Abusing Charity

Trump supporters will read the title of this post and immediately think of all those “others” who are simply freeloading off of food pantries and government handouts instead of pulling themselves up by their own bootstraps and getting a job. Of course, the fact that many of the people who rely on these charities have either untreated health issues or, in fact, do have a full time job that does not pay a living wage never seems to break through the propaganda and epistemological closure that engulfs so many Republicans. But it is becoming increasingly apparent that ultra-rich are perhaps the biggest abusers of charities and the laws surrounding them.

The Washington Post had a disturbing story about how charities have moved well beyond advocacy for particular policy positions and have now “become essential to modern political campaigns, amid lax enforcement of the federal limits on their involvement in politics, while taking advantage of millions of dollars in what amount to taxpayer subsidies.”

The story focuses on 1960s leftist turned hard right conservative David Horowitz and the various charities he has created with massive conservative funding over the years, especially a particular charity called the Freedom Center. The Freedom Center began as an “educational institution” to service the community at large. focusing on popular culture and free speech. But by earlier this decade, it was basically a political outfit that attacked liberals on every possible front, from climate change to immigration to accusing Democrats of being in cahoots with Islamic militants. It even started to donate to far right parties in Europe, including Geert Wilders in the Netherlands.

Horowitz readily admits that conservative charities are coordinating their activities, usually at the direction of the large conservative donors that fund a number of them. He claims that a similar arrangement exists among liberal charities. Whether such coordination is legal is unclear but it has increased ever since Republicans forced the IRS to back off monitoring charities after claiming that the agency was targeting only conservative charities in investigating their tax-exempt status.

In essence, by the 2016 campaign, wealthy conservative donors like the Mercers and the Scaifes were donating large sums to conservative charities, taking the tax deductions that goes with charitable donations, and then helping coordinate those charities in attacks on Hillary Clinton and the Democratic party.

IRS rules on charities state that they are “are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office.” In addition, they may not devote a significant portion of their activities on propaganda. But wealthy conservative donors and charities are flouting these rules and getting away with it.

Then, of course, there is the Trumpian abuse of the rules on charities where he uses the charity to funnel money into his own pocket. David Fahrenthold documented Trump’s self-dealing and illegal use of the Trump Foundation during the campaign. Now we find out Eric Trump used his own foundation to funnel money to the Trump Organization. Part of the pitch that Eric Trump used for his foundation was that he could use Trump Organization properties free of charge so that virtually all of the money raised would go to the specific cause the Foundation was supporting. But a report from Forbes shows that, in fact, the Eric Trump Foundation has funneled over $1.5 million to the Trump Organization for services rendered. And the man directing that the Trump Organization bill for these services is none other than Eric’s father and current President, Donald Trump.

Wealthy donors are using the tax-exempt vehicles of charities to get large tax deductions while coordinating the partisan political activity of those charities and engaging in self-dealing. It’s a pretty nice racket.