Widgetized Section

Go to Admin » Appearance » Widgets » and move Gabfire Widget: Social into that MastheadOverlay zone

Ron Paul uses non-profit groups to evade campaign finance disclosure laws

By CAPITOL HILL BLUE Staff Reports
December 24, 2011

Two of Ron Paul‘s foundations are skirting the edge of, and perhaps crossing, the line between issue advocacy and political campaigning and may be breaking federal tax and campaign finance laws.

The non-profits, all part of millionaire Paul’s political empire, pays his campaign aides, organizes political volunteers and promotes his often unorthodox ideas, the Associated Press is reporting.

An AP “enterprise” story by Ryan J. Foley, published Saturday coincides with Capitol Hill Blue findings that raise serious questions about how Paul uses money donated to both his campaigns and his various causes.

By diverting funds into his foundations, Paul is able to avoid disclosure on how the funds are spent and evidence suggests he is illegally using non-profit foundations for political activity.

“It sounds like a way to maintain a permanent campaign, Melanie Sloan, executive director for Citizens for Responsibility and Ethics in Washington, told the AP. “These groups were never supposed to be political organizations.”

But Paul has a long history of diverting funds from contributors.  After his previous two failed Presidential campaigns, he moved millions of unspent campaign funds into non-profit groups like his Campaign for Liberty and evaded disclosure laws that would apply to use of campaign funds.

After his 2008 bid for the GOP Presidential campaign failed, Paul created the Campaign for Liberty with leftover millions and then used his campaign mailing list to solicit even more money.

Then he put longtime campaign aides to work for the foundations, including another new non-profit called Young Americans for Liberty, aimed at high school and college students.

Both non-profits were formed under federal law governing non-profits as “social welfare organizations,” which means they are not supposed to engage in political action or promote candidates.

Yet both immediately began sponsoring activities of the political tea party movement, including hosting conferences, training political activists and promoting at least two candidates — Ron Paul and Rand Paul, his son.

In addition to the diverted campaign funds used to start Campaign for Liberty, Paul raised another $13 million with direct mail and on-line fundraising activities.

Other candidates use advocacy groups to promote themselves and their ideas.  President Barack Obama has his “Organizing for America” political action group and GOP Presidential candidate Mitt Romney formed a political action committee (PAC) to donation to candidates and pay his campaign expenses.

But PACs are regulated by the Federal Election Commission, which requires detailed disclosure of expenditures.

Nonprofits like Paul’s Campaign for Liberty evade disclosure by operating under the loose, and more secretive rules governing foundations.  Even though federal law prohibits political activity by such groups, Paul’s Campaign for Liberty calls itself a “lobbying group” for such issues as “individual liberty” and “constitutional government” as well as political candidate Ron Paul.

Paul not only uses the foundations to pay his closest aides and even family members.  Campaign for Liberty president John Tate received $338,000 in salary from the non-profit in 2009 and 2010.  He now serves as Paul’s campaign chairman.

Paul’s daughter, Lori Pyeatt, received $34,000 in 2010 as a part-time secretary and treasurer for Campaign for Liberty.

Both foundations also worked to elect Paul’s son, Rand, to the U.S. Senate from Kentucky in 2010.

(This article includes information from Ryan J. Foley of The Associated Press along with contributions from Capitol Hill Blue staff.)

Enhanced by Zemanta

34 Responses to Ron Paul uses non-profit groups to evade campaign finance disclosure laws

  1. Aaron

    December 24, 2011 at 7:08 pm

    And most scary of all, there aren’t any big banks funding these shadowy groups who support Ron Paul! the FEC website even confirms that the top donors to his campaign and likely these groups are US military service members. We should really get back to the good candidates (from both parties) who have the undying support of our most trusted global corporations and mega banks. lol

    I love the implication that these college students are being paid or something. Uh, the only reason that this is a story is because these other candidates have zero college support.

  2. Joseph

    December 24, 2011 at 7:10 pm

    You guys don’t seem to get that the nonprofits are only sponsoring his ideas and gladly hosts events with other politicians who endorse liberty. The thing about his campaign aides is that they worked for c4l promoting liberty for a few years, and then quit to join his campaign. Also the last sentence is incredibly misleading. They did not work to elect one single politician.

  3. jeremy

    December 24, 2011 at 7:14 pm

    “millionaire Paul’s political empire”???

    Up until last week, he was a grumpy old man wearing tin foil… lol!

    What a smear this article is! Better run scared liberals, Ron Paul is going to eat Obama’s lunch and offer the REAL change that Barry didn’t offer!

