Tax-exempt groups have political bent

Editor’s note: This is part of a series of occasional columns on groups attempting to shape public policy in New Mexico.

Two new tax-exempt “social welfare organizations” — one formed by Democrats and one by Republicans — popped up last week.

One of the groups is New Mexico Prosperity, which is run by a former director of the New Mexico Democratic Legislative Campaign Committee.

A leaked planning document for New Mexico Prosperity said the group and an affiliated political committee would be active in promoting progressive issues and in elections. (Note: A full version of the document is at the bottom of this story.)

The document listed some Democrats who would be supported and named Republican “targets,” including Gov. Susana Martinez. It said the group would coordinate with the state Democratic Party.

The second new social welfare organization is GOAL Advocacy, which is headed by a former staffer to Republican U.S. Rep. Steve Pearce of Hobbs and whose backers include Roswell oilman Mark Murphy, one of the deepest pockets in New Mexico for the GOP and its candidates.

GOAL Advocacy says it will promote conservative policies but won’t be active in elections.

The groups are operating under the Internal Revenue Code as social welfare, or 501(c)(4), organizations, which increasingly are being used by both the left and right as vehicles for public policy and political advocacy.

The groups are attractive to their operators and contributors in part for the same reason that they are disliked by open-government advocates: They don’t have to disclose their donors in most cases.

In addition, the Citizens United ruling by the U.S. Supreme Court in 2010 freed such organizations to raise and spend as much as they want on elections as long as they don’t coordinate with candidates.

501(c)(4)s were major players nationwide in the presidential and congressional elections last year, and they will play a role in the governor’s race and other elections next year in New Mexico.

Under the Internal Revenue Code, a 501(c)(4) must operate primarily to further the common good and general welfare of the people of the community.

As you might expect, what is the common good is in the eye of the beholder. Some 501(c)(4)s push a progressive agenda, others a conservative one. Examples: ProgressNow New Mexico, a critic of Gov. Martinez, and the Albuquerque Tea Party, which promotes limited government.

Under the Internal Revenue Code, a 501(c)(4) can advocate for or against candidates or ballot measures as long as political advocacy isn’t their primary purpose.

The groups can accept unlimited donations, but contributions aren’t tax-deductible and the organizations can be forced to pay taxes on expenditures it makes for political activities.

Other types of tax-exempt groups — most notably 501(c)(3)s — also have been active in the political arena in New Mexico in recent years.

Under the Internal Revenue Code, 501(c)(3)s can engage in so-called voter education, and Martinez and Democratic and Republican legislators have been targets of critical campaigns by such groups.

501(c)(3)s are prohibited from expressly advocating for candidates. They can accept unlimited tax-deductible donations and don’t have to disclose their contributors.

Bills have been introduced in the Legislature in recent years to force tax-exempt groups to disclose contributors under certain circumstances when they engage in political activity, but the legislation has never made it through both the House and Senate.

The increased use of 501(c)(4) as political machines has coincided with the emergence of so-called super PACs in elections, but the groups are different animals.

Super PACs are political committees, meaning they operate primarily to affect elections and, therefore, must disclose their contributors and expenditures.

Like 501(c)(4)s, super PACs, also known as independent-expenditure committees, aren’t bound by limits on donations and spending as long as they don’t coordinate with candidates.

New Mexico prosperity

The Santa Fe Reporter first reported last week on the creation of New Mexico Prosperity and the leaked planning document for the organization. The document is available at www.ABQjournal.com.

The document says the group will participate in a wide range of political activities in support of progressive issues and Democratic candidates and in opposition to Republicans, including Gov. Martinez, who is up for re-election next year.

The document says New Mexico Prosperity will coordinate with the state Democratic Party and other groups on the left, including ProgressNow New Mexico.

“This state is the latest to join the growing trend of big money being spent in state races, and now that the Pandora’s box has been opened, there is no shutting it,” the document says.

The document says New Mexico Prosperity will form a super PAC for all election activities, requiring the disclosure of contributors.

The director of the organization is Jon Lipshutz, former director of the New Mexico Democratic Legislative Campaign Committee, which supports Democratic candidates for the House.

Lipshutz says New Mexico Prosperity will advocate on behalf of public policies in several areas, including social justice, gun control, health care and rights for women, minorities, lesbians, gays and others.

He says the group won’t engage in candidate advocacy but that creation of a super PAC for that purpose “is certainly a possibility.”

Lipshutz declined to disclose any contributors.

The directors of New Mexico Prosperity include Jennifer Ford, who has served on the board of ProgressNow New Mexico and is a former state director of America Votes, a group that coordinates progressive issue advocacy and election campaigns across the country. Billionaire financier George Soros is a major contributor to America Votes.

GOAL advocacy

My Journal colleague Michael Coleman first reported last week on the formation of GOAL Advocacy.

Its executive director is Jason Heffley, former deputy chief of staff to Congressman Pearce.

Heffley says the group was formed by business and community leaders, mostly in New Mexico but some in West Texas. Murphy is on the board.

The organization will promote policies that create jobs and strengthen the economy but won’t get involved in elections, he says.

“This is a policy group,” Heffley says. “This is not a Republican Party thing. Obviously, we’re promoting conservative policies.”

GOAL Advocacy last week released radio and TV ads that it was airing. The TV spot introduces viewers to the group, and the radio ad opposes protection for the lesser prairie chicken under the Endangered Species Act.

The state Republican Party issued a news release promoting the radio and TV ads.

Heffley says the group will likely release the names of the major donors who sit on its board.

UpFront is a daily front-page news and opinion column. Comment directly to Thom Cole at tcole@abqjournal.com or 505-992-6280 in Santa Fe. Go to ABQjournal.com/letters/new to submit a letter to the editor.

Full document: New Mexico Prosperity