Watchdog Files IRS Complaint Against Nonprofit Behind News-For-Hire Scheme
FOR IMMEDIATE RELEASE: June 10, 2021
Contact: Michael Clauw, mclauw@campaignforaccountability.org, 202.780.5750
WASHINGTON, D.C. – Campaign for Accountability (CfA) filed a complaint with the IRS today calling on the agency to investigate possible tax code violations by the non-profit Renew American Prosperity (RAP) for insider dealing with an affiliated for-profit company, the public relations firm Tigercomm, LLC. A recent Washington Post investigative report detailed how RAP, and the news-for-hire site it funds, the Checks & Balances Project, serve as vehicles for Tigercomm to launch attacks on behalf of the firm’s clients.
CfA Executive Director Michelle Kuppersmith said, “CBP has spent years attacking energy companies at the behest of the solar industry and now its going after a non-proft healthcare system. The only connection is Tigercomm. While Tigercomm was free to set up a 501(c)(4) group, there is no exception to IRS regulations for PR firms running front groups. Renew American Prosperity clearly has run afoul of the law and the IRS should investigate.”
While The Washington Post reported that the taxpayer-funded Eastern Virginia Medical School (EVMS) paid Tigercomm at least $150,000 to attack Sentara Healthcare, its single largest donor because it opposed governance changes pushed by Sentara, additional records show that EVMS is in the process of paying Tigercomm just shy of $500,000. According to the Post, CBP began attacking Sentara shortly before EVMS made its first payment to Tigercomm.
For nearly four years, CfA has investigated how Tigercomm, RAP, CBP and another fake nonprofit, the Energy and Policy Institute have manipulated the press and public to benefit Tigercomm’s clients.
While nonprofits are permitted to hire private businesses, it appears that RAP is an alter-ego of Tigercomm, formed and operated to finance Tigercomm’s campains. Tax forms reveal RAP paid Tigercomm $1.2 million – 70 percent of its total revenue – in “management” fees between 2015 and 2018. Further, RAP and Tigercomm share the same business address, which is also the home address of Tigercomm’s president, whose wife has served as RAP’s bookkeeper.
According to the Internal Revenue Code, nonprofit organizations are prohibited from providing benefits to individuals or organizations “in a position to exercise substantial influence over the affairs” of the non-profit.
In addition to the IRS complaint, CfA also filed a complaint with the District of Columbia Office of the Attorney General. That complaint alleges RAP’s board, which appears never to have met, has failed to meet its fiduciary obligations to provide governance oversight to the organization.
Ms. Kuppersmith continued, “Nonprofits are supposed to serve the public good, not private business. RAP, however, seems to be just another alter ego of Tigercomm. The IRS and the DC Attorney General should hold RAP, its board, and Tigercomm 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.