Political Charity Outside the Lines, Part 9

Means, Motive and Opportunity

In the earlier posts of this series, we document how Minnesota’s leading progressive non-profits apparently exceeded Federal rules on allowable political activity during the 2010 election.
 

What we haven’t discussed in much depth is “why.”  The obvious answer is to elect Democrat Mark Dayton as governor.
 

As we dig deeper here at Political Charity Outside the Lines, we find that the final answer is specific and targeted. 
 

Election Year Generosity

In 2009, the progressive social-welfare non-profit WIN Minnesota took in revenue of $404,490.[1]  From that revenue, WIN distributed $240,000 in grants (59.3 percent of revenue) to Alliance for a Better Minnesota’s 501(c)(4) entity.[2]
 

In 2010, with an election-year haul of $2,706,377 in donations,[3] WIN Minnesota’s 501(c)(4) entity could  afford to be more generous with its grantees.
 

For their 501(c)(4) friends at Alliance for a Better Minnesota (ABM), WIN provided grants totaling $372,903.[4]  As we documented in Parts (1) and (4) of this series, ABM’s 501(c)(4) donated $266,705.62 of that amount to ABM’s 527 political unit.
 

According to WIN’s 2010 federal income tax return, the tax-exempt 501(c)(4) entity discloses grants to 6 other 501(c)(4) non profits and one 501(c)(3).[5]
 

WIN describes this program to the IRS with the following language,
 

Supporting issue education and advocacy efforts.  Working with organizations in the state to inform and engage Minnesotans on issues related to the environment, women’s issues, human rights and economic justice.[6]
 

Again, the 2010 language turns out to be a cut-and-paste from the language used by WIN Minnesota to describe its 2009 program.  However accurate the language may have been the previous year, the only issue addressed by the 2010 grants was the defeat of Republican Tom Emmer.  The only advocacy effort undertaken was in support of Democrat Mark Dayton’s election.
 

What these grants have in common is the support for the Democrats’ get-out-the-vote effort among critical constituencies.
 

America Votes

The second largest grant in this area went to the local chapter of America Votes.  Although WIN’s IRS filing gives the Minnesota chapter’s local address, the EIN provided for the $334,278 grant is for the national organization based in Washington, DC.[7]  According to its website,
 

America Votes works across the country with over 300 state and national partner organizations to advance progressive policies, expand access to the ballot, coordinate issue advocacy and election campaigns, and protect every American's right to vote.
 

America Votes’ Minnesota branch is located in the same St. Paul office suite as ABM and WIN.  Indeed, the Minnesota chapter lists as partners all of the usual progressive non-profits and labor unions.
 

In 2010, America Votes—Minnesota had a small 527 entity active in the state, with an address listed in Washington, DC, according to filings at the state’s Campaign Finance and Public Disclosure Board.
 

In 2012, the outfit added a second 527 unit (America Votes Action Fund—Minnesota, again with a DC address).  Its funding came from two sources:  the WIN Minnesota 501(c)(4)—with a $10,000 donation—and from Oakland, California’s Progressive Kick Super PAC, split between its Minnesota 527 (listed at a CA address) and the group’s 501(c)(4).  More about Progressive Kick will come in a later post, but for now you should know that these 2012 efforts centered on the defeat of GOP State Rep. King Banaian of St. Cloud.
 

Impact Minnesota

In Parts (2) and (5) I covered extensively the $274,998 donation in 2010 to fly-by-night non-profit Impact Minnesota.  A contemporaneous account in MinnPost makes clear the purpose of the grant,
 

"At the end of the day, our focus will be getting folks out for Mark Dayton…"
 

“The African-American community needs to know which candidates support their issues, because their vote alone can make the difference.”
 

League of Rural Voters

In 2010 WIN’s 501(c)(4) made a $10,000 donation to the League of Rural Voters, a Minneapolis-based non-profit with the following mission,
 

Mobilize rural voters in critical districts, expanding our network of trained rural community organizers, providing multi-lingual campaign materials and building strong community partnerships.

OutFront Minnesota

In 2010 WIN’s 501(c)(4) made a $16,000 donation to OutFront Minnesota, a non-profit organization with a mission
 

to create a state where lesbian, gay, bisexual, and transgender people are free to be who they are, love who they love, and live without fear of violence, harassment or discrimination.
 

In 2010, OutFront Minnesota’s network included three state 527 groups:  Minnesota Action, Minnesota Marriage Equality, and the Minnesota Action Independent Expenditure Fund. 
 

