Rhode Island’s
leading conservative political action group reports that it spends almost NO
MONEY on political action
By Will Collette
Recently, I reported on the major leadership changes in the Rhode Island Statewide Coalition (RISC)
and their plan to move out of their long-time headquarters in Charlestown to
new quarters in the metro area (they’ve moved to West Warwick).
RISC is Rhode Island’s most prominent right-wing political
organization. They’re always getting mentioned in the news when they criticize
unions, public workers, Democrats, spending, taxes, etc.
They
were originally founded to fight against the Narragansett Indian Tribe and to
promote voting rights for out of state people who own shoreline estates. Over
the years, they diversified their issue portfolio to its present, generalized
attack on Rhode Island working people. They now list among their coalition
partners the Tea Party, Operation Clean Government and a motley collection of
local anti-tax groups.
Their relationship with the Charlestown Citizens Alliance is
unacknowledged, but they
share the same DNA.
RISC is also a big promoter of open, honest and transparency
in government – although as you read on, you’ll see that these principles only
apply to other, but not to themselves. You can see where the CCA picked up its values, and as you read on, their practices.
RISC was all over last year’s pension deliberations in the
General Assembly building the case that it’s better to rob the pensions of
teachers, firefighters, police and public workers than to raise taxes on the
rich. This year, they were all over the Governor’s tax proposals and the budget
to make sure they didn’t raise taxes on the rich. They seem to have a
gavel-to-gavel lobbying presence at the Capitol.
And during election seasons, they spend a lot of energy
promoting their slate of conservative candidates. In the 2010 election cycle,
they had a slate of 22 candidates for Rhode Island General Assembly seats.
It’s MAGIC!
And
they manage to do all this by scarcely
ever spending any money on political action. At least that’s what it says
on their state and federal reports.
A close look at RISC shows that they have a non-profit,
tax-exempt foundation, the RISC Foundation, that can accept foundation grants
and large, tax-deductible donations from out-of-state moguls who happen to own
property in and around Shelter Harbor[1]. Under
the tax code, the RISC Foundation is strictly limited to doing charitable and
educational work. But a close examination of their tax returns shows
this tax-exempt “foundation” does a whole lot more.
RISC itself is a separately incorporated a non-profit
organization although the boards of RISC and RISC-F overlap. They also share
the same quarters and staff and RISC-F pays for much of the two organizations’
expenses.
Under 501(c)(4) of the tax code, RISC can and does engage in political action, but the consequence of
that choice is that its donors cannot deduct their donations. Read on to see
how RISC works around that problem.
Then there’s the RISC Political Action Committee (PAC) which
is where the rubber hits the political road. RISC PAC is supposed to be the arm
of RISC where things like candidate endorsements, campaign contributions and
direct political lobbying takes place.
 |
| What money? We didn't spend any money. |
This is where RISC has made its mark as the #1 right-wing
Republican political powerhouse in Rhode Island.
However, according to campaign finance reports and the
state’s database on lobbyists, they do it by spending almost nothing to support its candidates or lobby the General
Assembly on its issues.
Pretty amazing.
Of course, RISC has the right to engage in lobbying, political
action and electoral campaigning, so long as it abides by the rules.
There are very specific rules under state law and the federal tax code that
govern what kind of political action the charitable, educational 501(c)(3) RISC
Foundation can do (almost none), what RISC can do under its 501(4) status (quite
a bit) and what the RISC-PAC can do (almost anything).
There are reporting requirements that must be followed by
all three entities.
Like its offspring, including
the Charlestown Citizens Alliance (CCA), RISC is big on demands for open
and transparent government. It is also big on fairness for rich people who are,
apparently, an oppressed minority subject to brutal discrimination.
For years, they echoed the claims of another one
of their offspring, the late Ocean State Policy Research Institute (OSPRI),
that Rhode Island was driving rich people away through its tax policy, when in
fact, the opposite is true. Then, OSPRI died, having been caught
fudging its data once too often.
First, let’s take a look at how well RISC practices what it
preaches on openness and transparency.
RISC and the RISC Foundation file annual 990 reports with
the Internal Revenue Service[2]
that cover where their money comes from and how they spend it.
According to their IRS-990 reports, the two organizations take in an average of just under $300,000
a year according to the last three reports on file at Guidestar.org.
