Donor funds may be illegal Tax-exempt groups on contributor list to Snowden campaign

Federal prohibitions

Campaign says staff not accountable for sources' status

July 09, 1996|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF Sun staff writer James Bock contributed to this article.

Two nonprofit organizations have made campaign contributions to the Committee to Elect Carl O. Snowden for Mayor of Annapolis, an apparent violation of federal tax laws.

Kunta Kinte Celebrations, Inc. and Banneker-Douglas Museum Foundation, which contributed a total of $315, are registered tax-exempt organizations that are prohibited from participating in any political activity, according to the Internal Revenue Service.

A third contributor, the Anne Arundel branch of the NAACP, is a nonprofit group that is not prevented by law to participate, but is discouraged by its national organization from endorsing or contributing to any political candidate, said Dennis Courtland Hayes, general counsel to the National Association for the Advancement of Colored People.

"We're nonpartisan," Hayes said. "We don't endorse candidates. That's policy."

The Anne Arundel branch contributed $100 to the campaign, according to Snowden's campaign financing report, released last week.

Organizations classified under section 501(c3) under federal tax laws are charitable, religious, educational or scientific organizations that get the bulk of their funding from public contributions, according to Dom LaPonzina, chief of communications for the IRS.

"That means the organization does not participate in, or intervene in any political campaign on behalf or in opposition to any candidate for public office," he said. "They cannot endorse any candidate for political office, they cannot make donations to their campaign and they cannot engage in fund raising for the candidate."

An organization that continues such contributions could lose tax-exempt status, he said.

The issue came up when Snowden, a Ward 5 Democrat who has not officially declared his candidacy for mayor, released his campaign finance report last Monday to announce that he had raised more than $62,000 in contributions.

Since then, Snowden's campaign treasurer and chairman have been under fire for contributing in excess of $2,500 each to his campaign, a possible violation of Annapolis election laws. The city Board of Elections is looking into the contributions, according to Richard Israel, board chairman.

Snowden, who denied any wrongdoing by his campaign staff, said the contributions made by Banneker Douglas and the NAACP paid for advertising in a souvenir booklet at his birthday salute fund-raiser. All checks received for the ads went directly into his campaign fund, he said.

Officials from the Kunta Kinte organization say the $275 check, written in June for Snowden's birthday fund-raiser, was a mistake made by 11 board members who attended the event.

"Unfortunately, some of our board members pitched in money to Kunta Kinte and wrote one check from the fund for the birthday event," said T.E. Arthur, chairman of the board of directors. "They shouldn't have done that. It was a mistake."

Arthur said the group will ask Snowden's committee for a refund of the Kunta Kinte check so that each board member can submit a personal check. He also said he planned to ask the committee to file an amendment to its finance report to correct the error.

Officials from Banneker-Douglas Museum did not return repeated phone calls yesterday to explain a $40 check written to the committee in June.

Gerald Stansbury, president of the Arundel NAACP chapter, could not be reached for comment.

Snowden said he could not be held responsible for monitoring contributions made to his campaign committee. He said there is "no mechanism in place" to determine whether organizations making contributions are prohibited from participating.

"Our campaign has received nearly 600 monetary donations totaling $44,000," Snowden said in a statement. "Recent inquiries by The Sun suggest that three checks totaling $390 may be questionable. It is our contention that our campaign responsibility is to fully disclose all contributions and we have done that.

"After consulting with campaign treasurer, Mr. Alan H. Legum, and several other attorneys that specialize in the area of 501(c3) law, I am confident that our campaign has met its legal obligation under federal and local laws."

While monitoring contributions can be difficult, "a candidate can never be too careful with his or her finances," said Deborah Povich, executive director of Common Cause Maryland, a citizens lobby group that works for open and accountable government.

"A candidate cannot legitimately divorce themselves from their committee," Povich said. "They, whether it's the committee or the candidate, would want to be careful not to exceed the limit that a donor can give and they would want to be careful not to accept a donation from an entity that was not allowed to make one.

Snowden said the organizations that made the contributions should be held responsible.

But Povich disagreed.

"If a candidate exploring a run for an executive office like mayor cannot monitor thousands of dollars in contributions, how do they expect to oversee a city budget of millions?"

Pub Date: 7/09/96

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