Politics

Podesta Group Plotted To ‘Inflate’ Spending To Get Around IRS Rules, Help ACORN

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Luke Rosiak Investigative Reporter
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A political group overseen by Democratic nominee Hillary Clinton’s national campaign chairman John Podesta plotted to “inflate” the reported primary spending of liberal activist nonprofit groups by laundering funds through them in a way that would help them meet IRS rules.

The money was meant to wind up ultimately with ACORN, the radical left-wing activist group that filed bankruptcy in 2010 after Project Veritas videos exposed employees of the non-profit aiding a pimp and his prostitute.

Shortly thereafter, Congress defunded ACORN, which had also been perennially involved in what critics described as fraudulent voter registration drives and election-day get-out-the-vote campaigns.

“We have several organizations in the movement who are c4s with MCFL status. Our c4 is one, VoteVets is another, [League of Conservation Voters] and a few others,” wrote Fund for America’s Tom Matzzie to members of the board of directors, including Podesta, in a Dec. 21, 2007, email. The email was made public Sunday by Wikileaks.

“We have a really important need to inflate the primary purpose spending for those groups. The best way to do that would be to use 2-3 of the groups to receive all of the c4 money and then have them re-grant it to other c4s–ACORN, etc.,” Matzzie said.

According to the Federal Election Commission, MCFL status refers to “limited exception to the general prohibition on corporate expenditures” for groups that meet certain criteria, including being a “social welfare” organization.

According to the IRS, “section 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity.” Spending less than 50 percent of a group’s budget on an activity is viewed as secondary.

The liberal groups named by Matzzie apparently were engaging in significant political activity, so the Podesta group’s staff strategized to raise the non-political spending so that the political spending would appear to fall below 50 percent.

However, it did so, not with actual non-political spending, but rather by intentionally routing or laundering the money through multiple groups before it reached its final destination. This allowed so that multiple groups could count the non-political dollars towards making politics appear to be only a secondary purpose.

Liberals often criticize social welfare organizations that appear to be very interested in politics as the Koch brothers and other conservative enemies subverting tax rules.

The Associated Press reported that the Fund for America was set up “by John Podesta, a former chief of staff for President Clinton; Anna Burger, the secretary-treasurer of the Service Employees International Union; and Rob McKay, a California philanthropist.”

“Among its donors are multimillionaire financier George Soros, who gave it $2.5 million last year, and the SEIU, which also contributed $2.5 million last year, according to Fund for America’s IRS records. The fund has helped finance another new nonprofit group, the Campaign to Defend America, which already has run anti-McCain ads.”

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