Opinion

The IRS Needs To Hold David Brock Accountable For Potential Violations

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Posted: May 01, 2020 12:01 AM
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The IRS Needs To Hold David Brock Accountable For Potential Violations

Source: AP Photo/Susan Walsh, File

In 2013, the Patriots Foundation was established to serve as a government watchdog, with the hope to promote a more open and transparent government, while also monitoring the activities of policymakers and entities that influence our elections.  Holding these various groups accountable is not only core to our mission, but necessary for the health and wellbeing of our country.  

Last week, the Patriots Foundation filed three complaints with the Internal Revenue Service (IRS) against nonprofit organizations tied to David Brock, a powerful liberal political consultant.  While Mr. Brock is well-known in political circles, most Americans don’t know him, or appreciate the amount of influence he has in American politics through the four nonprofit organizations he is affiliated with; Media Maters for America, American Bridge 21st Century Foundation, Franklin Educational Forum, and Franklin Forum.   

Our complaints outlined how Mr. Brock’s nonprofit network worked to circumvent tax laws and exploit his organizations’ tax-exempt status for his personal and political benefit.  

Some of the most egregious activities by these Brock-affiliated groups were conducted by American Bridge 21st Century Foundation, which funneled over $2.7 million in tax-exempt dollars to Mr. Brock’s private for-profit venture, and provided an interest-free loans worth over $900,000 to an unnamed individual. These are serious allegations involving IRS rules that outlaw the use of tax-exempt funds for personal, private benefit.  No one could argue that Mr. Brock’s for-profit organization and this unnamed individual did not benefit from receiving tax-exempt funds of this magnitude, let alone not having to pay interest on the loans.  

It also appears that Mr. Brock’s organizations operated a scheme to transfer tax-exempt funds from the Franklin Education Forum, which is a 501(c)(3), to the Franklin Forum, which is a 501(c)(4).  Money donated to a 501(c)(3) cannot be used for political purposes, but donors may take a charitable tax deduction.  This is what happened with Brock’s Franklin Education Forum 501(c)(3) for several  years, but then they transferred the money to the Franklin Forum 501(c)(4), which is allowed to engage in limited political activity.  In the process, Mr. Brock  allowed his donors to take charitable tax deductions on contributions they could not have taken had they contributed directly to the 501(c)(4).  If those donors wanted to support the mission of the Franklin Forum, they need to donate directly to it, and not take a charitable tax deduction for a donation that can’t be used for political advocacy. 

As expected, when asked for comment about Patriot Foundation’s complaints, Bradley Beychok, the president of American Bridge, said the complaint was “fake and intentionally misleading.”  Beychok also said that we had, “chosen to purposely mislead the public in order to further its right-wing agenda.” 

First and foremost, the complaints are simple and straight forward.  Second, the Patriots Foundation does not have a political agenda.  A quick glance of my career would show that I’ve probably been harder on Republicans than Democrats.  However, in these politically charged times, I am not surprised that the initial reaction was to point the finger at those who have raised serious questions about how these organizations operate.

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Ultimately, it doesn’t matter what Mr. Brock or Mr. Beychok think of these complaints.  All the Patriots Foundation is asking is that the IRS take a serious look at how these organizations are being operated. 

What gets lost often times when allegations of wrongdoing or the misuse of tax-exempt monies are levied is that it takes someone or an organization like the Patriots Foundation to investigate these organizations in order for them to be held accountable.  While at times it can be confused with more partisan bickering, this is exactly how the system to regulate these organizations was designed to work.  

What needs to happen now is a thorough investigation by the IRS to determine if Mr. Brock and his network of organizations are using the funds they are raising in these various entities in an appropriate manner.  

Craig Robinson is the founder of The Patriots Foundation. He is the former political director for the Iowa Republican Party.