Watchdog Calls on IRS and State Agencies to Investigate Ned Ryun and American Majority for Financial Impropriety
FOR IMMEDIATE RELEASE: July 30, 2020
Contact: Michael Clauw, mclauw@campaignforaccountability.org, 202.780.5750
WASHINGTON, D.C. – Today, Campaign for Accountability (CfA), a nonprofit watchdog group focused on public accountability, submitted a complaint to the IRS, the Wisconsin Department of Financial Institutions, and the Office of the Attorney General of California calling for an investigation into whether the 501(c)(3) nonprofit American Majority Inc (AM) and its related 501(c)(4), American Majority Action Inc (AMA), violated their tax exempt status and federal and state laws by spending more than 50 percent of expenses on political purposes, submitting inaccurate information to regulators, and executing inappropriate transactions with related parties.
CfA Executive Director Daniel E. Stevens said, “Ned Ryun claims that American Majority and American Majority Action are nonprofits working for the public interest. A close reading of their tax returns suggests, however, that these groups may be violating tax law and improperly funneling money to Mr. Ryun. State and federal regulators should investigate whether Mr. Ryun’s management of these nonprofits is violating the law.”
American Majority was founded in 2007 by former presidential writer Ned Ryun as “the nation’s premier conservative training organization.” The following year, Mr. Ryun established AMA as a partner 501(c)(4) organization to serve as “a national conservative organization dedicated to engaging citizens in the political process by mobilizing them in support of candidates who favor limited government, individual freedom and protecting the free market.” Since founding these organizations, Mr. Ryun has steadily built his public profile, and he appears regularly on conservative television programs including Tucker Carlson Tonight. Since they were founded, AM and AMA have raised more than $27 million in grants and contributions.
As a 501(c)(4) nonprofit, AMA is prohibited from spending more than 50 percent of its yearly expenditures on political activities. In 2016, though, AMA spent $350,000 – nearly 85% of its funds – on “direct or indirect political campaign activities” out of a total of $414,059.
Additionally, the 501(c)(3) arm, AM, appears to have reported inaccurate donor information on its 2016 and 2015 tax returns. In 2016, AM received $500,000 from the Donors Capital Fund, and in 2015, AM reported a $500,000 contribution from former Federalist Society executive vice president, Leonard Leo. Despite claiming these contributions came from separate sources, a subsequent audit suggests that this money came from the same donor.
AM and AMA also appear to have inappropriately transferred money between the two organizations. For example, in fiscal year 2011, AMA reported receiving a $34,000 contribution from AM, yet AM failed to disclose the donation on its annual 990 tax return.
AM and AMA have engaged in questionable transactions with outside groups as well. Between 2011 and 2014, AM and AMA awarded grants to and issued loans of more than $750,000 to AM Action LLC, which purchased a 30 percent stake in another firm, Political Gravity LLC, which appears to have been founded by Ned Ryun’s brother, Andrew Ryun. AM also purchased $100,000 worth of assets from Political Gravity, and in 2012, purchased a 5 percent ownership stake in firm. Notably, Andrew Ryun served on AM’s board when this transaction occurred.
AMA and AM have also invested in Voter Gravity LLC, a for-profit data analytics firm started by Ned Ryun, which still pays him a salary. In 2018, Mr. Ryun’s total compensation from the two nonprofits and Voter Gravity was $184,250. Between 2015 and 2018, AMA issued loans to Voter Gravity totaling nearly $900,000. Mr. Ryun’s firm was a money losing operation: in 2015 AMA reported negative income for Voter Gravity of nearly $1.9 million.
Mr. Stevens continued, “Mr. Ryun appears to have built a network of organizations designed to funnel money to his for-profit companies and pay himself a salary. State and federal regulators should not allow Mr. Ryun to take advantage of nonprofit tax laws designed to support organizations that benefit the public not private individuals.”
Campaign for Accountability is a nonpartisan, nonprofit watchdog organization that uses research, litigation, and aggressive communications to expose misconduct and malfeasance in public life and hold those who act at the expense of the public good accountable for their actions.