“Americans for Prosperity is an issue client that we’re not required to keep anything in the file for” issue ads, said Ariana Dobson, who sells political ads for Comcast in the Denver-area.
According to Zvonek, the organization didn’t have to file records of its spending with the Colorado Secretary of State the way political action committees and other election-focused groups did because the campaign wasn’t focused on the November election, but rather on educating the public about reforms the existing school board already implemented.
“There was an effort primarily from the teachers union to kind of distort the facts,” Zvonek said.
The difference between an issue ad and a political ad may seem indecipherable to the average viewer, but when it comes to what a nonprofit can and can’t do with its money, state and federal laws make a critical distinction.
Colorado requires groups to report electioneering to the Secretary of State. State law defines electioneering as any message that “unambiguously” refers to a candidate and is broadcast 60 days or fewer before a general election.
The ad described above began running the week of Oct. 8, according to AFP’s website. Election Day was Nov. 5.
Colorado Secretary of State spokesman Rich Coolidge declined to say whether the ads run by Americans for Prosperity would be considered electioneering without someone filing a complaint against the group.
But Joseph Birkenstock, former chief counsel of the Democratic National Committee, said the ad appeared to fit squarely within the state’s electioneering qualifications, which, he noted, are broader than the federal electioneering rules.
The Americans for Prosperity Foundation’s status as a 501(c)(3) nonprofit organization also prohibits the organization from engaging in partisan political activity. IRS rules allow 501(c)(3) nonprofits to participate in nonpartisan education efforts, like a voting guide or voter registration drive, but not activities that clearly favor one candidate over another.
The IRS takes a fairly strict view of what sort of activity is considered partisan where 501(c)(3)’s are concerned, according to Marcus Owens, a former IRS director of exempt organizations.
“It includes arguably anything that indicates a support or opposition to a candidate for elected office,” Owens said. “You don’t have to have the magic words of ‘vote for,’ or ‘vote against.’ You just have to express a preference for them.”
The IRS also takes into consideration factors like timing — whether the ad ran exclusively in the run-up to an election — and if the ads are consistent with others the organization runs year-round.
Based on these factors, Americans for Prosperity’s Douglas County ads would be considered partisan and would violate the group’s tax-exempt status, Owens said.
“It’s advertising that appears only in the run-up to the election, it names individuals who are candidates and clearly will be identified as candidates by other media, and it expresses a preference for them. That’s campaign intervention.”