Experts say a Trump-backed charity is pushing the boundaries of tax law

In a Washington, D.C., townhouse just blocks from the U.S. Capitol, multiple figures connected to the failed plot to overturn the 2020 election have coalesced around an increasingly influential organization: the nonprofit Conservative Partnership Institute (CPI).

Among those at the center of the group are former White House chief of staff Mark Meadows and former Trump campaign lawyer Cleta Mitchell. Both Meadows and Mitchell have been subpoenaed by a grand jury as part of a Georgia district attorney's investigation into former President Donald Trump's effort to overturn the election.

An NPR review of social media accounts, campaign finance records and leaked audio suggests that CPI may be risking legal trouble as well over its tax-exempt status. Experts in tax law told NPR that the nonprofit group appears to be pushing the boundaries of charity law by closely entwining itself with explicitly Republican and pro-Trump political organizations.

"If I was looking at this as an IRS agent or as an outside lawyer for that matter, I would say there's enough here that I want to do some digging," said Lloyd Hitoshi Mayer, an expert in nonprofit law at the University of Notre Dame School of Law. "There are definitely yellow flags here."

As an IRS-recognized charity, CPI is exempt from certain federal, state and local taxes. That status also gives CPI's donors the lucrative benefit of deducting their contributions at tax time. But, as Mitchell herself has noted, those benefits come with some strings attached by federal law.

"We are a nonpartisan, educational, charitable organization," Mitchell told the audience for a CPI "Election Integrity Summit" in March. "We don't endorse candidates. We don't endorse political parties."

Mitchell's comment that day about CPI remaining nonpartisan was conspicuous given the event's programming, which involved a collaboration between CPI, the Republican National Committee and other conservative groups.

The IRS has an "absolute" ban on charities from participating — both "directly" and "indirectly" — in any political candidates' campaigns. In general, these groups are allowed to comment on political issues. Charities can even get involved in nonpartisan voter registration, but are more tightly restricted when it comes to candidates and campaigns. The IRS also prohibits charities from working significantly for a non-charitable "private benefit," as opposed to the public good. In one landmark case, the IRS revoked a group's nonprofit status for providing benefits to a political party. Organizations that violate the law can also be hit with tax penalties.

At CPI's event in Pennsylvania, according to leaked audio obtained by the investigative watchdog organization Documented, two RNC "election integrity" officials told the audience about how to enlist in the party's poll watching efforts in the 2022 midterms. Those efforts, they said, could help with the Republicans' election-related legal challenges.

The room also buzzed with support for Trump's past and possibly future campaigns.

"Donald Trump did not lose Pennsylvania!" said a Republican county commissioner. (President Biden defeated Trump in Pennsylvania by more than 80,000 votes in 2020.)

"I was on Trump's campaign in 2016, I was on in '20. Hopefully, I'll be on in '24 if he hires me," said another speaker, Mike Roman.

A local Tea Party leader asked the crowd, "How many of you would like to see Trump run again?"

After some applause, he added, "Why would Trump run again? Because he loves America."

Twitter accounts from CPI have also explicitly discussed political candidates.

The account for CPI's Election Integrity Network has retweeted the campaign accounts of U.S. Rep. Lauren Boebert, R-Colo., as well as Kari Lake, the Republican candidate for Arizona governor.

"That's no different than CPI handing out copies of the campaign's campaign literature," argued the University of Notre Dame's Mayer. "That violates the prohibition on campaign intervention."

The Election Integrity Network also tweeted an article that criticized the campaign of Wyoming Rep. Liz Cheney ahead of her primary election, which she ultimately lost to a Republican rival.

"That's also across the line," asserted Mayer, who noted the law has "zero tolerance" for charities and political campaign activity.

Another official CPI Twitter account also promoted an op-ed from its chairman, former Republican Sen. Jim DeMint, about what congressional Republicans should do to win the 2020 election. (DeMint's advice: "be more like Trump.") After NPR contacted CPI for comment and asked about that post, every tweet from CPI from before March 2022 was deleted.

CPI declined to answer specific questions for this story on the record. In an emailed statement, a spokesperson for CPI said, "the Conservative Partnership Institute fully complies with the IRS rules on tax-exempt organization activity. CPI does not engage in any political campaign activity."

The IRS declined to comment.

What is CPI?

The Conservative Partnership Institute has rapidly staked out territory in Washington, D.C., as a central hub for the pro-Trump wing of the Republican Party.

The staunchly conservative DeMint founded CPI in 2017 after a stint at the head of The Heritage Foundation. DeMint ascended in the Republican Party around the time of the 2010 Tea Party-backed wave election, and was widely considered a conservative "kingmaker." On paperwork filed with the IRS, CPI defined its mission as providing "the conservative movement with the tools, tactics, resources, and strategies to help make it successful in advancing conservative policy solutions." Charities are allowed to advocate and discuss issues from an ideological perspective, even if that perspective is more closely aligned with one political party or another, as long as they tread carefully when discussing specific candidates or groups of candidates.

