Anti-Obama nonprofit tells IRS it's not 'political'

Pro-coal American Energy Alliance says its ads focused on president's 'policies,' not re-election

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Swing state voters in Virginia and Ohio last fall were bombarded with television advertisements encouraging them to "stand with coal" and "vote no on Obama's failing energy policy."

But the sponsor of these ads — a pro-business nonprofit advocacy group called the American Energy Alliance — says the messages weren’t designed to aid Republican Mitt Romney in his bid to unseat President Barack Obama.

In a new tax return filed Friday and first obtained by the Center for Responsive Politics, the American Energy Alliance, led by former Koch Industries lobbyist Thomas Pyle, told the Internal Revenue Service that it did not "engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office" last year.

The group made an even more explicit pledge to be nonpartisan when it applied for tax-exempt status in 2008, telling the IRS that it had "no interest in supporting the agenda or any particular political party or political candidate."

While it acknowledged “the possibility that some of AEA's publications and communications may be considered ‘political,’” the group asserted that it was a “nonpartisan policy-oriented organization,” not a “‘political’ organization.”

The new tax documents also show that American Energy Alliance spent more than $5 million on "media and advertising," with vendor Mentzer Media, a media buying firm that works primarily with Republicans, receiving $3.9 million of that amount.

The “stand with coal” ads cost at least $1.36 million, according to disclosures the American Energy Alliance filed with the Federal Election Commission.

Because these broadcast ads came within 60 days of the November election and mentioned the president, the American Energy Alliance was required to report the spots to the FEC as “electioneering communications” — a special type of issue-based advertising that comes with enhanced disclosure requirements.

The group also engaged in a host of other pre-election activities that often included battleground presidential states and attacked Obama.

Marcus Owens, an attorney who previously headed the IRS’ tax-exempt division, said the American Energy Alliance’s new filing “certainly raises a red flag.”

“It’s a politically active organization,” he said, adding that the pre-election advertisements were veiled in what “sounds like a lobbying message on its face.”

Benjamin Cole, a spokesman for the American Energy Alliance, rejected accusations that his group behaved improperly.

Cole told the Center for Public Integrity that the ads were “designed to inform the American public about President Obama's energy policies… not his re-election efforts.”

“We could just as easily run those same ads today,” Cole continued, adding that all of the group’s ads are vetted by lawyers to “ensure that nothing we do runs afoul of federal election or tax laws.”

One element of the new IRS documents that’s for sure: The American Energy Alliance’s footprint has grown substantially. In all, the American Energy Alliance spent $7 million last year.

That's a nearly seven times what it spent in 2010 — and more than 300 percent above the roughly $1.7 million it spent during its inaugural year in 2008, according to a Center for Public Integrity review of IRS records.

It’s unclear who precisely has funded this surge, although the American Energy Alliance’s new annual report does show that just three donors — who each gave at least $1 million — accounted for three-fourths of the American Energy Alliance’s total $7.3 million haul last year.

As a "social welfare" nonprofit organized under Sec. 501(c)(4) of the U.S. tax code, the American Energy Alliance is not required to publicly disclose its funders.

Notably, the Center for Responsive Politics reported Friday that the American Energy Alliance received $15,000 last year from Americans for Prosperity, a nonprofit backed by conservative billionaires Charles and David Koch, who lead Koch Industries.

And Politico reported last year that the American Energy Alliance — and its related charity — have both received financial support from the Koch brothers themselves and their donor network.

Cole says neither Koch brother contributed to the American Energy Alliance in 2012, “though we'd be happy to accept their contributions in 2013, as well as any contribution from Tom Steyer, George Soros, Warren Buffett or T. Boone Pickens.”

(Update, Nov. 19, 2013, 11:30 a.m.: One of the largest donors to the American Energy Alliance in 2012 was a Koch-connected business group known as Freedom Partners, according to that organization's annual tax return. Called "the Koch brothers' secret bank" by Politico and reportedly funded by donors in the Koch brothers' network, Freedom Partners gave the American Energy Alliance $1.5 million last year. Only one other donor appears to have given more.)

So how did the American Energy Alliance spend the rest of its hefty multimillion-dollar media budget in 2012? The new tax filing, officially known as a Form 990, doesn't itself specify.

But last March, the American Energy Alliance announced plans to spend $3.6 million on ads hitting the president for the price of gasoline at the time.

The ads also criticized Obama for giving "millions of tax dollars to Solyndra," a solar energy company that went bankrupt despite the federal assistance. The California firm was backed by a major Obama fundraiser, as the Center for Public Integrity and ABC News previously reported.

A month later, the American Energy Alliance took its argument to the airwaves of Internet radio service Pandora, where it purchased 45 million spots targeting listeners in the potential presidential battleground states of Colorado, Florida, Iowa, Michigan, Nevada, New Mexico, North Carolina, Ohio and Virginia.

In addition to its pre-election “stand with coal” advertising blitz, the American Energy Alliance also drummed up support for coal with an 18,000-mile, 17-state bus tour.

Its sleek, signature-laden bus traveled through numerous swing states — including Colorado, Florida, Ohio, Pennsylvania and Virginia — as well as portions of the route of the proposed Keystone XL pipeline in the Great Plains.

The bus tour gathered signatures of supporters who desired to "stand with coal" and "support manufacturing jobs."

Conservative commentator Michael Reagan, Fox News host Sean Hannity, Rep. Heather Wilson, R-N.M., and Rep. James Lanksford, R-Okla., were among those who to sign the bus on its journey to Washington, D.C., where the American Energy Alliance ultimately delivered more than 14,000 petitions to lawmakers and regulators.

Moreover, the American Energy Alliance released an extensive infographic comparing Obama's policies and Romney’s prior to Election Day.

"This election year, perhaps even more than 1980, offers voters a clear contrast on energy policy between the two candidates," Pyle said in a press release at the time. "It's time to pull the plug on broken energy policies and chart a new course."

This year, the American Energy Alliance has criticized Obama for wanting to "double down on bad energy policy" and for embracing "punitive and discriminatory tax measures for oil and gas producers."

The group has also urged Congress to let a major tax credit for wind energy expire. And it has praised the budget proposal of Rep. Paul Ryan, R-Wis., for opening "taxpayer-owned lands and waters to responsible energy development."

Environmental groups, such as the Sierra Club, have argued that the Ryan budget is "straight out of the polluters’ playbook" and a "policy that nobody but the big oil and coal billionaires who bankrolled his campaign could love."