In order to fight a new form of dark money organization, Citizens for Responsibility and Ethics in Washington (CREW) today filed complaints against political groups posing as non-profit social welfare organizations but existing only to benefit the presidential campaign of Marco Rubio and the senate campaign of Thom Tillis.
Since June 2015, Conservative Solutions Project, Inc. (CSP) has spent or committed to spend more than $8 million on broadcast television advertisements to support Sen. Rubio’s presidential campaign, nearly half the money the organization has raised to date. It is currently in the midst of a $3 million ad buy in Iowa, pushing Rubio’s candidacy in the February 1st caucus. Carolina Rising president Dallas Woodhouse admitted to a local news station that the group spent $4.7 million on broadcast ads in 2014 to help Sen. Tillis get elected, roughly 97% of the group’s budget. These are clearly political organizations.
Under the IRS’s interpretation of the tax code, section 501(c)(4) organizations—which CSP and Carolina Rising purport to be—must be primarily engaged in social welfare activity, which does not include participation in political campaigns. As participation in political campaigns seems to be their sole focus, they appear to be violating the tax code, leading to CREW’s complaints. Each organization is also set up for the benefit of one individual, Rubio and Tillis, rather than general social welfare, which is also a violation.
CSP is closely associated with the closely named Conservative Solutions PAC, whose sole purpose is to support Sen. Rubio’s presidential campaign. The two organizations share board members, fundraising consultants and spokesman, who acknowledged, “Absolutely, the two groups are related.”
As for Carolina Rising, when asked by a reporter at Tillis’ victory party, “You just mentioned that you [Carolina Rising] spent a whole lot of money to get this man elected, right?”, Woodhouse responded, “4.7 million dollars. We did it.”
The IRS must take forceful action to enforce the law and stop Conservative Solutions Project and Carolina Rising from abusing their tax-exempt status and to prevent other organizations from following their lead.