National Group Files Complaint Against Dark Money Michigan Nonprofit

Complaint Alleges That Michigan Citizens For Fiscal Responsibility Made False Statements To IRS About Its Political Spending

By CRAIG MAUGER
Michigan Campaign Finance Network

In a new complaint, a national ethics group says a shadowy Michigan nonprofit appears to have made false statements to the Internal Revenue Service (IRS) about its political spending.

Citizens for Responsibility and Ethics in Washington (CREW) filed a complaint today with the IRS that says the nonprofit Michigan Citizens for Fiscal Responsibility (MCFR) made $290,000 in contributions to two political action committees in 2014. However, in tax filings for 2014, Steve Linder, a GOP consultant and the president of MCFR, told the IRS the group hadn’t engaged in any “direct or indirect political campaign activities on behalf of or in opposition to candidates for public office.”

“The IRS should investigate MCFR and Mr. Linder and should it find they made false or incomplete statements on MCFR’s tax return, take appropriate action,” the CREW complaint says.

In addition to the IRS complaint, CREW also requested that U.S. Department of Justice and the Federal Bureau of Investigation look into whether MCFR and five other nonprofits located outside of Michigan broke the law by falsely representing their 2014 political spending.

As CREW notes, 501(c)(4) social welfare groups, like MCFR, are allowed to make political expenditures as long as political activity is not their primary focus and as long as they disclose political spending to the IRS.

“These groups have demonstrated a clear disregard for the law,” CREW Executive Director Noah Bookbinder said in a press release. “If the government does not act, it will send a signal to dark money groups that no laws or limits apply to them and it is open season for secret money in our elections.”

MCFR incorporated in Michigan in 2010. According to a 2014 filing with the state, its directors are Linder, who’s a partner in the Lansing-based Sterling Corp., Bob LaBrant, senior counsel for the Sterling Corp., and Denise DeCook, whom the Sterling Corp. hired in 2014. The filing says the nonprofit’s mission is to “inform and educate the public on fiscal policy issues.”

The Sterling Corp. has done extensive consulting work for Michigan Senate Republicans and other lawmakers over the years, according to campaign finance records.

CREW says in 2014, MCFR gave $155,000 to a federal Super PAC named Hardworking Americans Committee, which is connected to another Michigan-based GOP consultant, Stu Sandler, and $135,000 to the Republican State Leadership Committee, which has a mission of electing state-level Republican officeholders.

MCFR reported raising $1.39 million in 2014 but because it’s a nonprofit organization, it doesn’t have to disclose its donors.

In addition to his role with MCFR and Sterling, Linder is also president of the nonprofit Michigan Jobs and Labor Foundation, another group that doesn’t have to disclose its donors. Like MCFR, the Michigan Jobs and Labor Foundation told the IRS that for 2014, it didn’t engage in direct or indirect political campaign activities on behalf of candidates or in opposition to them.

That’s despite the fact that after getting in trouble with the Michigan Secretary of State, the Michigan Jobs and Labor Foundation reported giving $17,696 to a Michigan Super PAC for 2014. According to campaign finance records, that money was used on ads supporting GOP Senate candidates Ken Horn (R-Frankenmuth) and Dale Zorn (R-Ida). Read about that situation here.

The Michigan Jobs and Labor Foundation agreed to pay a $17,696 fine from the Michigan Secretary of State's Office earlier this year.

You can read CREW’s full complaints and report here.

As Jordan Libowitz, of CREW, explained, because of taxpayer confidentiality requirements, it's uncertain whether the public will ever know what the IRS does in response to the complaint.

Linder didn't immediately respond to a request for a response to the CREW complaint.

 

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