  4. Nathaniel H

    December 24, 2011 at 8:56 pm

    Now tell me about Romney’s 32 Million and Obama’s 86 million. :)

    Paul 2012

  5. chuck

    December 24, 2011 at 8:59 pm

    I’ve worked in the cfl and there is a distinct line we were not allowed to cross. It is similar to other libertarian / freedom type groups. Paul is aligned with those people who like freedom, and they tend to like Paul at election time. It is not set up just for Paul and that is very obvious. When Rand Paul ran some were upset that the organization didn’t do anything to really help. Some left just because it wasn’t a political group.

  6. GoRonGo

    December 24, 2011 at 10:30 pm

    HaHa!!! Ron Paul is beyond suspicion. Lie all you like, you will never stop the Ronolution!!! The wastestream media has lost its control on public opinion.

  7. Carl Nemo **==

    December 24, 2011 at 10:35 pm

    Seemingly candidate Paul’s directing of surplus campaign funds to his foundations which can have a charitable focus as well as of a political nature is not a violation of any current campaign law. I’m supplying a link to a FEC’s (Federal Election Commission) three page .pdf discussing this issue concerning the “winding down” of a campaign as in Paul’s case a number of times. Seemingly it’s his perogative to do so as long as the excess campaign monies aren’t used for personal use.

    This article is seemingly of an inflammatory nature and the writer/s haven’t done his/her research on what’s legal and what’s not or consulted with an attorney that’s a subject matter expert in campaign finance matters. To me it’s another let’s “Get Ron Paul” article regardless of avowed non-partisanship from the site host. I admit this candidate has flaws, but who doesn’t? I’m sure Obama et al.’s campaign finances aren’t squeaky clean either and walk the narrow line between what’s legal and what’s not.

    http://www.fec.gov/info/articles/windingdown09.pdf

    extract from referenced .pdf

    “Can my campaign committee donate to a charitable
    organization?”

    “Yes. Gifts to charity are not considered personal
    use expenses as long as the candidate does not receive compensation from the charitable organization before it has expended the entire amount donated. Note that the amount donated must have been used for purposes that do not personally benefit the candidate.” 11 CFR 113.1(g)
    (2). AOs 2005-6, 1997-1, 1996-40 and 1994-20

    “May I convert my principal campaign committee into
    a PAC?”

    “In past advisory opinions, the Commission has explicitly permitted a principal campaign committee to become a multicandidate committee as an alternative to the committee’s termination. In meeting the requirements for multicandidate status, a former principal campaign committee may avail itself of the length of time of its prior registration, the number of contributions it has made in the past and the number of contributions it has received. Note that the prohibition on converting campaign funds to personal use still applies to such a committee.” AOs
    2004-3, 1988-41 and 1985-30.

    “May I use remaining campaign funds in a future
    federal election?”

    “Yes, surplus funds may be used in connection with a
    future election. Funds may be transferred between authorized committees of the same candidate (for example, from a previous campaign committee to a current campaign committee) without limit as long as the committee making the transfer has no “net debts outstanding” as defined in 11 CFR 110.1(b)(3)(ii). 11 CFR 110.3(c) and 116.2(c)(2). Alternatively, a candidate may redesignate a former campaign committee as the principal campaign committee of his or her current campaign and use the excess funds of the previous campaign in the current campaign. AO 1980–30. A candidate who wishes to use the committee for a subsequent federal campaign, may redesignate it as an authorized committee using FEC Form 2.

    Carl Nemo **==

    • Almandine

      December 25, 2011 at 12:51 am

      Your diligence with regard to the substance of this CHB Staff report is laudable, Carl, and much more worthy than what they have passed off as learned analysis.

      Whether by mere laziness, or probably something a lot more ideological, their lack of journalistic rigor, coupled with self-righteous hubris, has produced a clear message of bias.

      If only the point was to inform, not smear. If only the unseen message was legitimate, not bogus. If only the stakes were politics-as-usual, not life-or-death for this once great nation.

  8. Almandine

    December 25, 2011 at 12:16 am

    Throw it against the wall and see what sticks…

    • Carl Nemo **==

      December 25, 2011 at 12:40 am

      Based on my research and how this article was proffered, seemingly nothing is going to stick Almandine. There’s no way Paul’s camp would screw up and violate campaign financing laws. Seemingly he’s kosher relative to what’s allowed and what’s not. This CHB article is simply a ‘red herring’ to promote controversy where there should be none; I.E., ‘clicks for site $$’…no?

      It’s simply a driveby ‘molotov cocktail’ thrown at the Paul campaign. They’ve used alcohol in the bottles in lieu of gasoline providing lotsa blue flame with minimal damaging ‘heat’.

