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In the service of social welfare, Democratic operatives get IRS seal of approval

OpenSecrets.org News | |

Rebecca Lambe was a top strategist to former Senate Minority Leader Harry Reid (D-Nev.). In the 2016 election cycle, she was president of Majority Forward, a 501(c)(4) nonprofit, and treasurer of Senate Majority PAC, a super PAC. (Twitter photo)

Rebecca Lambe, J.B. Poersch and Rodell Mollineau aren’t names that anybody who’s familiar with national Democratic politics would likely associate with nonpartisan social welfare activity. Especially not at the height of election season.

Lambe was the chief political strategist and campaign manager for former Sen. Harry Reid, the wily Senate Democratic leader. She was described by the Las Vegas Sun in 2009 as “the force behind the state Democrats’ success” in the 2008 elections and even “the voice of Harry Reid.” In 2016, she was treasurer of a super PAC called Senate Majority PAC, which exists to elect as many Democratic senators as possible.

Poersch is not only the former head of the Democratic Senatorial Campaign Committee, but has also been a longtime strategist for Senate Majority PAC. Last March, he was handpicked by Senate Minority Leader Chuck Schumer (D-N.Y.) to run the super PAC.

And Mollineau is a political consultant and the former president of American Bridge, a Democratic organization that specializes in opposition research against Republicans. Before that, he was a top aide to a number of Democratic senators, including Reid.

This band of partisan operatives all serve on the board of a nonprofit social welfare organization that’s supposed to keep politicking to less than half its activities. And last month, the IRS gave the group, Majority Forward, its seal of tax-exempt approval, despite the fact that it spent more than $12.5 million helping Democratic senators try to cling to their seats in 2016’s highly contested elections.

Democrats — perhaps none more than Harry Reid — have been vocal for years about their dislike of this kind of activity by groups that aren’t required to disclose their donors — at least, when conservative organizations were at issue. Rarely, if ever, though, have they singled out Majority Forward as an example of the kind of rule bending they find troubling, despite the fact that it closely resembles those more prolific, right-leaning “dark money” groups in form and function.

Majority Forward — which operates under section 501(c)(4) of the tax code — was able to raise millions of dollars in a very short time, pouring much of it into ads designed to help Democrats running in tight races. And like groups on the right, it played the Federal Election Commission’s reporting deadlines to its advantage, thereby avoiding putting sizeable chunks of its political activity on record with that agency.

Also like many of its conservative analogs, Majority Forward has had very little discernible social welfare activity. It also has practically no public profile. Its website is a single page, with two short paragraphs of text. It has no Twitter account, and its Facebook page has just over 400 likes.

IRS Application

Incorporated in June 2015, Majority Forward promptly spent $3.4 million in its first year, some of which went toward digital ads urging Senate Majority Leader Mitch McConnell to hold hearings and a vote on President Obama’s nominee to the Supreme Court, Merrick Garland. It wasn’t until the start of its second year that it filed its IRS application to be recognized as tax exempt.

majority forward toomeyLess than two weeks before that, Majority Forward had begun spending heavily in Pennsylvania’s Senate race between GOP incumbent Pat Toomey and challenger Katie McGinty, a Democrat. It was the group’s first public foray into the political arena, and included some comments about Toomey that didn’t pass muster with factcheckers — such as that he tried to shut down the government over funding for Planned Parenthood. By Election Day, Majority Forward’s reported spending tally in Pennsylvania alone would come close to $6 million.

But in its application to the IRS, Majority Forward downplayed its political activity. It described its mission as supporting “non-partisan” voter registration and turnout programs and promoting “progressive causes through issue advocacy directed at the public.” The group said its issue advocacy would be nonpartisan, noting its ads in support of Merrick Garland’s nomination.

The group answered “yes” to the question of whether it had, or intended to, spend money on politics, but it tried to minimize that side of its activities. Majority Forward, the application materials read, “spends only a limited amount of resources influencing federal and state elections.” This political activity “will not become a majority of its budget in any fiscal year,” it goes on.

But a Center for Responsive Politics analysis of spending data reported to the FEC, as well as past CRP reports about activity that only shows up in Federal Communications Commission data, raises serious questions about just how limited Majority Forward’s electioneering really was.

And the IRS response to Majority Forward’s application shows the agency was aware of the group’s deep political ties, but it stopped short of asking the most critical questions.

IRS Response

Nearly a month after the election, in December, the IRS contacted Majority Forward and asked, among other things, about its affiliation with Senate Majority PAC, the super PAC with whom it shared office space, leadership and staff. In response, Majority Forward provided its cost sharing agreement with Senate Majority PAC, showing that the personnel of the nominally apolitical nonprofit were shared with the political group and that the two occupied the same offices.

In fact, the two groups have been almost ridiculously cozy: Lambe was president of Majority Forward and treasurer of Senate Majority PAC; Poersch was treasurer of Majority Forward and a strategist for Senate Majority PAC (and would go on to become president); and Susan McCue was a director of Majority Forward and a co-founder and senior advisor to Senate Majority PAC.

That information was readily available to the tax agency, which also stopped short of asking Majority Forward to explain its political spending in the 2016 cycle — even though it clearly knew that Majority Forward was deeply linked to Senate Majority PAC, and it is not unheard of for the IRS to ask a nonprofit about reports they have filed with the FEC.

Majority Forward’s own application, filed in June 2016, said that the group anticipated spending nearly $20 million, in total, on all of its operations between June of 2016 to May of 2017. By December of 2016, when the IRS was following up with Majority Forward about its ties to one of the largest super PACs in existence, there were FEC filings showing outlays by the group of more than $10 million for ads directly asking voters to elect or defeat named candidates.

majority forwardBy even some of the loosest measures of political activity, these super PAC connections and high levels of direct political spending would be enough to call a social welfare organization’s primary purpose into question. And that total doesn’t even include an additional $2.4 million Majority Forward spent in New Hampshire supporting Maggie Hassan’s (D) successful challenge to incumbent Sen. Kelly Ayotte (R), because the spending for those “issue ads” was never reported to the FEC.

The IRS’ reluctance to probe further isn’t much of an anomaly. When it comes to politically active nonprofits that are big spenders in federal elections going as far back as 2008, only one has ever been denied status outright, the liberal Arkansans for Common Sense. In other instances where behemoths like Crossroads GPS have faced a possible denial, the IRS has proven that it was not up to the challenge of going toe to toe with the highly paid lawyers these groups are able to hire.

In response to a list of questions sent by the Center for Responsive Politics, Majority Forward representative Stephanie Potter said that “Majority Forward’s primary mission is to increase voter participation, and we ran a multi-million dollar nonpartisan voter registration effort last year across several states in service of that goal,” but did not respond to questions about the group’s political activity.

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In the service of social welfare, Democratic operatives get IRS seal of approval

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Opinions posted on TennesseeWatchman.com are those of the individual posters and do not necessarily represent the opinion of TennesseeWatchman.com or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.
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