Exempt from tax, busy in politics Empower America, founded by Kemp, seeks electoral clout

August 31, 1996|By Jim Haner, Marego Athans, Michael James | Jim Haner, Marego Athans, Michael James,SUN STAFF

A Washington think tank set up by Republican vice-presidential candidate Jack Kemp is among a growing number of political groups trying to use tax-exempt status, once reserved for groups like the Lions Clubs and Rotary chapters, to gain influence over voters.

Known as Empower America, the organization has emerged as a driving force behind the Republican presidential nominee Bob Dole's message of racial inclusion, rock-bottom taxes and homespun values. Empower America's co-founder Bill Bennett, the former education secretary and best-selling author, was just named a national vice chairman of the Dole campaign this week.

Once certified as civic groups by the Internal Revenue Service, Empower America and other similar nonprofit organizations can evade more stringent rules of the Federal Election Commission that limit how much money candidates may accept from a single contributor. And they duck laws that require political organizations to disclose where their money comes from and where it goes.

"It's the great untold story of the 1996 campaign," said Gregory L. Colvin, a San Francisco lawyer, author and expert on nonprofits. "The news media are mainly focused on what the candidates and the campaigns are doing, but not on groups that are going to influence the election."

Tony Trimble, Empower America's lawyer and a Republican operative from Minnesota, insists that his organization is an intellectual conclave that's "open to anybody who wants to join." And he's disturbed that the IRS has failed to recognize it as such.

"The IRS, whether for internal political reasons or policy reasons, is apparently giving it a higher level of scrutiny," Trimble said. "I have to say we are surprised it has taken this long."

A review of Empower America's activities during the past three years, while it waits for the IRS ruling, shows partisan activity.

For example, Empower America has boasted on the Internet that it ran 88 radio ads in New Hampshire promoting a flat tax in the months leading up to the Republican presidential primary there.

At the time, Empower America co-founder Malcolm S. "Steve" Forbes Jr. was gearing up to run for president on a flat tax platform.

The group's incorporation papers say its purpose is "to advance a conservative reform agenda" by educating the public on such heady topics as government policy, global strategy and leadership. The group calls itself a nonprofit in corporate filings and elsewhere, leading media organizations to refer to it as a tax-exempt group.

Since 1989, according to FEC records, its board and staff have made personal contributions of more than $1.8 million to Republican candidates and committees nationwide, and less than $50,000 to Democrats.

A spokeswoman for Kemp said he has taken a leave of absence from the group since joining the Republican ticket and would not comment on Empower America.

"It doesn't have anything to do with this campaign," said Kim McCrery, Kemp's deputy press secretary. "Questions about their legal status and financing should be directed to them."

No advocating for candidates

Tax-exempt groups generally are prohibited from advocating for or against particular candidates in federal elections. It amounts to taxpayer-subsidized propaganda that could skew the process favor the biggest bankroll, tax experts say.

But Congress has only armed the IRS with a loose set of guidelines to enforce this mandate. Critics charge that the law -- Section 501C(4) of the U.S. Tax Code -- has been left intentionally vague.

Pioneered by conservative-leaning groups more than a decade ago, the strategy is now being pursued by organizations from the Christian Coalition and the National Rifle Association to those on the left -- among them the AFL-CIO and the National Abortion and Reproductive Rights Action League.

"They're functioning as shadow campaigns," said Lisa E. Rosenberg of the Center for Responsive Politics, an election monitoring organization.

Few have matched Empower America's level of sophistication.

Records show that the group is a private corporation engaged in fund-raising, training politicians in conservative ideology at paid "candidate schools" and running a computer-driven phone bank that transmits quotes to conservative radio talk shows nationwide.

It also has amassed a mailing list of contributors that it rents to campaigns through private list brokers. Royalties have generated almost $500,000 in profit for Empower America over the past three years, records show.

While Empower America claims to be politically neutral, federal campaign finance records leave little doubt about the sympathies of its members.

Records show that members of the board, staff and others have given Empower America more than $18.6 million since 1993 -- bankrolling the travel and public speaking schedules of Kemp, Bennett and their fellows.

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