Thursday, June 23, 2022

Nonprofits, PACs and Political Spending

From: source unknown

Postscript to the look at spending for the recent Richardson ISD election for board of trustees. There was a new player involved in the money race that I didn't mention, that I didn't see mentioned elsewhere, one that I wasn't even aware was a player until after the election. That's North Texas Parents for Academic Excellence. It's a nonprofit corporation formed March 16, 2022, with three directors, Brandon Walls, Bryan Stone, and Sam Jarvis. If the name Brandon Walls is familiar, it might be because he's the Campaign Treasurer for the Richardson ISD Families First PAC. I was very aware of that PAC's involvement in the election. What's curious about the connection between the nonprofit and PAC?

If you look at the PAC's Runoff Campaign Finance Report filed by the PAC on May 16, 2022, it shows a contribution of $1,337.50 from the nonprofit corporation, with Brandon Walls as director, to the political action committee, with Brandon Walls as treasurer.

What's going on here? Darned if I know. The left hand is passing money to the right hand. Why? Darned if I know. Why set up a nonprofit corporation at the beginning of an election campaign if not to somehow influence the election? Darned if I know. Why raise money for a nonprofit only to donate the money to a political action committee? Darned if I know. Maybe someone can explain. Maybe Brandon Walls can, since he seems to be in charge of both ends of this financial transaction.

I'm not charging illegal behavior here, despite, in "Understanding Corporate Contributions", saying, "The Texas Election Code prohibits incorporated entities – that includes businesses as well as non-profits – from donating to candidates or to political committees that may, in turn, donate to candidates."

Maybe the explanation how this is legal depends on an argument that the PAC never gave money directly to candidates. They only spent money on their own advertising in support of those candidates. Maybe the defense is that the PAC is a so-called SuperPAC, to which corporations, including nonprofit corporations, are allowed to donate money because SuperPACs are prohibited from donating money directly to candidates themselves or even from coordinating their own expenditures with candidates' campaigns. Is that it? Darned if I know.

Given that the PAC's mailers used photos of Sherry Clemens and her family that were identical to ones used in Sherry Clemens's own campaign mailers, and given that the PAC and Sherry Clemens's campaign both used Axiom Strategies of Kansas City, MO, for mailers, people might be excused for suspecting some kind of coordination was going on. But that might be illegal, so that can't be it, can it? More explanation is called for.

Maybe the explanation depends on some detail of state law that I, not being a lawyer, just don't understand. I'd quote more from the TransparencyUSA explainer, heck, I'd quote from the Texas statutes themselves, but, as warns readers, "The answer is a bit complicated." So, that's where I have to leave it, with more questions than answers.


ginnylaugh said...

And yet... with all these questionable machinations, They Lost. I bet that stings... they no doubt thought they were so RIGHT and so smart. And, *this time*, the Best candidate won. Thank you to all who made this important enough to participate. And there's so much more to do ~

Mark Steger said...

Someone asked, "Is the non-profit at 501(c)3? If so, donations are tax-deductible."
My answer: I don't know. If it were, that would be problematical. "A section 501(c)(3) organization may not make a contribution to a political organization described in section 527 (such as a candidate committee, political party committee or political action committee (PAC)). Nor may such an organization establish and maintain a separate segregated fund under section 527. Source: IRS.