      Hey, Ron Paul isn’t perfect, but based on the snake oil salesman in chief we now have at the helm, just about anyone can do a better job, even the ‘village idiot’. We’ve been had by a silver-tongued, judas goat, a CIA engineered plant to provide a holdover presidency between ‘rethuglican’ regimes, the flagship party of the wealthy class.

      My suspicion is they are going to shove Mitt down our collective throats since he’s the most probable to defeat Obama, but will provide us more of their globalist agenda this nation has suffered for the past 30 years until we are ‘toast’. / : |

      Carl Nemo **==

  9. brian

    December 25, 2011 at 1:46 am

    That’s a pretty hefty charge. I am a member of C4L, and have found common ground with many Gary Johnson supporters. You guys really are running out of smear material aren’t you? May want to give Gingrich’s ethics violations, or Romney’s deleted hard drives a go. Ron Paul 2012!

  10. Hank Xavier

    December 25, 2011 at 2:05 am

    This is the man that returns over 100k dollars to the Treasury every year from his Congressional budget. There is no way he would act outside the law with CFL and YAL.

  11. Bo

    December 25, 2011 at 2:08 am

    LOL, another attempt at smear. Pathetic.

  12. christopher

    December 25, 2011 at 7:58 am

    If Americans fall for these desperate and transparently contrived “hit pieces” against Ron Paul, they are beyond redemption. They might as well resign themselves to increasing tyranny and poverty.

    Go Ron Go!

  13. ygggyi

    December 25, 2011 at 8:30 am

    Evil, lying pathetic humans, await your misery and slavery at the hand of your own kind, the freemason protectors of false royalty, do what they are told and rape your children while you cheer

    muscle up for the end, you earned it

  14. Sammy

    December 25, 2011 at 8:38 am

    Boo hoo! Ron Paul is super organized and has a large flock of followers and the Associated Press and Capital Hill Blue want to raise a stink about it? What about all the money that Mitt Romney’s Super PAC has raised from large corporations? Ron Paul would never get that type of money from large corporations because he is honest! And the people want honesty in government! Go Ron Paul!

    So the media is focusing on legitimate campaign organizations, now that Ron Paul is getting popular.

    How about Newt and Romney having close ties to special interest (defense contracting) in the tune of $40 billion dollars. That seems by far a more pertinent and ethical conflict of interests.

    http://www.bloomberg.com/news/2011-12-23/republican-security-advisers-tied-to-40-billion-in-contracts.html

  15. Michael Lewis

    December 25, 2011 at 9:20 am

    I do not believe Congressman Paul’s campaign has violated campaign law. But I do believe campaign laws violate our 1st Amendment rights!

    Where in the Constitution is the authority to make political coordination a crime and by what logic do campaign laws make it one?

    Amendment 1: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people to peaceably assemble, and to petition the Government for a redress of grievances.”

    On Wikipedia lookup the words:

    • “Assembly”: “Freedom of assembly, the individual right to come together and collectively express, promote, pursue and defend common interests.

    • “Association”: “Voluntary associations, groups of individuals who voluntarily enter into an agreement to accomplish a purpose.” 501(c) non-profit organization is given as an example.

    • “Coordination”: “Coordination is the act of coordinating, making different people or things work together for a goal or effect to fulfill desired goals in an organization. Coordination is a managerial function in which different activities of the business are properly adjusted and interlinked.”

    In sports the lack of coordination leads to lost games. In orchestras the lack of coordination results in dissonance. Choreography without coordination lacks grace. Lack of coordination in business results in lost profits.

    Oh well, I guess uncoordinated political campaigns are good training for political candidates who will work in our dysfunctional government.

    Remember the rhyme we were taught as kids: “sticks and stones may break my bones but words will never hurt me.” Well the only thing political campaigns produce is communications for mass distribution.

    Despite the fact the 1st Amendment forbids Congress
    from writing laws that abridge our freedoms of speech, press and assembly, unconstitutional campaign laws abridge all three.

    Americans spend 7 billion a year on potato chips. Is 8 billion for elections really too much money?

    • Carl Nemo **==

      December 25, 2011 at 1:37 pm

      Hi Michael Lewis…

      “Americans spend 7 billion a year on potato chips. Is 8 billion for elections really too much money?” …extract from post

      I’d say billions on potato chips and other junk food is a far better purchase than a single buck spent on elections when you balance ‘fun food’ against indigestive politics as usual.

      ***

      Merry Christmas and so too wishing a Happy and Successful New Year 2012 to our site host Doug Thompson along with my fellow CHB site participants. : )

      Carl Nemo **==

      • Almandine

        December 25, 2011 at 9:13 pm

        Ditto on the wishes for a happy holiday season and a bountiful new year.

