You are herePress Release: CREW Asks IRS to Investigate the American Action Network

Press Release: CREW Asks IRS to Investigate the American Action Network

March 8, 2011- Today, Citizens for Responsibility and Ethics in Washington (CREW) asked the Internal Revenue Service (IRS) to investigate whether the American Action Network (AAN) has violated tax law. While AAN - chaired by former Republican Senator Norm Coleman - is organized as a tax-exempt organization under section 501(c)(4) of the tax code, it spent tens of millions of dollars persuading Americans to vote against Democratic congressional candidates in the 2010 elections.

Spurred on by the disastrous Citizens United Supreme Court decision, AAN and other outside groups spent nearly $300 million to elect the 112th Congress. As 501(c)(4) organizations, AAN and others are allowed to raise unlimited amounts of money without having to disclose their donors, but they cannot engage in political campaign activity as their primary purpose - a requirement AAN (and others) ignore. CREW highlighted some of the most egregious offenders on both sides of the political spectrum by naming its 2010 election all stars, which included Sen. Coleman.

“The American Action Network and Sen. Coleman have every right to work to elect more Republicans, but they can’t violate the tax laws to do it,” said CREW Executive Director Melanie Sloan. “No one is exempt from following the tax laws. If a group wants to take advantage of privileges like protecting the identity of donors, it has to follow the obligations that go along with that. Here, that would mean spending the majority of resources on activities unrelated to political campaigns. AAN didn’t play by the rules.”

AAN stated in its original submission to the IRS that the organization’s primary purpose was to promote social welfare by advocating for a range of economic and national security policies, and that only a “minor portion” of its planned activities would be political. AAN anticipated spending no more than $2.4 million during 2010 election cycle. Yet just days after receiving IRS approval for AAN’s application, Sen. Coleman announced the group hoped to be active in 8-10 Senate races and 25 House races in 2010. According to its Federal Election Commission reports, AAN spent at least $18 million on political activities in 2010.

AAN’s television ads encouraged voters to call their Democratic members of Congress and tell them how to vote on a particular piece of legislation, even though the ads ran mostly after Congress had recessed for the election. One warned voters the health care reform law their Democratic member of Congress had voted for would pay for Viagra for sex offenders. Even though no vote was scheduled on repealing the law, the advertisements encouraged viewers to call their member and tell them to vote for repeal “in November.” This kind of political advertisement masquerading as an “issue” ad is political activity under tax law.

“Citizens United put a for sale sign on every ballot box across the country,” said Ms. Sloan. “It is time for Congress to act and put this genie back in the bottle. Elections should be won by the candidates with the best ideas, not by innocuous sounding groups funded by anonymous donors with secret agendas.”





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