The New York Times profiled a highly-secretive "collection of perhaps 1,500 right-leaning players in the entertainment industry" whose belated application for non-profit status may be complicated by their seemingly partisan affiliation with political candidates and figures, possible campaign activity that is prohibited. Notably, the Times missed a significant inclusion on this list of right-wing stars: Justice Antonin Scalia.
The group's application for a 501(c)(3) designation, a tax status for non-partisan groups that would allow donors to claim deductions, is currently being scrutinized because its claim that it "has absolutely no political agenda" is at odds with its record of hosting right-wing media and officials, according to the January 22 Times article. Unmentioned by the Times, listed on his most recent annual Financial Disclosure Report (CY 2012), Scalia also gave an August 25, 2012, speech to Friends of Abe and received reimbursement for his "transportation, food, and lodging." From the Times:
[T]he Internal Revenue Service is reviewing the group's activities in connection with its application for tax-exempt status. Last week, federal tax authorities presented the group with a 10-point request for detailed information about its meetings with politicians like Paul D. Ryan, Thaddeus McCotter and Herman Cain, among other matters, according to people briefed on the inquiry.
Tax experts said that an organization's membership list is information that would not typically be required. The I.R.S. already had access to the site's basic levels, a request it considers routine for applications for 501(c)(3) nonprofit status.
Friends of Abe -- the name refers to Abraham Lincoln -- has strongly discouraged the naming of its members. That policy even prohibits the use of cameras at group events, to avoid the unwilling identification of all but a few associates -- the actors Gary Sinise, Jon Voight and Kelsey Grammer, or the writer-producer Lionel Chetwynd, for instance -- who have spoken openly about their conservative political views.
The I.R.S. request comes in the face of a continuing congressional investigation into the agency's reviews of political nonprofits, most of them conservative-leaning, which provoked outrage on the right and forced the departure last year of several high-ranking I.R.S. officials. But unlike most of those groups, which had sought I.R.S. approval for a mix of election campaigning and nonpartisan issue advocacy, Friends of Abe is seeking a far more restrictive tax status, known as 501(c)(3), that would let donors claim a tax deduction, but strictly prohibits any form of partisan activity.
While tax-exempt groups are permitted to invite candidates to speak at events, it is not uncommon for the I.R.S. to scrutinize such activities to determine whether they cross the line into partisan election activity. One issue is whether the organization invites all the qualified candidates.
"The I.R.S. would say that if you are inviting only conservative candidates, that's a problem," said Marcus S. Owens, a former director of the I.R.S.'s exempt organizations division. "But it's never really been litigated."
A 2010 Variety article explained that this group for Hollywood conservatives is not secret "as much as it is anonymous." This anonymity does not apparently apply to the many industry actors, writers, and producers who are repeatedly connected to the group, including Gary Sinise, Kelsey Grammer, Patricia Heaton, David Murdock, Lionel Chetwynd, Pat Boone, Craig Haffner, and Jon Voight. Andrew Breitbart was also reportedly a member. Friends of Abe is also well-known enough to have been described as "influential in conservative circles" in a 2011 Roll Call article on GOP fundraising in Hollywood. From Roll Call:
[T]he group, whose name refers to Abraham Lincoln, is no secret to prominent Republicans. Sinise and Friends of Abe have hosted every Republican presidential candidate except Mitt Romney for discussions. The group has also hosted Speaker John Boehner (Ohio), Cantor, and House Majority Whip Kevin McCarthy.
Variety, in addition to mentioning that former RNC chair Michael Steele and vice-presidential candidate Paul Ryan are also among the national GOP leaders who have been "drawn" to the group, reported it was not initially conceived as "a fund-raising entity." This does not appear to be a strict rule, as the Daily Beast claimed that the group hosted a "major fundraiser" in 2010 for Republican Senate candidate Carly Fiorina.
It is unlikely that Friends of Abe could continue this behavior as a 501(c)(3).
As explained by The Times, the beneficial tax designation being sought by Friends of Abe is more strict toward partisan activity than that enjoyed by 501(c)(4)s, whose political activities on behalf of both the left and right have come under increased examination by both Congress and the IRS. Accordingly, although certain affiliations with like-minded government officials is permitted of 501(c)(3)s, they are under much tighter guidelines.
For example, progressive organizations such as the People for the American Way Foundation or the American Constitution Society for Law and Policy frequently present similar Democratic figures at official events as well. But the tax status that these progressive organizations already have and that Friends of Abe is currently seeking is the mechanism by which the government ensures this perfectly permissible behavior does not cross the line into questionable political activity. Senior Editor for Variety Ted Johnson reported on Friends of Abe back in 2010 and explained the recent revelations:
The IRS's guidelines for 501(c)3 organizations, set up so charities and educational entities can have tax exempt status, say that it cannot be an "action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates."
Elizabeth Kingsley, attorney specializing in nonprofits at Harmon, Curran, Spielberg & Eisenberg in Washington, said that when it comes to applicants for tax-exempt status, it would be "inappropriate" for the IRS to ask for a list of members, but "it may not be inappropriate to ask for qualifications for members."
She said that it was also "relevant question" to ask about the purpose of a political figure's speech, as the IRS was to make sure that a group isn't engaged in campaign activity.
"Those are not crazy questions for an organization trying to determine a standard, and one that is very vague and not really well defined," she said. She also said that the IRS, in trying to determine if an organization is in the public interest, wants to make sure that the benefits of an organization don't accrue to a select number of members.
As for Scalia, although no text of his speech or description of the Simi Valley event appears to be readily available, the progressive political reform group Common Cause already flagged the fact that if Friends of Abe can be fairly described as "a political organization," or was involved in "political activity," Scalia's speech could arguably be a violation of the code of ethics for federal judges. As Common Cause admits, however, The Code of Conduct for U.S. Judges is not binding on Supreme Court Justices and Scalia has demonstrated little concern in the past for avoiding events that present a conflict of interest. Scalia is not alone in disregarding this appearance of impropriety; good government groups have raised flags about Justice Clarence Thomas' behavior as well.