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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.)