The conservative advocacy organization Better Together New Mexico accused environmental group New Energy Economy on Monday of potentially illegal fundraising activity in violation of its charitable nonprofit status.
Better Together — which bills itself as a grassroots organization working to reduce government and protect individual freedom and free enterprise — filed a complaint with the Internal Revenue Service alleging that NEE lost its IRS status as a tax-exempt, 501(c)(3) organization in May 2022 after failing to file its tax returns for three consecutive years, from 2019-2021. Despite the revocation, NEE continued to solicit charitable donations without informing donators about its loss of IRS certification, according to the complaint.
Larry Sonntag of Better Together filed the IRS complaint, plus an additional complaint with the Attorney General’s Office alleging that NEE also failed to submit required annual charity reports for the last three years with the attorney general.
NEE is an advocacy group that promotes renewable energy development and consumer protection, participating in most Public Regulation Commission proceedings regarding Public Service Company of New Mexico and other utilities. It’s also a principal proponent of the new Local Choice Energy bill (SB 165), which would allow counties, municipalities and tribes to manage their own electric generation, taking that responsibility away from PNM and other companies.
“After the IRS revocation, NEE continued to solicit charitable donations as if nothing had changed,” Sonntag told the Journal.
The IRS reinstated NEE’s 501(c)(3) status in December, retroactive to May. But that doesn’t legally justify potentially fraudulent solicitation of tax-deductible donations from May-December, said Carla Sonntag, president and CEO of both Better Together and the New Mexico Business Coalition.
NEE executive director Mariel Nanasi said the IRS never informed NEE its status was temporarily revoked in May. The organization’s accountant did prepare a 2019 tax return, and the IRS approved an extension for NEE to file its 2020 and 2021 returns, Nanasi said. It’s unclear if the group’s accountant failed to file the 2019 return or if the IRS failed to process it.
An IRS letter to NEE dated June 10 — which Nanasi shared with the Journal — appeared to reaffirm NEE’s charitable status. But when NEE asked about its status in September, the IRS said to resubmit the 2019 tax return, which NEE did in October, leading to reinstatement in December.
“We never knew there was a problem,” Nanasi told the Journal.
Nanasi said Better Together has deliberately overblown the issue in coordination with PNM to derail NEE’s advocacy for the Local Choice Energy bill, which will get its first hearing in the Senate Conservation Committee on Thursday.
“When PNM and their associated front groups can’t win on the merits of Local Choice Energy vs. investor-owned-utility monopoly control, they stoop to make underhanded and inaccurate accusations,” Nanasi said in a statement. “They are trying to grab headlines and divert the Legislature’s and public’s attention.”
Better Together is independent and unrelated to PNM, said utility spokesman Ray Sandoval.
“PNM does not fund, control nor direct Better Together,” Sandoval said. “Presumably, like any other organization, Better Together’s own management makes decisions that it considers to be in the best interest of the organization.”
More from Kevin Robinson-Avila