  16. bob adams

    December 25, 2011 at 9:38 am

    The people who really run this country are getting desperate anything they can use against Ron Paul.

    Keep telling the truth Mr. Paul. The people are listening.

  17. Michael Cecil

    December 25, 2011 at 10:52 am

    I would give your piece a different title:

    Reptilian Sons of Darkness Attack Dr. Ron Paul…

    …because they are *incapable* of effectively challenging his policies on the Federal Reserve, Constitutional government, the rule of law, and a rational foreign policy.

  18. charles perry

    December 25, 2011 at 11:06 am

    Usually when you are over the target you are going to get flak.

  19. Dave

    December 25, 2011 at 11:20 am

    Another hit piece for RP. I see this as very positive because the MSM has gone from ignoring to FIGHTING!!! We are WINNING!!!! (lance armstrong, not charley sheen)

  20. Jack

    December 25, 2011 at 12:35 pm

    Ha! You are attacking the candidate who gets his donations from the grass roots in small amounts instead of the huge warchest from the corporations like Goldmann Sachs (Romney, Obama).

  21. david

    December 25, 2011 at 1:13 pm

    The problem with this article is in the first paragraph which shows it will be a biased one. The closed mind of the writer against Paul is very evident and therefore diminishing the credibility of the article and it’s writer.

  22. Noel

    December 25, 2011 at 1:21 pm

    Imagine, Ron Paul, campaigning for Liberty and the Constitution! THE NERVE. These things should be illegal in D.C. (The District of Corruption)!

  23. James

    December 25, 2011 at 6:58 pm

    Unreal. When you have candidates taking special interest money to fund their campaigns, you pick Ron Paul’s campaign finance to write about? Man this really is bizarro world. Welcome to the asylum.

  24. Dave Mowers

    December 25, 2011 at 7:13 pm

    The title for this article is wrong it should read;

    “Ron Paul uses campaign donations the same way as all the other candidates so we have no real story to report to you”

    • paul

      December 27, 2011 at 1:19 am

      Your title is dead on! this article is trash because Obama did they same thing!

  25. Joseph Zrnchik

    December 25, 2011 at 9:59 pm

    So, is Ron Paul the only candidate that took money from non-profits?

    What’s that? They all do, you say. So where is the news?

    A Lifetime of Political Honesty Pay Off for Ron Paul

  26. Billy Wilson

    December 26, 2011 at 3:42 am

    Looks like the money junkies, mainstream media(whores), and every stooge in between is terrified of Dr. Paul.

    Good. The more they scream, the more heads will turn in Ron’s direction. Too many people on the ground-floor will correct the misinformation (read:bullshit) and convert one at a time.

    Seriously, look at who they’re trying to push through on the Republican ticket. Every one of them is a joke, a walking political cartoon and an embarrassment to the people of the United States. That ancient Cold War mentality of Right vs. Left, Conservative vs. Liberal, Dem vs. Repub crap isn’t working anymore and, feeling the grip of the American mind slip through their fingers, they grow desperate. Hence the bs slinging at Dr. Paul.

    RON PAUL 2012: Vote for the champion of liberty! Check out his record and message!

    For the first time in a very long while, YOU DON’T HAVE TO VOTE FOR THE LESSER OF TWO EVILS!

  27. Billy Wilson

    December 26, 2011 at 3:44 am

    As for the “racist letters coming back to haunt him”, that’s quite possibly the best “they” could dig up on him. It’s been dismissed and condemned by Dr. Paul, and the NAACP have come out in his defense.

    Got anything else?

  28. woody188

    December 26, 2011 at 1:36 pm

    Might be prudent to show how Pew Charitable Trusts, the Carnegie Foundation, and the Joyce Foundation are used in a similar manner, just for balance.

    For instance, Obama, as a Joyce Foundation board member, was involved in investing in Al Gore’s Chicago Climate Exchange. Profit from carbon trading was estimated to be in the tens of trillions of dollars.

    Next thing you know, we get the Cap-And-Trade (Cap-And-Tax) bill. When that failed to make it through Congress (THANK YOU CLIMATE GATE EMAILS!), the Obama’s EPA just up and declares Carbon Dioxide a pollutant that they will regulate under the Clean Air Act.

    COINCIDENCE?

  29. Casey

    January 4, 2012 at 8:10 pm

    Paul is not a candidate or a political movement. Paul is a cult, albeit with a strangely uncharismatic leader. You have run afoul of the Church of Paul. Witness the few dozen preceding quotes. The Prophet Ron Paul can never toppled.