The bulk of Minnesota Action’s spending went to the Democrats’ state House and Senate campaign units.  The Marriage Equality unit was not active in 2010.
 

The Independent Expenditure Fund reported receiving contributions totaling $6,868 in cash and in-kind (staff and office services) from OutFront’s 501(c)(4) unit.  OutFront did not disclose the original source of that contribution.  The group spent a total of $19,551.13 in support of Democrat Mark Dayton’s campaign for governor.
 

Working America Education Fund

In 2010 WIN’s 501(c)(4) gave $100,000 to Washington, DC’s Working America 501(c)(3) Education Fund charity arm.  Working America is, according to the Houston Chronicle, an affiliate of the AFL-CIO labor union.
 

Working America’s Minnesota office operates the organization’s state 527 unit, the Working America Minnesota Political Fund.  In 2010 the Fund reported to the Board that it raised $340,537.93.  Of that amount, $100,000 came from WIN’s 527 unit, $50,000 came from the Education Minnesota teachers’ union, $2,437.93 from the national Working America office, with almost all of the rest coming from other labor unions.  The largest donor was the Minnesota AFL-CIO, who donated $146,230.26, after the 2010 election.  All told, the Fund spent nearly $250,000 in support of Mark Dayton’s campaign and in opposition to his opponents’ campaigns.
 

Somali Action Alliance

In Parts (3) and (6) of this series, I document extensively the $54,000 donation given by WIN’s 501(c)(4) to the Somali Action Alliance.
 

TakeAction Minnesota

Long-time readers will recall that I previously had undertaken a separate seven-part series on TakeAction’s political charity operations.
 

TakeAction’s Executive Director, Dan McGrath, also serves as Secretary/Treasurer and a board member of WIN Minnesota.
 

In 2010, WIN’s 501(c)(4) donated $153,523 to TakeAction’s 501(c)(4) entity.  TakeAction operated two state 527 units in 2010:  a Political Action Committee (PAC) and a Political Fund.
 

The TakeAction PAC spent most of its money in 2010 reimbursing TakeAction’s 501(c)(4) for administrative services ($117,299).  The 527 Fund reported to the Board an in-kind donation of $39,740 from TakeAction’s 501(c)(4) unit, for “canvass” services.  TakeAction does not disclose the original source of this nearly $40,000 in-kind donation.
 

Canvassing whom?  As documented on TakeAction’s now-defunct renew.mn website, the effort centered on turning out Minnesota's Hmong community for Democrat Mark Dayton.
 

 

So what to make of all this?  Why the elaborate shell game of moving money around these various groups?
 

Some of it may have to do with hiding the original source of funds.  Also, having multiple groups claim the same donation as revenue inflates the apparent resources of the network.
 

But why would WIN jeopardize not just its tax-exempt status but the tax-exempt status of several other groups?
 

Democrat Mark Dayton won the election in 2010 by only a few thousand votes, representing less than ½ of one percent of the electorate, after a month-long recount.  Turnout by Democrat voters was critical to his narrow win.
 

The WIN 501(c)(4)’s nearly $1.5 million investment in get-out-the-vote efforts among Democrat constituencies—African-American and immigrant communities, rural progressives, LGBT, and labor—paid huge dividends in electing the first progressive governor in a generation.  In the past three years, those communities have reaped the rewards of bigger government and the enactment of their top issues into state law.
 

Here are today’s questions:
 

• What did Ken Martin know, and when did he know it?
• What did Dan McGrath know, and when did he know it?
• Was the description included for these transactions on WIN’s Form 990 a mistaken copy from the previous year’s form, or an attempt to mislead?
• What do the minutes of WIN’s board reflect regarding this set of transactions?
• Who or what were WIN’s source(s) for these grants?
• Did WIN engage in these transactions in an effort to work around Federal tax law?
• After accounting for indirect political donations, did WIN and these groups violate IRS regulations on the political activities of tax-exempt organizations?

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[1] 2009 IRS Form 990 Income Tax Return of WIN Minnesota, filed May, 28, 2010, Part I, Line 12.

[2] Ibid., Schedule I, Part II.

[3] 2010 IRS Form 990 Income Tax Return of WIN Minnesota, filed October, 26, 2010, Part 1, Line 8.

[4] Ibid., Schedule I, Part II, Section 1, Line 1.

[5] Ibid., Schedule I, Part II, Section 1, Lines 2 through 9.

[6] Ibid., Part III, Line 4a.

[7] Ibid., Schedule I, Part II, Section 1, Line 2.