In an April 2015, in an email exchange with John Podesta, Hillary Clinton’s campaign chairman, Clinton’s campaign finance director, Dennis Cheng, reflected his ignorance of the laws against using the offices of an advocacy group by asking if the campaign could use the offices of the Center for American Progress (CAP), for a finance briefing. Podesta, who founded CAP, a 501c3 organization, ignored the fact that campaign laws prohibit such an action, only replying, “Too small.”
The Center For American Progress, a leftist public policy research and advocacy organization which fights on the behalf of the Democratic Party and leftist causes, was founded in 2003 by Podesta. On its website, the organization states: “The Center for American Progress is an independent nonpartisan educational institute under section 501(c)(3) of the Internal Revenue code.”
The organization has been accused in the past of taking money from corporate donors without disclosing it.
CAP, as a 501(c)(3) nonprofit organizations, cannot engage in political campaigning. An organization violating this law could lead the IRS to completely revoke the organization’s tax-exempt status or impose excise taxes on the organization. As the IRS states:
Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.
Certain activities or expenditures may not be prohibited depending on the facts and circumstances. For example, certain voter education activities (including presenting public forums and publishing voter education guides) conducted in a non-partisan manner do not constitute prohibited political campaign activity. In addition, other activities intended to encourage people to participate in the electoral process, such as voter registration and get-out-the-vote drives, would not be prohibited political campaign activity if conducted in a non-partisan manner.
On the other hand, voter education or registration activities with evidence of bias that (a) would favor one candidate over another; (b) oppose a candidate in some manner; or (c) have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention.