For all the outrages over the IRS’s targeting of conservatives trying to start tax-exempt groups, there’s a flip side to the scandal: the agency possibly going easy on tax-exemption applications by groups doing the administration’s political work.
This is linked to another breaking scandal, Health and Human Services Secretary Kathleen Sebelius’ apparent fund-raising for two pet nonprofits. The Washington Post broke the news last week that Sebelius had asked health industry firms “to make large financial donations” to groups helping the administration sell ObamaCare.
The Post specifically mentioned Enroll America, a nonprofit run by Anne Filipic, who previously was White House deputy director for public engagement. Its managing director, Chris Wyant, led Obama’s 2012 “ground game” in Ohio.
Earlier press reports revealed the administration’s other nonprofit for promoting ObamaCare is Organizing for Action, which is simply the president’s re-election campaign morphed into precisely the kind of nonprofit entity that Tea Party activists hoped to set up when they were targeted by the IRS. (How close are the group’s ties to the president? Find out at its Web site: BarackObama.com.)
The House Energy and Commerce Committee just launched a probe into Sebelius’ fund-raising, which may be illegal and is certainly grossly improper.
But the first questions should go to the IRS in connection with the nonprofits:
* When Organizing for Action submitted its request a few months ago to be a 501(c)(4) tax-exempt group, just like the Wetumpka Tea Party of Alabama, did it receive an 88-page questionnaire in return? Did IRS agents in Cincinnati, Washington and California demand it turn over its list of donors?
* Enroll America started as a 501(c)(3) tax-exempt group in 2010, the same time conservative groups began to face obstacles to IRS recognition. What information did it have to provide? Did anyone ask about its board chairman, Ron Pollack, whose own Families USA nonprofit was intimately involved in passing ObamaCare — a law that helped the group’s revenues soar from $4.3 million in 2010 to $11 million in 2011?
Politico reported these ties months ago. Has any IRS official shown an interest? The Politico article began, “Several former White House staffers have found a new way to promote ObamaCare: They’re spending millions in secret corporate and union cash, and they’re harnessing grass-roots tactics to some of the biggest names in the health-care industry.”
That’s why Obama’s ace from the Ohio ground ops campaign has a new job. And why Pollack told reporters that Enroll America “is going to be run like a political campaign.”
When will IRS ears prick up over these friendly relations between big business, big nonprofits and national political officials?
Sebelius’ actions certainly seem to violate federal regulations against fund-raising: Cabinet members may only solicit donations in their capacity as private citizens and must never solicit funds “from someone who has or seeks business with the department.” Given her power under the ObamaCare law over the health-care sector, it’s doubtful that any firm in the health industry could escape that category.
Of course, it wouldn’t be the first time she broke the law. The administration’s special counsel declared in 2012 that she had violated federal Hatch Act prohibitions against politicking during official business. She apologized, was wrist-slapped rather than fired, and the Democratic National Committee and Obama for America (the predecessor to Organizing for Action) quietly paid a few of the bills.
Nor would this be the first time administration officials colluded with friendly nonprofits to advance the president’s agenda. An Environmental Protection Agency regional administrator resigned after a FOIA request and lawsuit uncovered his private e-mails with the nonprofit Environmental Defense.
And his boss, EPA head Lisa Jackson, resigned not long ago after similar requests discovered she had used a secret e-mail account. The agency hasn’t produced all the e-mails involved, but it seems likely she was communicating with nonprofits helping the administration wage its war on coal.
In short, Congress shouldn’t just look at nonprofits that this administration gave a hard time; it should also look at ones that have cozy relations. The contrast is striking.
Scott Walter is vice president of the Capital Research Center in Washington, DC.