In addition to Meadows, other members of the Trump administration also joined CPI and its connected entities, including former White House speechwriter Stephen Miller and former Department of Justice lawyer Jeff Clark. Like Mitchell and Meadows, Clark has also faced investigation for his role in trying to overturn the 2020 election, and FBI agents executed a search at his home earlier this year.

CPI has dramatically increased its fundraising since its inception, and raised nearly $20 million in 2021, according to their annual report. As a nonprofit, CPI does not have to publicly disclose its donors. Federal Election Commission records, however, indicate that Trump's "Save America" political action committee gave CPI $1 million in 2021, and Trump has promoted CPI's work.

In addition to "election integrity" events held around the country, CPI says it has provided media, marketing, accounting and legal services for conservative members of Congress. The organization has compared itself to a "WeWork" space for conservatives, where they have access to TV and podcast recording studios. CPI boasts in its 2021 annual report that it hosted multiple Republican lawmakers' podcasts, including Rep. Ken Buck's "Shootin' Straight with Ken Buck" and Rep. Andy Biggs' "What's the BIGGS Idea?" The group also said it provided training to dozens of conservative members of Congress and more than 200 congressional staffers in 2021.

CPI has played a key role in developing plans to fire tens of thousands of career federal workers in a second Trump administration, according to reporting from Axios.

Many of the legal restrictions on CPI's activity comes from its status as a charity under section 501(c)(3) of the tax code. Different kinds of tax-exempt nonprofits have much more freedom to get involved in politics. 501(c)(4) "social welfare" organizations like the National Rifle Association and the League of Conservation Voters, for example, have become key players in political contests.

But 501(c)(3) groups have a key advantage that 501(c)(4) organizations lack: Their donors can deduct their contributions.

"You can provide long-lasting support for the Conservative Partnership Institute while enjoying financial benefits for yourself," CPI says on its website. The site includes information on how people can include CPI in their wills and get a deduction on the estate tax, for example, or donate stock to reduce their capital gains tax. The Election Integrity Network project of CPI also separately solicits "tax-deductible" contributions. And CPI has reportedly received donations from some mega-rich individuals.

Campaign finance records and leaked audio raise more concerns for CPI

Campaign finance records have indicated that three Republican candidates --Colorado's Boebert, Sen. Mike Braun, R-Ind., and Sen. Mike Lee, R-Utah, — paid CPI thousands of dollars for "campaign events" and "fundraising events" in 2021.

If those records are accurate, Mayer said, they could raise serious concerns for CPI.

"CPI can't be hosting campaign events for anybody," said Mayer, "unless they were, for example, hosting them for anybody across the political spectrum."

FEC records do not indicate any Democratic campaign has paid CPI for any purpose.

After NPR asked about those records, the Lee campaign amended its FEC filing to state that it paid CPI for "food and beverage" rather than "fundraising events."

"Upon review, the filing has been amended to reflect the more accurate nature of the payment which was to cover the cost of food and catering for dinners attended by various U.S. Senators related to their official duties," said Lee campaign adviser Matt Lusty. "These funds were not disbursed to facilitate fundraising events."

The Boebert and Braun campaigns did not respond to NPR's requests for comment. FEC disclosure forms state that there are potential legal penalties for filing "false, erroneous, or incomplete" information.

Leaked audio from another CPI "election integrity" event in March 2022 raised other potential concerns.

At that event, Florida Gov. Ron DeSantis told a crowd that Republicans had recently made big progress in registering more voters than Democrats. Then, DeSantis said to cheers from the audience, "We need everybody to come out and really, really have a huge, huge November in the state of Florida. I think there's gonna be opportunities to do a lot of great things across the country — House, Senate, governors' races."

DeSantis is currently running for reelection. DeSantis' press secretary, Bryan Griffin, told NPR that, "this was not an official event," as part of his duties as governor.

Philip Hackney, a former lawyer in the IRS' office of general counsel, said if he was CPI's attorney, DeSantis' appearance "would give me heartburn."

Charities can invite political candidates to their events in a non-candidate capacity. But, in those cases, the IRS says the charity must then maintain "a nonpartisan atmosphere" and ensure "no campaign activity occurs in connection with the candidate's attendance."

Mitchell has tried to get ahead of scrutiny of CPI's nonprofit status by suggesting the group would also provide a platform for Democrats at its election integrity events, even though the events are largely premised on the false claim that Trump won the 2020 election. One event even featured an activist who promoted the QAnon conspiracy theory.

