IRS complaint: Pro-Whitmer group ducking donor disclosure

Jonathan Oosting
The Detroit News
A new ad from Build a Better Michigan features Democrat for governor Gretchen Whitmer

Lansing — A mysterious group that helped finance election-season ads for Democratic Gov. Gretchen Whitmer failed to disclose its donors and is “trying to elude” legal requirements to do so, a watchdog group says in a federal complaint.

Citizens for Responsibility and Ethics in Washington filed the complaint Wednesday with the Internal Revenue Service and requested an aggressive investigation by the agency, which oversees political groups organized under Section 527 of the IRS code.

Progress Advocacy Trust donated more than $2 million to other political groups that ran television ads featuring Whitmer or attacking Republican Michigan gubernatorial nominee Bill Schuette.

A spokesman previously identified the group as a 527 organization, but it never filed paperwork with the IRS or disclosed any donors, according to records available online. In contribution records from other groups, Progressive Advocacy Trust is described as an “administrative account” of the Ingham County Democratic Party, a claim CREW argues is dubious.  

“The principle behind section 527’s registration and disclosure requirements is that groups that spend most of their time and money on politics must disclose their activities and donors to inform voters about who is trying to influence them and to deter corruption,” CREW Executive Director Noah Bookbinder said in the IRS complaint.

Progressive Advocacy Trust appears to be “erroneously invoking exemptions designed to avoid duplicative reporting in an attempt to escape any disclosure at all,” Bookinder added.  

The Democratic group appears to be modeled after Michigan Advocacy Trust, a mysterious Republican group that funded pro-Schuette ads during his winning 2010 and 2014 campaigns for attorney general.

CREW filed a similar complaint against the GOP group in 2015, alleging it was trying to unlawfully dodge donor disclosure by claiming exemption as an arm of an unregistered local committee political party.

Schuette bashed the complaint at the time, calling it a “hollow, pathetic” attempt to smear him ahead of any future elections, hinting at his ambitions to run for governor. Whitmer defeated Schuette by nine percentage points in November.

Progressive Advocacy Trust donated $1.875 million to 527 group A Stronger Michigan that ran ads promoting Whitmer and attacking Schuette in the general election. It gave $300,000 to a to 527 group Build a Better Michigan.

Build a Better Michigan is the subject of a separate GOP complaint and came under fire during the primary campaign, when Whitmer’s Democratic opponents accused it of funneling “dark money” into the race. The committee released its initial IRS donor disclosure report to the media in July, citing “tired conspiracy theories” by partisan Democrats and Republicans.

Curiously, Progressive Advocacy Trust and Build a Better Michigan appear to share a spokesman, Mark Fisk of the East Lansing-based Byrum & Fisk public relations firm. In an email to The Detroit News on Thursday, Fisk insisted the groups are "completely separate entities and are not connected."

Progressive Advocacy Trust is "a 527 which does not have the same filing and reporting requirements as other 527s under the IRS," he said, without explaining how or why, "so this frivolous complaint has no merit and I’m confident it will be dismissed."

County Chairman Chris Swope declined to say whether Progressive Advocacy Trust is related to the Ingham Democratic Party, telling The News "we have no reply to this." Swope previously directed questions from Bridge Magazine to Fisk.

"The IRS should commence an investigation of (Progressive Advocacy Trust) and must aggressively enforce the law to prevent political organizations from evading the disclosure that is vital to democracy," Brookbinder said in the CREW complaint.

The Michigan Republican Party in June filed a separate state-level complaint against Build a Better Michigan, which was led by Mark Burton, who now serves as Whitmer’s chief strategist. Democratic Secretary of State Jocelyn Benson said last week she is reviewing the complaint.

“The governor and her allies must disclose all of their donors, and she must hold members of her administration who violated campaign finance laws accountable,” Michigan Republican Party spokesman Tony Zammit said Thursday. “Anything less would be a breach of trust with the people of Michigan.

Whitmer’s office declined comment on the IRS complaint or whether Whitmer supports tougher campaign laws to address groups like Progressive Advocacy Trust. Spokesman Zack Pohl noted it is "an independent group that was not associated with the campaign." 

CREW spokesman Aaron Rodriguez said Thursday the watchdog group does know how the IRS responded to its 2015 complaint against the pro-Schuette group Michigan Advocacy Trust.  Per IRS policy, the agency does not directly respond to complainants, he said.

“The only time we hear about any consequences is if the group in question publicly addresses the issue or announces whatever action the IRS may take against them,” Rodriguez said in an email.

Federal records show Michigan Advocacy Trust shut down in September of 2015. The group’s treasurer did not immediately respond to a voicemail seeking comment.