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June 13, 2004
Maybe He Doesn't Know The Law

Ralph Nader, who gained fame as a consumer-advocate lawyer, appears to need a brush-up course on electoral and tax law. The Washington Post reports that Nader has housed his campaign headquarters in the offices of his tax-exempt charity Citizen Works since October:

Tax law explicitly forbids public charities from aiding political campaigns. Violations can result in a charity losing its tax-exempt status. In addition, campaign law requires candidates to account for all contributions -- including shared office space and resources, down to the use of copying machines, receptionists and telephones.

Records show many links between Nader's campaign and the charity Citizen Works. For example, the charity's listed president, Theresa Amato, is also Nader's campaign manager. The campaign said in an e-mail to The Washington Post that Amato resigned from the charity in 2003. But in the charity's most recent corporate filing with the District, in January, Amato listed herself as the charity's president and registered agent.

As the Post points out later in the same article, these laws were used earlier to attack Newt Gingrich for ethics violations regarding the role of his own charity in his election campaign, so this is hardly an esoteric regulation. The Post's James Grimaldi refers to it as one of the few "bright lines" in electoral law. What the law intends to prevent is tax-deductible charitable donations -- which have no individual limits -- being funneled into electoral campaigns. Failure to regulate this provides an opportunity for massive cash-laundering and certainly opens the door to untraceable violations of recent campaign-finance laws.

Nader argues that the rent his campaign pays to Citizen Works covers the entire cost of all campaign work at their headquarters, and argues that because his campaign manager is an attorney, everything is quite legal, although Nader's status at the bar doesn't seem to confer the same guarantee:

Nader emphasized that Amato made sure that all tax and election laws were followed. "There's no bigger stickler than Theresa Amato," Nader said. "She's an attorney."

Others, including donors to Citizen Works, differ. Two donors contacted by the Post expressed dismay that their contributions appear to be supporting Nader's political activity, which they want to avoid. Former Nader colleague and FEC general counsel Larry Nobel also commented that the arrangement "clearly presents problems -- tax problems and campaign finance problems." In fact, most Post sources in this article seem to agree:

Stanley M. Brand, a District lawyer who specializes in campaign-finance and political law, said, "The FEC wants bright-line distinctions between campaign-related and charitable activities. And so does the IRS. A 501(c)(3) [public charity] is not supposed to underwrite or engage in political activity. If it is lending or forgiving expenses for use of its facilities, it may be creating its own problems with the IRS."

It seems that the crusading lawyer who attacked corporations and governments for violating the law takes a much more flexible approach to his own behavior. So far, since Citizen Works hasn't received much in the way on contributions lately, not much harm has been done. But then, the same exact thing could have been said for Newt Gingrich, whose situation was much more of a gray area than Nader's, and he got pilloried for it.

In this case, though, you can assume that nothing much will happen to Nader. Kerry won't attack him as he's still hoping to either get Nader to withdraw and endorse him, or failing that, to charm the hell out of Nader's supporters. Bush won't attack him because Nader attacks Kerry on his left flank, forcing Kerry to shift farther from the center to negate Nader. The only dark cloud on Nader's horizon is the self-motivating bureaucracy of the IRS and the thousand little catalysts of voter-advocate organizations, ironically the type of activism Nader helped inspire.

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Posted by Ed Morrissey at June 13, 2004 7:55 AM

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