"Give my partisanship tax-exempt status or else I'll smear you!"
“Give me tax-exempt status or give me death!”

The Patrick Henry Center for Individual Liberty violated federal regulations by participating in political campaigns and has lost its tax-exempt status (PDF). Cue the right wing freakout, because this one hits close to home for some powerful conservatives.

Amongst other requirements, to be an organization described in Section 501 (c)(3), an organization must “not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.” Treas. Reg. § 1.501 {c){3)-1 (c){3) provides that if an organization engages in this conduct it is classified as an action organization,” which is an organization deemed to not have operated exclusively for tax-exempt purposes and thus is not an organization described in Section 501 (c){3). You operated as an action organization because you participated or intervened in political campaigns on behalf of and in opposition to candidates for public office by publishing and distributing statements. As such, we revoke our previous favorable determination as to your exempt status effective July 1.

Although the copy of the revocation letter obtained by USA Today is redacted, you can still tell that someone at the IRS took the seemingly-incredible step of researching the Patrick Henry Center on the internet for an hour, which will probably result in accusations that it was the victim of ‘targeting’ and ‘payback.’ But the Patrick Henry Center has long been one of the most transparently political nonprofits in America since at least 2004, when its founder — former FBI agent and Clinton-era “whistleblower” Aldrich Ames — took part in the “Swift Boat” smear against John Kerry. And just look at their connections:

The center’s most recent tax return disclosed $343,503 in revenue for tax year 2012. In recent years, it’s become aligned with the Tea Party movement, contributing to at least one of the groups targeted for extra scrutiny by the IRS beginning in 2010.  Also in 2010, the Patrick Henry Center merged with Liberty Central, an advocacy group headed by Virginia Thomas, the wife of Supreme Court Justice Clarence Thomas. Former U.S. Attorney General Edwin Meese serves on the center’s board.

Virginia Thomas was a headline participant in Groundswell, the right wing “30 front war” against progressives and the GOP establishment which brought the phony IRS scandal to Congress a year ago to provide a smokescreen for dark money nonprofits operating in clear violation of the laws. She is married to Supreme Court Justice Clarence Thomas, but her activism has created conflicts of interest for him in the past.

In late 2009, Thomas founded the political advocacy group Liberty Central, which would later become a fierce player in the opposition to health care form. Detractors pointed out that Liberty Central was a potential vehicle for people with interests before the Supreme Court to make anonymous donations that might influence her husband.

The group was formed with a $500,000 anonymous donation that came as the Supreme Court was considering Citizens United, a case that ultimately resulted in loosening the restrictions on corporate giving to political campaigns. The anonymous donor was later revealed to be Harlan Crow, the Texas real estate developer. Crow was also a friend of Clarence Thomas’, and he was later linked to a scandal involving the justice’s failure to publicly disclose gifts from the developer and trips aboard his private jet. (It didn’t help that Justice Thomas had also failed to include his wife’s $150,000 annual salary from Liberty Central on his financial disclosure forms, which he later had to amend.) In January 2011, the good-government group Common Cause asked the Justice Department to investigate whether Justice Thomas should have recused himself from Citizens United based on his wife’s role at Liberty Central. (Common Cause also asked the IRS to revoke Liberty Central’s nonprofit status. Nothing came of either request.)

While it is gratifying to see one sketchy nonprofit finally lose its tax-exempt status after flouting the laws so flagrantly and for such a long time, it hardly makes up for all the noise and distraction of the IRS “scandal” that Thomas and her friends contrived. Our exclusive research at BU has discovered conservative nonprofits not even trying to maintain the appearance of serving a social welfare purpose and operating with revoked licenses, and profiteering is so pervasive that even Allen West, another Groundswell headliner, says there ought to be a law about it. If the federal government ever did get around to cleaning up this industry, lots of people would be paying fines or doing time in prison — which is exactly why West and Thomas worked so hard to make sure that cleanup would never, ever happen. Accountability is not among their interests, as it would conflict with their interest in that succulent dark money.

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