The really big bucks go to the RISC Foundation. In their
last three IRS-990 reports on file, RISC-F raised $506,648. Of that $440,186 came from out
of state – that’s 87%. The largest sums come from Florida.
By comparison, RISC raised $377,630 during that same period.
The donations to The RISC Foundation are tax-deductible
while donations to RISC are not. Much of this tax-deductible money comes from
RISC and RISC-F board members[3].
RISC’s income is harder to trace. Much of it comes from
unsourced “donations” and “membership.” Some of it comes from money transfers
from the RISC Foundation.
Since there is a significant time lag in the filing of
IRS-990 reports (e.g., the most recent RISC reports cover the fiscal year that
ended September 30, 2009), I project that RISC has raised around one and a
quarter million dollars since 2007. Most of it was in the form of
tax-deductible donations, and most of the tax-deductible donations came from out of
state.
I believe my projections of RISC’s income are conservative.
The 2010 election cycle was big for RISC, and the IRS 990 reports for that year
are not yet available online. In 2011, RISC’s campaign to cut public worker
pensions gave it some of the most notoriety it has ever had, the kind of fame
that often translates into money.
RISC-PAC
RISC’s Political Action Committee was set up by RISC founder Harry Staley on December 16, 2005. According to its filings with the RI Board
of Elections (BOE), it took no part in the 2006 elections. It raised nothing
and spent nothing. Then Staley dissolved the group in December 2006.
He reactivated RISC-PAC in November 2008, but too late to take
part in that election cycle.
According to its filings with the RI Board of Elections,
RISC-PAC raised $4,200 in the 2010 election cycle and gave out exactly that
amount just before Election Day, in the form of $200 checks, to 22 candidates
for the state Senate and House.
So far,
according to their filings with the Board of Elections (which are current), RISC-PAC has raised nothing and spent nothing for the 2012 election cycle. They have not
filed a declaration with the BOE stating which candidates or ballot questions
they plan to support or oppose.
It’s certainly mystifying how RISC can be such a political
player and report so little of its resources being used to advance its
political objectives.
As for their lobbying in the General Assembly, there too,
RISC is required by law to report on their expenditures. Regular reports, plus
an annual cumulative reporting on lobbying activities, must be filed with the Secretary
of State.
RISC also had to report its lobbying costs to IRS on its
annual 990 reports. Interestingly, in 2008, RISC reported $6,190 in lobbying
expenses to IRS and another $3,451 in 2009 but zero to the RI Secretary of State.
However, in both those years, RISC told the RI Secretary of State that it had no lobbying expenses.
Online copies of the state records are available by clicking here. The
database is clunky, but the records going back to 2005 are there. According to
this database, the RI Statewide Coalition spent zero on lobbying from 2005 to 2012, except for one year – 2006 –
when it reported spending just under $5,000[4].
In the next installment, I will go into where RISC and the
RISC Foundation say the money goes.
[1] It’s not a coincidence that half of the founders of
the Shelter Harbor Golf Club were also founders and board members of RISC and
the RISC Foundation. Accord to its website, Shelter Harbor Golf Club’s Founders
were Mr. H. James A. Atwood; Mr. Finn
M.W. Caspersen; Mr. Frederick Maynard, III; Mr. Robert C. McCormack; Mr. Stephen M. Peet; Mr. Charles M. Royce
and Mr. Frederick B. Whittemore.
[2] To get a
look at these IRS-990 reports for yourself, go to Guidestar.org and register (for free).
Then, you can use their database to look up the last five filings for just
about every nonprofit organization in the United States. Guidestar is by far
the most popular way to get detailed information on nonprofits.
[3] These
include RISC’s founder Harry Staley himself, who gave a tax-deductible donation
of $15,600 to the Foundation. Other board donors include the late Finn
Caspersen ($25,000); Frederick Whittemore ($10,000); John P. Duffy ($20,086);
James Birle ($20,000) and Robert McCormack ($5,000)
[4] That was
the year RISC, then called the Shoreline Coalition, spearheaded the Voter
Initiative Alliance. Because of their extensive lobbying on this issue, the RI
Board of Election ruled that RISC needed to register as a Political Action
Committee. For at least that one year, they reported lobbying expenses to the Secretary of State, but not
since despite its extensive lobbying activities and electioneering.