Political Charity Outside the Lines, Part 5

Fly-by-night political charity struggles to get its story straight

In Part 2 of this series, I explore the curious case of the disappearing non-profit, Impact Minnesota.  This non-profit was created by the now Executive Director of the state Democrat Party, Corey Day.  The non-profit sprang up in August 2010, spent a couple hundred thousand dollars supporting Democrat Mark Dayton in that year’s election for governor, and then disappeared with few traces.

 

In September 2010 MinnPost reported on the funding source for this start-up, non-profit,

IMPACT Minnesota is being funded, in part, by Win Minnesota, another independent-expenditure fund.  Win Minnesota has helped to fund the Alliance for a Better Minnesota, which, among other things, has been backing TV commercials defining and criticizing Republican gubernatorial candidate Tom Emmer.

How much money did IMPACT receive?  MinnPost reported,

[Corey] Day wouldn’t disclose how much money IMPACT Minnesota has received, but an office has been opened in North Minneapolis and staff hired.  “We’re going to have a pretty comprehensive campaign,” with targeted radio and other “specialty media,” Day said.

What else was Impact Minnesota planning to do?  MinnPost reported,

IMPACT will be targeting voters in key geographic areas—such as Minneapolis, St. Paul, Brooklyn Center and Bloomington—and among younger voters…

…But Day acknowledged, “At the end of the day, our focus will be getting folks out for Mark Dayton.”  Dayton’s former wife, Alida Rockefeller Messinger, is a substantial backer of Win Minnesota.

It turns out that Alida Rockefeller Messinger was more than just a “substantial backer” of her ex-husband’s campaign for governor.  At the time of WIN Minnesota’s donation to IMPACT, she was a member of WIN Minnesota’s Board of Directors.[1]  As I document in Part 4 of this series, in 2010, the Executive Director of WIN Minnesota was Ken Martin—the current Chair of the Minnesota Democrat Party and Corey Day’s current boss.

Over the course of its brief existence, Impact Minnesota’s 527 state “Political Fund” (IMPF) made a series of filings at the state’s Campaign Finance and Public Disclosure Board.  Reviewing these documents reveals that IMPACT struggled to properly explain the source of their funding.

In their initial filing, made September 21, 2010, Impact reported receiving two donations from WIN Minnesota’s 527 Political Action Fund, totaling $133,332.

In their next filing, made October 25, 2010, the total amount Impact reported receiving had fallen to $97,159.75—and was reported as coming, not from WIN Minnesota, but in the form of in-kind contributions from Impact Minnesota’s 501(c)(4) tax exempt, social welfare operation.  In another document dated that same day, Corey Day certifies that Impact Minnesota’s 501(c)(4) operation had received the $97,159.75 from WIN Minnesota’s 501(c)(4) entity.

In a third document dated that same day, attorneys for Impact Minnesota write that the original September 21st filing was made in error, explaining,

IMPF [the political fund] did not receive any contribution—cash , in-kind, or otherwise—from WIN Minnesota.  Rather, WIN Minnesota was the source of Impact Minnesota’s in-kind contributions to IMPF.

The attorneys added,

IMPF incorrectly reported the entire grant that WIN Minnesota made to the nonprofit Impact Minnesota.  In reality, only a small portion of that grant was used for political activities by IMPF.

The October 25th letter from the attorneys is accompanied by a revised version of Impact’s September 21st Board filing.  The revise filing now shows total contributions of $29,600 (from the WIN Minnesota nonprofit by way of the Impact Minnesota non-profit) roughly matching the level of spending Impact’s 527 had originally reported for the period.

Impact Minnesota’s final Year-End Report to the Board reflects the final spending figure of $191,051.70.  The report includes a final certification from Corey Day for $41,892, from WIN Minnesota’s 501(c)(4) by way of Impact Minnesota’s 501(c)(4).

Adding all certifications together accounts for $139,051.75 as coming from WIN Minnesota’s 501(c)(4) non-profit.  I can find no certifications for the $25.000 received by Impact on October 22nd or the $27,000 received by Impact on October 27th.

On October 26, 2011, WIN Minnesota’s 501(c)(4) entity filed its 2010 Form 990 Federal income tax return with the IRS.  WIN reports making a grant to Impact Minnesota’s 501(c)(4) that year.[2]  But two things are curious about WIN’s disclosure of this grant.

First, no Federal EIN is reported for Impact Minnesota.  All of WIN’s other grants report an Employer Identification Number for the grantee.  (An EIN is the corporate equivalent of a social security number.)  The space for Impact’s EIN is blank.

Second, the dollar amount for the grant totaled $274,998.  Of that amount, Impact’s Political Fund accounts for only $139,051.75.  What happened to the other $135,946.25?

By accounting for $139,051.75 of the $274,998 grant from WIN’s non-profit, Impact’s Political Fund acknowledges spending 50.6 percent of the total grant on political activity.  Spending more than half of the grant on political activity appears to contradict Impact’s earlier claim that “only a small portion of that grant was used for political activities.”

What to make of this bizarre set of transactions.  If I were a real reporter, these are the questions I would have:

  • What did Ken Martin know, and when did he know it?
  • What did Alida Messinger know, and when did she know it?
  • What did Corey Day know, and when did he know it?
  • What do the minutes of Impact’s board meetings reflect regarding this set of transactions?
  • What do the minutes of WIN’s board meetings reflect regarding this set of transactions?
  • Who were the members of Impact’s board?
  • Who or what was WIN’s source for the $274,998 grant to Impact?
  • What happened to the remainder of WIN’s grant to Impact?
  • Who or what provided the funding for the other $52,000 donated to Impact’s 527 Political Fund?
  • Where is the Impact Minnesota 501(c)(4)’s 2010 Federal income tax return?
  • Why is there no EIN listed for Impact on WIN’s 2010 income tax return?
  • Did Impact violate IRS regulations on the political activities of tax-exempt organizations?
  • If so, did WIN Minnesota assist Impact in violating IRS regulations?
  • Was Impact’s statement to the Campaign Finance Board regarding the share of WIN’s grant spent on political activity merely mistaken or deliberately meant to mislead?


[1] Win Minnesota 501(c)(4) IRS Form 990, filed October 26, 2011, Part VII, Section A, Part 1a, line 4.  Ms. Messinger was also listed as a WIN director on the organization’s 2011 Federal tax return.

[2] Ibid., Schedule I, Part II, Section 1, line 4.

Cross-posted and BillGlahn – comments welcome.