A ‘social welfare’ group that nobody knows

PFA runs ads against Gov. Corbett. But who are they?

Pennsylvanians for Accountability runs television ads that accuse Gov. Tom Corbett of playing a shell game with the state.

But what game is the Pittsburgh advocacy group itself playing? It refuses to name its officers and directors. It conceals its funders. It uses a mail drop for an address.

“I don’t know who’s in it,” said Georgeanne Koehler, a Pittsburgh resident who is one of three people who incorporated PFA. “I’m not sure who started it or why it was started, other than they want to fight for a better life for our citizens. I don’t know what kind of money they have. … I don’t know who’s in charge.”

PFA is a “social welfare” nonprofit group. The Internal Revenue Service has admitted that its Cincinnati office singled out applications for this type of tax-exempt status filed by conservative groups with “tea party” or “patriots” in their name.

Attorney General Eric H. Holder Jr. announced recently that the Justice Department and FBI will investigate whether the IRS broke any laws by targeting the conservative groups. There is no indication that PFA, which is associated with unions and a liberal group, was singled out by the IRS.

PFA is just one example of the so-called ‘dark money’ groups who attempt to sway public business, yet whose identity is unknown.

Social welfare nonprofits are popular with political operatives because tax-exempt groups do not have to disclose their funders. Political groups regulated by the Federal Election Commission do.

Members of good government groups said the social welfare nonprofits should make public who they are and where their money is coming from so citizens can evaluate their positions.

Graphic by: Alexandra Kanik / PublicSource

“The citizens of Pennsylvania have a right to know who is really behind all these organizations with glorious sounding names,” said Barry Kauffman, executive director of Common Cause Pennsylvania. “Who is paying your expenses? Who are your officers? What is your agenda? What do you hope to accomplish?”

PFA looks like a political group. Its ads attack Corbett’s record on corporate tax cuts and denounces budget cuts for education. Corbett, who has not announced his intention to run for re-election in 2014, is in the midst of fighting for his budget.

So far, PFA has spent at least $250,000 on ads in Pittsburgh, Harrisburg, Lancaster and York, according to incomplete Federal Communications Commission reports. BerlinRosen consulting firm, a campaign consulting firm in New York, said ads also are appearing in Erie, Johnstown, Altoona, Wilkes-Barre and Scranton.

An IRS loophole

In 2010, the U.S. Supreme Court ruled in Citizens United v. FEC that corporations and unions could spend as much as they wanted on political campaigns, so long as they didn’t coordinate their campaigns with candidates and political parties.

The ruling opened the campaign finance floodgates. A new type of political organization, called a Super PAC, raised unlimited amounts of money from wealthy people and organizations. These groups still had to report the donations to the Federal Election Commission.

Groups like Crossroads GPS, founded by Republican strategist Karl Rove, and Priorities USA, formed by former aides to President Obama, used another strategy. They organized as non-profit, social welfare groups under the tax laws, enabling them to bypass FEC regulations.

Their contributors are unknown. However, social welfare nonprofits managed to spend $254 million in the 2012 federal elections.

“They’re not breaking the law,” said Terry Madonna, director of the Center for Politics and Public Affairs at Franklin and Marshall College. “The problem is the law.”

For democracy to work, he said, people need to know  the source of campaign money so they can make up their own minds about the groups.

PFA registered in September as a nonprofit with the Pennsylvania Department of State as a “social welfare organization promoting accountability in state government.”

Groups that call for the election or defeat of a specific candidate must register as a political committee, and political committees must report donations and expenses. But by steering clear of words like “elect,” “defeat,” or “vote against,” social welfare groups are considered issue advocacy groups and do not have to register as political committees in Pennsylvania.

Nonprofits are not required to disclose their officers and directors in the state.

“They don’t have to give us very much information,” said Ron Ruman, a spokesman for the Pennsylvania Department of State.

Lynsey Kryzwick, vice president for national issue advocacy at BerlinRosen, verified that PFA has also applied for tax-exempt status under federal tax laws.

If its IRS application is approved, that will become public record and PFA will have to file annual reports that show its officers and expenses, but not its donors.

The IRS said the approval process takes about a year.

A box within a box

PFA listed its address at 801 N. Negley Ave., #5, in Pittsburgh’s Highland Park neighborhood. That’s the same address as the state office of America Votes, a national organization “established to coordinate and promote progressive issues,” according to its mission statement.

America Votes also is a “social welfare” nonprofit, but unlike Pennsylvanians for Accountability, it identifies its leadership, staff and partners.

The office of America Votes is in a former church run by the Union Project, a community group that offers classes, rents space for events and leases offices.

“I’ve never heard of this group,” Jeffrey Dorsey, executive director of the Union Project, said about Pennsylvanians for Accountability. “If they listed our address, I’m really confused.”

The location gets more confusing on FCC records, which list a box number at 1151 Freeport Road, O’Hara. That’s a United Parcel Service store in the Fox Chapel Plaza.

Pennsylvania requires corporations and nonprofits to have a physical address “beyond a post office box,” Ruman said. And when an address changes, their registration must be amended.

PFA has not amended its registration.

“Whether they are actually there,” Ruman said, “we can’t look into.”

That’s because the Pennsylvania Department of State has no investigative or enforcement power.

The advocacy group even disguises its online address. Internet domain registrations typically show an address, telephone number and contact. PFA’s internet domain shows its contact information as a Los Angeles company that boasts that it “masks your email from the outside world!”

“There are always people trying to game the system,” said Kauffman of Common Cause. “We think society runs better when people follow the rules instead of trying to beat the rules.”

Transparency works better than secrecy, he said. The public gains confidence in your activities. “You have greater credibility.”

A ‘better life in Pa.’

The state registration does reveal four names.

Dan Ford is named as the person at the America Votes address to whom documents should be returned. FCC records identify him as campaign director of the group. Ford, of Harrisburg, has worked as a union organizer for the American Federation of State, County and Municipal Employees, a trainer and recruiter for Service Employees International Union, and a political campaign manager.

When reached by telephone, Ford said he would talk later, but did not respond to several voice mail messages.

Linda J. Cook of Brookhaven, near Harrisburg, and Kevin C. Kantz of Edinboro are listed as incorporators. They are retired teachers who have been active in the Pennsylvania State Education Association. They did not respond to telephone messages requesting comment.

The only person formally connected to the group who would talk with PublicSource was Koehler, 66, the Pittsburgh incorporator who doesn’t know who runs the organization. She lives in Bloomfield near UPMC Children’s Hospital of Pittsburgh, where she worked in various positions when it was St. Francis Medical Center.

Koehler said she was recruited by Mary Shull, the state director of America Votes, whom she knew from voting rights events. Shull did not respond to several telephone messages.

Koehler said that she was told that if anyone approached her about PFA she was to refer him to Kryzwick, PFA’s spokeswoman and an employee of BerlinRosen.

Kryzwick declined to identify the group’s leadership or funding.

Koehler got involved in political causes after her brother, Billy, died in 2009 from heart failure. He had lost his job as an electronics technician and no longer had health care insurance.

She organized a postcard campaign urging politicians to reform healthcare with help from the Service Employees International Union. Just before Christmas 2009, she delivered about 1,000 postcards to elected officials in Washington.

As for Pennsylvanians for Accountability, “The only thing I know, they told me they’re fighting for rights so people can have a better life in Pennsylvania,” she said. “I said you can have my name and do what it takes to make Pennsylvania better.”

Reach Bill Heltzel at 412-315-0265 or bheltzel@publicsource.org.

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