House as well as a former ambassador to Canada. According to him, he and Sen. Graham have been “good friends since 1992.” Sen. Graham, in fact, introduced Wilkins at the 2005 hearing on his nomination to the diplomatic post. When Sen. Graham started testing the waters for a presidential run, Wilkins ran the committee set up to raise money for expenses, which carried a very similar name to the super PAC SCCAA later funded: Security Through Strength. The group later morphed into Sen. Graham’s presidential campaign committee.
According to SCCAA’s tax forms, the group’s records are maintained by Rebecca Mustian, the daughter of powerful South Carolina political consultant Richard Quinn, at the same address listed on the Facebook page of Quinn’s consulting company, Richard Quinn & Associates. Quinn, whose firm is said to be the focus of an ongoing corruption probe in the state, has long served as a political consultant to Sen. Graham. In 2015, Sen. Graham’s presidential campaign paid Richard Quinn & Associates $134,165 for consulting and other expenses, according to FEC records.
Another member of SCCAA’s leadership is former state Rep. Jim Harrison, who has been listed as both the group’s treasurer and its president. He also worked part-time for Quinn. When Harrison, now employed by the state legislature as the code commissioner and director of the South Carolina Legislative Council, was awarded the Riley Institute at Furman University’s 2012 Wilkins Award for Excellence in Legislative Leadership — named after SCCAA’s chairman — Sen. Graham gave the keynote address.
Curiously, until 2015 Harrison signed all of SCCAA’s tax returns. But on the 2015 return, which omitted the group’s political spending in support of Sen. Graham, Harrison’s name is crossed out and replaced by Kevin Hall, another board member of the group.