April 26, 2012 – Citizens for Responsibility and Ethics in Washington (CREW) again called on the Internal Revenue Service (IRS) and the Federal Election Commission (FEC) to investigate the Commission on Hope, Growth and Opportunity (CHGO), a phony tax-exempt group whose real work is partisan politics. CHGO claims to be exempt from taxes under a section of tax law meant to apply to organizations primarily engaged in “social welfare” activities. Yet in 2010, CHGO spent more than half its budget on political ads targeting candidates for the House of Representatives, directly violating its tax-exempt status. CHGO also violated federal law by failing to register as a political committee or report any of its political advertising expenditures to the IRS or the FEC.
“We first called on the IRS and the FEC to investigate the so-called commission nearly a year ago,” stated CREW Executive Director Melanie Sloan. “Now we have even more evidence that CHGO exists largely to elect Republicans to Congress. While there is nothing wrong with this goal, CHGO cannot violate the law to do it.”
CHGO has shown contempt for the law from the start. As CREW noted last year, in an application submitted under penalty of perjury to the IRS in July 2010, CHGO claimed it had no plans to spend any money on elections. Just weeks later, the ad blitz began.
While the ads clearly were political, CHGO did not report any of its spending on them. CREW, however, obtained information about the group’s advertising from the Campaign Media Analysis Group (CMAG), a company that tracks campaign ads. According to CMAG’s data and CHGO’s 2010 tax return, CHGO spent at least 51.5 percent of its 2010 budget on House elections, making political campaigns its primary activity.
“The wheels of justice apparently turn very slowly at the IRS and the FEC,” Sloan said. “It would be nice if the IRS and the FEC would take action against groups that violated the law in 2010 before the 2012 elections are over. If there was any enforcement whatsoever, maybe the tax-exempt groups like CHGO that are lining up to spend hundreds of millions of dollars to influence this year’s elections would think twice before breaking the law.”