"I've written letters to the Democratic Party saying, 'would you like to participate with us in our sessions?'" Mitchell said at an event in Pennsylvania earlier this year. "I have not yet gotten a response."

Representatives of the Democratic National Committee and the Pennsylvania Democratic Party said they were unaware of receiving any invitation from Mitchell to that event, but said they needed more information to be certain — especially if an email was sent to, for example, a general inbox.

NPR called and emailed Mitchell multiple times and asked about whom she might have contacted without receiving a response. When Mitchell eventually answered her phone, she said she was out of the country, and added, "I'm not going to talk to you anyway," before hanging up. CPI declined to provide documentation or answer questions about Mitchell's assertion.

Is CPI providing a "private benefit" to Republican Party groups?

In addition to the concerns about overlapping with political campaigns, tax experts told NPR the group is risking additional scrutiny about whether it's operating for the benefit of Republican Party entities.

Mayer and Hackney both pointed to the facts in a case from the 1980s, which bears striking similarities to the situation with CPI.

In 1986, staffers with the National Republican Congressional Committee incorporated the American Campaign Academy as a charity with the mission of training people to work on political campaigns.

The IRS and the U.S. Tax Court found that American Campaign Academy was acting "more than incidentally" for the private benefit of the Republican Party, in part because trainees were on to work for predominantly Republican candidates and officials. As part of its analysis, the court noted that the American Campaign Academy "had significant ties to the Republican party."

In addition to podcast and media services for Republican elected officials, CPI has also spent tens of thousands of dollars to fly dozens of conservative Republican members of Congress to policy retreats hosted at luxury resorts.

A February 2021 retreat took place at the Biltmore Hotel in Coral Gables, Fla. A year later, CPI also paid for representatives' flights and lodging for a retreat at the oceanfront Ritz-Carlton resort on Florida's Amelia Island. Nearly all of the invitees were members of the staunchly conservative House Freedom Caucus, including Rep. Jim Jordan, R-Ohio, Rep. Paul Gosar, R-Ariz., and Rep. Scott Perry, R-Pa.

CPI's collaboration with the RNC on "election integrity" events is also reflected in the group's downloadable "Citizens Guide To Building An Election Integrity Infrastructure." The guide asserts that it is nonpartisan, but also specifically references how people can work with "the local GOP."

"If you simply work for one party or the other, you are likely stepping over the line," said Hackney, who is now a law professor at the University of Pittsburgh.

Lax IRS enforcement generally

Groups like CPI may be more willing to push the boundaries of charity law because of an overall lack of IRS enforcement.

"There's very little enforcement at all in the IRS in general, much less among the [tax] exempt organizations part of it," said Ellen Aprill of Loyola Law School.

Between 2010 and 2018, the IRS lost 15,000 enforcement employees, which, unsurprisingly, led to less enforcement.

Nearly 1.5 million tax-exempt organizations filed tax returns in 2019, according to a report from the Treasury Inspector General for Tax Administration. Of that large group, only about 2,000 — or 0.13% of the total — were even examined by the IRS.

In the last two decades, the IRS has also faced significant blowback when it looked into whether tax-exempt groups were violating rules around political campaign activity.

In 2004, the IRS launched an audit of the NAACP in response to a speech that criticized then-President George W. Bush and his handling of the Iraq War. The NAACP and Democrats angrily denounced the IRS action, and the NAACP was ultimately cleared of any wrongdoing.

In 2013, the IRS faced even more criticism from conservatives for allegedly improperly targeting conservative Tea Party groups seeking tax-exempt status. The IRS official at the center of the controversy, Lois Lerner, resigned under pressure. A subsequent bipartisan Senate investigation and an investigation from a Treasury Department inspector general found that the IRS had acted improperly with both liberal and conservative-leaning groups, by screening for keywords linked to Occupy Wall Street as well as the Tea Party. Republican and Democratic congressional investigators ultimately split on the question of whether the IRS singled out conservative groups due to political bias.

"The IRS was so hammered during the Tea Party controversy that you're just not seeing enforcement in these cases," said Hackney.

Aprill agreed, saying that the controversy, "seems as if it has burned their fingers some."

Before joining CPI, Cleta Mitchell worked as a lawyer for conservative groups that accused the IRS of targeting. She said the agency was illegitimate, and called for a radical solution: amend the Constitution to eliminate federal income tax, and "abolish the IRS."

"It has too much power, too much money, too many employees and it needs to be absolutely jerked out at the roots," Mitchell told Congress in 2014.

After losing staff and resources over the last several years, however, the IRS has recently received a major infusion of funding from the Inflation Reduction Act recently passed by Democrats and signed by President Biden. The IRS has said "it will take time" to implement the law, and it remains to be seen whether more funding will lead to additional scrutiny of groups like CPI.

Copyright 2022 NPR. To see more, visit https://www.npr.org.