Tuesday, September 23, 2008

Hillary Clinton Does Not Equal Sarah Palin for 501(c)(3) Campaign Intervention Purposes

An interesting post over on MSNBC describes how a tax exempt Conference of Presidents of Major Jewish Organizations "disinvited" Vice Presidential candidate Sarah Palin from yesterday's anti-Iranian UN protest for fear that the organization would be accused of improper campaign intervention.  The organizers, a prominent member of whom is a Palin campaign advisor according to MSNBC, had also invited Senator Hillary Clinton a long time ago (perhaps based upon their own prediction of the primary races).  "Unnamed sources" say Clinton backed out once she found out that Palin was scheduled to speak.  Whatever.  But this is a good "teaching point" for those of you teaching tax exempt organizations this semester.  Why is Clinton not equal to Palin for 501(c)(3) purposes?  The answer is somewhere in the black hole definition of "candidate:"

The term "candidate for public office" means an individual who offers himself, or is proposed by others, as a contestant for an elective public office, whether such office be national, State, or local. Activities which constitute participation or intervention in a political campaign on behalf of or in opposition to a candidate include, but are not limited to, the publication or distribution of written or printed statements or the making of oral statements on behalf of or in opposition to such a candidate.

Treas. Reg. 1.501(c)(3)-1(c)(3)(iii).  Isn't Clinton, like all democrats and republicans not nominated this year, already running for office next time?  Let's face it, the whole lot of them are perpetual candidates!  Consider the Joint Committee's definition of a "candidate:"

Clear standards do not exist for determining precisely at what point an individual becomes [or is no longer] a candidate for purposes of the rule.  On the one hand, once an individual declares his candidacy for a particular office, his status as candidate is clear.  On the other hand, the fact that an individual is a prominent political figure does not automatically make him [or her] a candidate, even if there is speculation regarding his possible future candidacy for particular offices.

Joint Committee on Taxation, Lobbying and Political Activities of Tax Exempt Organizations, 54 (1987).  I think the same reasoning might apply to hold that just because an individual has conceded a race for political office does not make her a "non-candidate."  According to the blog, Hot Air, Democrats used the the "improper campaign" alarm to cause the exempt organization to pull the rug out from under the pitt bull in lipstick.  I've no doubt this is true, as politics is a rough business and too often the Democrats have played nicey-nice (thas' just my own opinion, mind you!).  On the other hand, Commentary's Blog claims Palin was disinvited along with all other politicians because Biden turned down an opportunity to appear as well. 

Be that as it may.  In any event, would Palin's presence -- unbalanced by the presence of a democrat of her stature [or, dare I say, lack thereof] necessarily mean that the organizers are engaging in improper campaign intervention?  I don't think Palin's presence at the event would have constituted intervention if only a few well placed disclaimers were used and posted around the event (or on the Web page advertising the rally), particularly if an invitation had been made to Biden as well.  Where are the aggressive tax exempt advisor-types?  But then again, I am not so risk averse as other advisors to exempt organizations.



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