DATELINE: May 22, 2008, Chicago
Several months ago we wrote about a speech that Senator Barack Obama made at the United Church of Christ's 50th anniversary General Synod. The IRS received a complaint that the UCC was providing a platform for Senator Obama. The person filing the complaint apparently believed the UCC had engaged in a prohibited political intervention by providing Senator Obama a platform.
In our post, we called this one a close call. The invitation from the UCC to Senator Obama had been extended...
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before he announced his candidacy. Importantly, Obama was chosen, together with 59 other church members from different walks of life, to speak on how his personal faith intersected with his public life.
The UCC took some precautions to assure that Senator Obama's speech and appearance would not turn into a political event or be percieved as a UCC endorsement. As the UCC pointed out, they told the crowd that this was not a campaign speech, they prohibited signs and leaflets in the hall, and they did not allow any other campaign activity by the Obama organization in the hall. Notably, the UCC also had its general counsel advise Senator Obama's campaign of the "ground rules"
Shortly after we posted our story, we received an e-mail with pictures attached ("Pssst, wanna see some pictures?"). Those pictures showed Obama campaign tables set up outside the hall where Obama spoke. That certainly raised some interesting questions. Did the UCC control the space? Was it public property? Could Senator Clinton's campaign set up competing tables in the same space?
On May 13, 2008, the IRS provided its take on the entire incident. In a letter, the IRS advised the UCC that it had reviewed the information that the UCC provided to the IRS, together with other information. The IRS concluded that the UCC had not violated the prohibition against campaign interventions by permitting Senator Obama to speak. The IRS specifically addressed the presence of 40 campaign volunteers outside the arena where the speech took place. According to the IRS's findings, the UCC did not authorize (or have power to authorize) campaign volunteers for Senator Obama to set up tables near the entrances to the arena. The IRS also noted that the activity was conducted on public property outside the control of the UCC. As a consequence, the IRS did not attribute such activity to the UCC. Additionally, the IRS notes that the UCC provided a link on its Web site to an IRS fact sheet on election year activities and that the UCC's nationwide special counsel advised leaders of the UCC of the publication of Revenue Ruling 2007-41.
It is unfortunate that the IRS did not address the content of Senator Obama's speech, which as we pointed out in our prior post was close to the line. We read parts of it as moving from a personal testament to a political speech. Had the IRS addressed that issue, taxpayers would have had a better sense of what constitutes political speech and when issue advocacy becomes a disguised campaign intervention.
Nevertheless, the letter is useful in suggesting some steps that Section 501(c)(3) organizations should take to protect themselves when they do have interactions with candidates for public office. It is quite clear that if the candidate is speaking in a non-candidate capacity, the organization should make sure that campaign volunteers for the candidate are not campaigning on premises that are under the control of the organization. It appears that volunteers can campaign in close proximity to the site of the speech, provided it is public property, or property that is not within the control of the organization (e.g., private property of another person or entity in close proximity to the speech site). However, Section 501(c)(3) organizations should be careful. We wonder whether the IRS might look at the situation differently if the candidate and the organization collude, with the organization knowing from the outset that the speech will be non-political, but that volunteers will be waiting on the public sidewalk just outside the hall as attendees leave the hall. We would argue that the organization is using its assets and goodwill to bring together a crowd to facilitate the candidate's campaign activity. But for the speech, it would be unlikely that those 1,000 people would be directly exposed to the campaign volunteers on public property.
We also think the fact that the UCC set ground rules and had its counsel speak to the Obama campaign were critical steps. The announcement to the audience was also important. Any organization that finds itself in a position similar to the UCC would be wise to take comparable steps and to then document them.
We have to chuckle about the link to the IRS Web site and advising church leaders about Revenue Ruling 2007-41. Had Wesley Snipes linked to the IRS Web site would he have received a reduced sentence? We doubt it. Nevertheless, there is no cost in strapping on these wings. So why not do it?
As we said, it is too bad that the IRS did not address whether Senator Obama's speech crossed the line. We would have learned a lot had the IRS concluded that the Obama speech had crossed the line, but that the UCC had not engaged in a prohibited intervention. We would have a better sense of how to determine whether a speech constitutes a prohibited intervention and whether the Section 501(c)(3) organization has the duty to then cut the power on the mike.
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