Comer Continues to Investigate Violations of Political Lobbying Restrictions on 501(c)(3) Tax Exempt Entities, Democracy Defenders Fund

WASHINGTON--House Committee on Oversight and Government Reform Chairman James Comer (R-Ky.) is continuing to investigate activity by tax exempt entities and the ability of the Internal Revenue Service (IRS) to identify and enforce related violations of tax laws. State Democracy Defenders Fund is organized as a charitable 501(c)(3) nonprofit that enables donors to deduct contributions from their adjusted gross income for federal tax purposes. In a letter to Ambassador Norm Eisen, Co-founder of the Fund, the House Oversight Committee requests information specifically on activities undertaken by the Fund that appear to advance private financial interests only loosely related to the Fund's official stated purpose.

"The Fund's most recently available IRS Form 990EZ describes the organization's primary tax-exempt purpose in three parts: 1) going against 'democracy deniers' who break the law; 2) defending free and fair elections; and 3) shaping long-term strategy to 'defeat autocracy.' In practice, the Fund's communications appear to heavily focus on opposing and building political opposition to a wide-variety of initiatives by the Trump Administration," wrote Chairman Comer."The Committee's request for information, however, specifically focuses on activities undertaken by the Fund to advance private financial interests that appear only loosely related to the Fund's official stated purpose."

The request for documents focuses on activities undertaken by the fund that appear to advance or target private financial interests including the proposed Paramount-Warner Bros. Discovery merger, law firm Platkin LLP, and Apple Inc. The House Oversight Committee first opened its investigation into political campaigning and lobbying by 501(c)(3) tax exempt entities on February 14, 2024, when sending a letter to IRS Commissioner Daniel Werfel raising concerns that the IRS had been withholding enforcement efforts as they pertained to activist groups engaging in political lobbying. Previous House Committee on Oversight and Committee investigations confirmed that the IRS had wielded its power to systematically target conservative tax-exempt applicants for additional scrutiny, rather than enforcing regulations for all tax-exempt charities and organizations.

"Through these actions, the Committee is concerned the charitable non-profit organization you lead may-possibly without the IRS' awareness-be working on a pay-to-play basis to unethically and illegally ingratiate itself to donors and/or potential donors by taking more than incidental actions to advance their private financial interests. Indeed, 501(c)(3) entities are deemed to not be organized for a charitable purpose if they devote a substantial part of their activities to lobbying efforts and advancing private financial or other business interests are not among the legitimate purposes of a charitable organization organized under section 501(c)(3) if the Internal Revenue Code," concluded Chairman Comer.

Read the letter to State Democracy Defenders Fund here.