June 7, 2012 – Today, Citizens for Responsibility and Ethics in Washington (CREW) called on the Federal Election Commission (FEC) to investigate whether the American Action Network (AAN) violated campaign finance and tax laws. The group, chaired by former Republican Senator Norm Coleman, spent millions of dollars during the 2010 election attempting to persuade Americans to vote against Democratic congressional candidates, but failed to both register as a political committee and file any required disclosure reports with the FEC. AAN also engaged in far greater political activity than is permitted under tax laws governing 501(c)(4) organizations.
“AAN spent millions of dollars on political ads during the 2010 elections, defiantly violating federal law,” said CREW Executive Director Melanie Sloan. “Any group spending over 65% of its funds on political activities can hardly argue influencing elections is not its primary purpose. Significant financial penalties might prod AAN to learn the math.”
Groups that spend more than $1,000 a year on independent expenditures and whose major purpose is electing federal candidates must register with the FEC as political committees. AAN far exceeded the spending trigger in 2010, and demonstrated that campaigning was its major purpose by spending more than two-thirds of its money on federal elections. Political committees must also file periodic reports with the FEC, identifying donors and listing all expenditures. AAN has done neither.
In addition, as a 501(c)(4) organization, AAN is barred from making political activity its primary purpose. CREW first called on the IRS to investigate AAN’s political spending last year, but is supplementing that complaint based on new information from the group’s recently filed 2010 tax return. The newly released return shows 66.8% of AAN’s total spending from July 2009 through June 2011 was used for political activity. By any definition, this is clearly over the percentage permitted by the tax code.
“It is past time for the FEC and the IRS to say enough is enough and finally crack down on this shadowy non-profit,” continued Sloan. “What is the point of having laws on the books if they are not enforced? With the November elections only five months away, these agencies need to act now to make sure this election isn’t a repeat of the ‘anything goes’ mentality of 2010.”
- IRS Response (6-25-12)