A national watchdog group has filed complaints with the IRS and the Federal Election Commission claiming a North Carolina nonprofit broke campaign finance laws during the 2014 election. That nonprofit was headed by the current executive director of the North Carolina Republican Party.
You may not know the nonprofit’s name, but chances are you’ve seen Carolina Rising’s work.
"Carolina Rising was a massive force in North Carolina’s US Senate Election," says Dave Levinthal, senior political reporter at the Center for Public Integrity. He says the conservative North Carolina nonprofit blitzed television stations across the state in 2014.
"In August alone, this organization in and of itself ran more ads than either Kay Hagan or Thom Tillis," he says.
Ads like this one featuring a young autistic boy named Samuel.
http://www.youtube.com/watch?v=Jp4dw2QBxEo
At the time, Carolina Rising was run by Dallas Woodhouse, who left the nonprofit earlier this year to become the executive director of the North Carolina Republican Party. When we spoke to Woodhouse last year, he described the group’s goal’s this way.
"There has been such an effort to caricature some of our folks on the right side of the isle. And part of the whole mission of our group is to tell the truth and tell the other side of the folks in Raleigh and so that’s what we’re trying to do."
And that may be the problem.
The complaint against Carolina Rising was authored by Citizens for Responsibility and Ethics in Washington, otherwise known as CREW. It's filed complaints against Republicans and Democrats in the past. And their complaint against Carolina Rising stems from financial documents the group filed with the IRS.
Carolina Rising is what’s known as a social welfare group – a 501(c)(4) – as defined by the tax code. These groups can spend on issue ads but that designation comes with some limitations, says Dave Levinthal.
"The going rule is that you’re not supposed to spend more than half of your annual expenditures on engaging in the political process," he says.
In 2014 Carolina Rising raised just shy of $4.9 million. It spent all but $80,000 of that on pro-Thom Tillis ads, which is why CREW has asked the IRS to change the group’s designation and revoke its tax exempt status. It also asked the FEC to issue a ruling. But don’t hold your breath, says Levinthal,
"The chances at least based on what we’ve seen over the past couple of years are perhaps slim to none," he says.
The IRS has not enforced many of these rules ever since they were caught giving more scrutiny to groups with Tea Party in their names. As for the FEC, it’s an example of when bipartisanship goes wrong. Made up of three Democrats and three Republicans, the FEC has been deadlocked on these issues for years.
