Breaking: New Era Colorado May Have Violated Tax Exempt Status
In what appears to be a violation of its tax exempt status as an organization governed under section 501(c)3 of the IRS code, New Era Colorado dropped campaign literature advocating the election of specific candidates. The “Voting Guide” provided by New Era Colorado lists Democratic candidates in state and federal elections who have received the “thumbs up” from New Era Colorado.
While organizations created under section 501(c)3 are prohibited from advocating directly for candidates, those created under section 501(c)4 may. The October 6 cached version of the New Era website states, “We also are affiliated with New Era Colorado, a 501(c)4 nonprofit organization.” Publicly available documents show a (c)4 being created for New Era Colorado on October 10 2012, just five days ago and four days after being on the New Era website.
Images of the voter guide do not make it clear whether they were produced by New Era Colorado’s (c)3 organization or New Era Colorado’s (c)4 organization.
Legal sources familiar with the laws pertaining to tax exempt organizations question the source of the voter guide and, in turn, the legality. “New Era Colorado Foundation, given the quickness with which it turned over its (c)4 probably has to worry. Did the (c)4 use its own resources or those of the (c)3?”, said Media Trackers’ legal source speaking on background. “Given the five day turn around, the organization is probably going to have a lot of paperwork it needs to show to make sure there was a real firewall between the organizations, something not easily done in that short time span.”
The organizational documents for New Era Colorado’s (c)4 arm were filed on October 10, 2012 according to TRACER, the Colorado Sect. of State’s campaign finance database. In New Era Colorado’s October 15 report of contributions and expenditures, there are no expenditures listed, making it highly likely the voter guides were produced and provided to voters using funds from New Era Colorado’s (c)3 organization.
According to 2010 IRS filings, the latest filings available, New Era Colorado’s (c)3 organization received over $300,000 in donations in order to advocate for liberal policies in the state. New Era Colorado’s (c)4 was registered by Julie Wells, the registered agent of choice for liberal groups in Colorado.
On the front page of the New Era Colorado website, Paul Harstad, a pollster for President Obama, Sen. Udall, and Sen. Bennet, praised the work of New Era Colorado saying, “New Era Colorado is one of the most exciting, innovative, and meaningful efforts in Colorado politics today. They give me faith in Colorado’s next generation of leaders.”
New Era Colorado Foundation is part of the liberal C3 Roundtable and has received a $25,000 grant from the Gill Foundation in 2012 as well as a $20,000 grant in 2011. Leslie Herod, who is listed on the New Era Colorado Foundation’s site as a board member, is also the program officer for the Gill Foundation.
Follow Aaron Gardner on Twitter: @aaron_rs