October 2, 2019; Bloomberg
Two Democratic Senators, Minority Leader Chuck Schumer and Senator Ron Wyden of Oregon, submitted a letter to the IRS on Wednesday questioning the NRA’s fitness to be treated as a 501c4 organization in light of the recent report released by Democrats on the Senate Finance Committee that explored the notion of the NRA as a Russian asset.
As Schumer and Wyden write in the letter, “Russia’s interference in the 2016 elections represented an unprecedented attack on American democracy. In light of the continued efforts of Russia to undermine American democracy, IRS must use its full authority to prevent foreign adversaries from again exploiting tax-exempt organizations to undermine American interests.”
They go on to link these issues to the more general issues of private inurement that have been the focus of the New York state attorney general and the press over these last few months.
The report also raises concerns about potential private inurement and use of exempt resources for non-exempt activities. Evidence in the report confirms that some members of the NRA delegation participated in the Moscow trip primarily or solely for the purpose of advancing personal business interests, rather than advancing the NRA’s tax-exempt purpose. The findings of the report further suggest that NRA officials’ use of the organization to advance personal business interests may have exposed the NRA to further involvement by Butina and Torshin.
As you are aware, public reporting also suggests that the NRA may have been engaged in other significant and persistent acts of potential private inurement and other impermissible acts. Given this report’s concerning findings and other allegations of potential violations of tax-exempt law by the NRA, it is incumbent on the IRS to fully investigate the organization’s activities to determine whether the NRA’s tax exemption should be disallowed.
Sign up for our free newsletter
Subscribe to the NPQ newsletter to have our top stories delivered directly to your inbox.
Meanwhile, in a complaint to the Office of Personnel Management (OPM), Everytown for Gun Safety is requesting an investigation into the NRA to determine whether it qualifies to receive funds gathered through the Combined Federal Campaign (CFC). For readers unfamiliar with the CFC, it is the workplace-giving campaign for federal employees, and has been on a steep decline for many years in terms of the dollars it takes in—a situation many attribute to mismanagement, a dearth of understanding about the basics of fundraising, and the more general decline of workplace-giving campaigns, like the better known United Way.
To gain access to the program, and in accordance with federal regulations, the NRA Foundation has repeatedly and explicitly certified that it “effectively uses the funds contributed for its announced programs” and that members of the “governing body” of the organization “have no material conflicts of interest.” Everytown’s complaint takes issues with both of these claims and calls on OPM to investigate, and ultimately expel, the NRA Foundation from the Combined Federal Campaign.
The release goes on to acknowledge that the NRA Foundation and the NRA, where most of the scrutiny has been focused, are separate entities, but “over the past several months, there has been a series of public disclosures and reports revealing substantial evidence of serious and wide-ranging financial impropriety… including self-dealing, improper enrichment of organization insiders, conflicts of interest, and violations of the not-for-profit laws. As a result, there are now active regulatory investigations by the Attorney General of the District of Columbia as to CFC participant the NRA Foundation and the NRA, and by the Attorney General of New York as to the NRA and its affiliated not-for-profit entities.”
These allegations and investigations of serious potential misconduct at the NRA are particularly troubling because, in the last two reported years, the NRA Foundation has sent over half of its revenue to the NRA, meaning that over $0.50 of every dollar raised through the federal government’s CFC for the NRA Foundation ended up in the coffers of the NRA.
The letter goes on to suggest that “at a minimum, federal employees should be notified that the NRA Foundation is under law enforcement regulatory investigation so that each federal employee can make an informed decision as to whether to contribute.”—Ruth McCambridge