Watchdog Calls on IRS to Investigate Anti-Choice Group Susan B. Anthony List for Enriching its Directors and Lying to Federal Officials
FOR IMMEDIATE RELEASE: May 28, 2019
Contact: Bryan Dewan, firstname.lastname@example.org, 202.780.5750
WASHINGTON, D.C. – Today, Campaign for Accountability (CfA), a nonprofit watchdog group focused on public accountability, called on the IRS to investigate the anti-abortion advocacy group Susan B. Anthony List, Inc. (SBA List), for, among other things, abusing its nonprofit status, misleading the IRS, overpaying its outside fundraisers, and failing to disclose payments to firms owned by its corporate directors.
CfA Counsel Alice Huling said, “Susan B. Anthony List’s mission is to support anti-choice candidates, but its federal disclosures suggest the organization prioritizes enriching its board members and contractors. The IRS should investigate SBA List and revoke its tax-exempt status.”
SBA List is registered with the IRS as a 501(c)(4) nonprofit, maintains a related 501(c)(3) organization, the Charlotte Lozier Institute Legal Defense Fund, as well as three political action committees (PACs) that are registered with the Federal Election Commission (FEC). The PACs include a regular PAC, Susan B. Anthony List Candidate Fund, and two super PACs, Women Speak Out PAC, and Susan B. Anthony List Action PAC. While 501(c)(4) organizations such as SBA List are allowed to participate in political activities, advocating the election or defeat of particular candidates cannot be a group’s primary purpose.
SBA List, however, is devoted entirely to electoral politics. Its mission is to elect anti-choice politicians, and a significant portion of the money that flows through SBA List’s amalgam of entities is used for political purposes. Moreover, donations to SBA List increase dramatically during election years.
When SBA List applied to become a 501(c)(4) nonprofit in 1997, the organization appears to have included numerous inaccurate statements on its 1024 application form. SBA List did not provide complete information about its board of directors, failed to disclose its plans to operate a PAC, and, most flagrantly, said that it did not “plan to spend any money attempting to influence the selection, nomination, election, or appointment of any person to any Federal, state or local office.” SBA List also claimed on its application that it was not an outgrowth of any other organization, yet it was a reincarnation of an organization originally incorporated under the same name in Minnesota in 1992.
Beyond its initial application, SBA List has continued to file inaccurate information with either the IRS, the FEC, or both. Nonprofits are required to submit their political spending to the IRS, and PACs must report their spending to the FEC. Since 2009, SBA List’s entities have reported inconsistent amounts to the IRS and the FEC totaling nearly $2 million.
To raise money for its political activities, SBA List relies on outside fundraising companies including one firm, InfoCision, which has been fined and sued for fundraising malpractice. Between 2009 and 2017, SBA List contracted with at least three fundraising firms, including InfoCision, that raised a total of $189,415 for the organization. SBA List, however, received just $7,485 from the firms or 3.9 percent of the total amount raised.
Finally, SBA List’s payments to certain individuals and organizations affiliated with the nonprofit may have violated tax laws designed to prevent nonprofits from lining the pockets of their directors. For instance, SBA List’s 2017 Form 990 reports the group pays its former treasurer Frank Cannon more than $200,000 in salary for full-time consulting work. At the same time, Mr. Cannon supposedly works for another nonprofit called the American Principles Project (APP) and its related foundation, receiving a salary of more than $170,000. Notably, the chairman of APP’s board is hedge fund manager Sean Fieler, who also serves on the board of SBA List. In 2017, SBA List hired Mr. Fieler’s for-profit company, Political Social Media, to build an app for the organization. SBA List failed to disclose this relationship on its tax filings.
Additionally, SBA List paid other vendors that have ties to SBA List’s executives. For instance, SBA List has employed an IT firm, Direct Technology Solutions, which is owned by its treasurer, Robert Kania. Mr. Kania was recently removed from his position on the board of the Port Authority of Allegheny County after CfA filed a complaint against him for violating Pennsylvania campaign laws. SBA List failed to disclose the payment to Mr. Kania’s firm on its tax filings, potentially violated the tax code’s prohibition against private inurement.
Ms. Huling continued, “SBA List relies on the goodwill of its supporters to raise money for anti-choice candidates, yet the organization uses contributions to line the pockets of its for-profit fundraising firms and board members. Donors to SBA List should know that their money is being used to enrich hedge fund managers and shady telemarketing firms. Federal officials need to put an end to this abuse and hold SBA List accountable.”
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.