Lois Lerner, the senior IRS official at the center of the decision to target tea party groups for burdensome tax scrutiny, signed paperwork granting tax-exempt status to the Barack H. Obama Foundation, a shady charity headed by the president’s half-brother that operated illegally for years.
According to the organization’s filings, Lerner approved the foundation’s tax status within a month of filing, an unprecedented timeline that stands in stark contrast to conservative organizations that have been waiting for more than three years, in some cases, for approval.
Lerner also appears to have broken with the norms of tax-exemption approval by granting retroactive tax-exempt status to Malik Obama’s organization.
The National Legal and Policy Center filed an official complaint with the IRS in May 2011 asking why the foundation was being allowed to solicit tax-deductible contributions when it had not even applied for an IRS determination. In a New York Post article dated May 8, 2011, an officer of the foundation admitted, “We haven’t been able to find someone with the expertise” to apply for tax-exempt status.
Nevertheless, a month later, the Barack H. Obama Foundation had flown through the grueling application process. Lerner granted the organization a 501(c) determination and even gave it a retroactive tax exemption dating back to December 2008.
The group’s available paperwork suggests an extremely hurried application and approval process. For example, the group’s 990 filings for 2008 and 2009 were submitted to the IRS on May 30, 2011, and its 2010 filing was submitted on May 23, 2011.
Lerner signed the group’s approval [pdf] on June 26, 2011.
It is illegal to operate for longer than 27 months without an IRS determination and solicit tax-deductible contributions.
The ostensibly Arlington, Va.-based charity was not even registered in Virginia despite the foundation’s website including a donation button that claimed tax-exempt status.
Its president and founder, Abon’go “Roy’ Malik Obama, is Barack Obama’s half-brother and was the best man at his wedding, but he has a checkered past. In addition to running his charity, Malik Obama ran unsuccessfully to be the governor of Siaya County in Kenya. He was accused of being a wife beater and seducing the newest of his twelve wives while she was a 17-year-old school girl.
Sensing something wrong when he and a group of Missouri State students visited Kenya in 2009, Ken Rutherford, winner of the 1997 Nobel Peace Prize for his work on banning landmines, determined that Malik Obama was an “operator” and elected to give a donation of 400 pounds of medical supplies to a local clinic instead.
“We didn’t know what he was going to do with them,” Rutherford told the New York Post in 2011.
It is also not clear what the Barack H. Obama Foundation actually does. Its website claims the organization has built a madrassa and was building a imam’s house but there is no other evidence that the nonprofit was actually helping poor Kenyan children.
“The Obama Foundation raised money on its web page by falsely claiming to be a tax deductible. This bogus charity run by Malik had not even applied and yet subsequently got retroactive tax-deductible status,” Ken Boehm, chairman of the National Legal and Policy Center, told The Daily Caller. Boehm described Malik Obama’s attempt to raise money as constituting “common law fraud and potentially even federal mail fraud.”
Boehm doubted that the charity is doing what it says it’s doing and wondered why the charity was given tax-exempt status so quickly after the evidence of wrongdoing came to light.
“How do you get retroactive tax-exempt status when you haven’t even applied to get it in the first place?” Boehm said.
Lerner continues to draw fire for her handling of the IRS targeting of conservative and citizen groups, but her colleagues have started to defend her, alleging that she behaves “apolitically.”
Larry Noble, who served as general counsel at the FEC from 1987 to 2000, hired and promoted Lerner. “I worked with Lois for a number of years and she is really one of the more apolitical people I’ve met,” Noble told The Daily Beast. “That doesn’t mean she doesn’t have political views, but she really focuses on the job and what the rules are. She doesn’t have an agenda.”
Lerner could not be reached for comment. Calls to the Barack H. Obama Foundation went directly to the organization’s voicemail and were not returned.