Ethics Watchdog Calls for Probe of Maine Momentum
Updated: Oct 27, 2020
FACT Says Tax-Exempt Organization’s Attack on GOP Senator Violates Federal Law
Washington, D.C.—October 11, 2019—The non-partisan ethics watchdog, the Foundation for Accountability and Civic Trust (FACT), today, filed a complaint with the Internal Revenue Service (IRS) against Maine Momentum for violating federal law governing tax-exempt 501(c)(4) social welfare organizations.
The complaint maintains that Maine Momentum improperly advanced the Democratic Party’s interests by exclusively attacking Republican Senator Susan Collins, a candidate for reelection to the U.S. Senate in 2020.
Maine Momentum purports to operate as a social welfare organization and, as such, is expected to serve the public interest by promoting the social welfare of the general public as the tax law requires. However, a consistent pattern of activities and public admissions by Maine Momentum indicate that the group is operating for the substantial private benefit of the Maine Democratic Party and Maine’s 2020 Democratic candidates for Senate. In fact, the group has personally admitted that its “sole focus” is on the “advocacy and accountability and public education” of Senator Susan Collins, a candidate for reelection to the U.S. Senate in 2020, and her record in the U.S. Senate as part of a “multi-pronged strategy” by national Democratic political operatives to defeat Senator Collins in 2020.
Additionally, Maine Momentum’s leadership has strong ties to the Maine Democratic Party and to the frontrunner for the Democratic nomination for U.S. Senate, Sara Gideon. The timing of Maine Momentum’s formation within days of Sara Gideon declaring her candidacy for the U.S. Senate raises further suspicion that the group’s primary objective is to advance the interests of the Maine Democratic Party. Because of Maine Momentum’s brazen, singular attempt to elect a Democrat to represent Maine in the U.S. Senate, FACT is asking for an immediate investigation and, “if appropriate, revoke the organization’s status as a tax-exempt 501(c)(4) organization.”
According to FACT’s complaint, Maine Momentum’s actions fail to act in accordance with federal law requiring that social welfare organizations must be operated such that “no part of the net earnings of such entity inures to the benefit of any private shareholder or individual.” IRS guidance on this topic also notes that “[a]n organization that primarily benefits a private group of citizens cannot qualify for IRC 501(c)(4) exempt status.”
“Section 501(c)(4) of the Internal Revenue Code maintains the integrity of social welfare organizations, as well as citizens’ confidence in their efforts,” said Kendra Arnold, Executive Director, Foundation for Accountability and Civic Trust (FACT). “These organizations are supposed to promote the social welfare of the general public not engage in overtly partisan politics, and there are many facts in this case which bring into question Maine Momentum’s execution of this requirement,” added Arnold.
A full copy of the complaint can be found here.
FACT is a nonprofit organization dedicated to promoting accountability, ethics, and transparency in government and civic arenas. For more on FACT, visit: www.factdc.org