Introduction

Screenshot from a 60 Plus Association ad endorsing Republican Mitt Romney ahead of the November 2012 election. (YouTube)

The 60 Plus Association — a nonprofit senior citizen advocacy group funded largely by billionaire businessmen Charles and David Koch’s conservative political network — appears to have vastly understated its level of election spending on federal tax filings, a Center for Public Integrity review of documents indicates.

The Virginia-based organization told the Federal Election Commission that it spent about $4.6 million on political ads and “voter contact” phone calls endorsing or denouncing federal candidates during the three months prior to the 2012 election.

But it reported spending a mere $35,000 on “direct and indirect political campaign activities” during its entire 2012 fiscal year to the Internal Revenue Service. It didn’t count toward that amount $4 million in spending it reported separately as “educating seniors by influencing the election of political candidates.”

It’s a felony to “willfully” file IRS tax returns containing fraudulent information.

Whether the organization violated the law is difficult to say given the vagueness of the government statutes that regulate nonprofits, but it does appear the group is using aggressive accounting to come across as less political — a move that could help it avoid IRS scrutiny.

Reached July 22 via email, 60 Plus Association spokesman Gerry Scimeca wrote, “Very busy day, will respond when I can.” Scimeca did not respond to numerous follow-up attempts seeking information about the apparent discrepancy.

The 60 Plus Association is a so-called “social welfare” nonprofit, organized under Section 501(c)(4) of the tax code. Such organizations are prohibited from making electoral politics their primary purpose. They are not required to publicly disclose the names of their donors — unlike candidates, parties and political action committees that are.

Campaign finance reform advocates for years have called on the IRS to investigate politically active nonprofits that spend significant portions of their budgets on election-related ads, but the agency has been slow to act. At the same time, the IRS has found itself embroiled in multiple congressional investigations regarding its alleged targeting of conservative nonprofits for additional scrutiny during the tax-exempt application process.

Discrepancies in reported political spending?

Source/Methodology: FEC data and IRS documents covering political spending from July 1, 2010, through June 30, 2013. FEC figures relate to spending to advocate for or against federal candidates. IRS figures relate to “direct and indirect political campaign activities.”

The 60 Plus Association’s apparent reporting discrepancies first began during the 2010 midterm elections, federal records indicate.

The group, which touts “a free enterprise, less government, less taxes approach to seniors issues,” spent about $6.7 million that year on advertisements that mostly attacked Democratic candidates, according to FEC records. When it later filed its required annual tax return with the IRS, it initially told the agency it spent about $7.2 million on “direct and indirect political campaign activities.”

Eighteen months later, in November 2013, however, the group amended that filing, changing the $7.2 million figure to $103,000.

The amended filing, which has never previously been reported, included a note saying the form was “now properly completed to reflect the organization’s political activities” — without further elaboration.

The group also asserted in the filing that it spent $7.2 million to “provide educational awareness about the effects of healthcare reform for seniors including influencing the election of political candidates and certain legislative initiatives.”

Adam Rappaport, senior counsel at the advocacy group Citizens for Responsibility and Ethics in Washington, called the 60 Plus Association’s actions “simply outrageous” and not compliant with the law.

“This definitely merits a complaint,” Rappaport continued, arguing that both the IRS and Department of Justice should take action against the conservative-leaning nonprofit.

Cleta Mitchell, a Washington, D.C.-based attorney who represents numerous conservative groups, offered this potential explanation: Nonprofits may divide up how election-related ads are accounted for “based on time.”

Assume, for instance, that a nonprofit like the 60 Plus Associations spends $1 million on a series of 30-second television ads attacking a Democratic politician for supporting an issue such as Obamacare.

But, say, only five seconds of the ad directs urges viewers to vote against the candidate.

The nonprofit, Mitchell argued, could then report only a small portion of the $1 million as political spending, while the rest would be deemed “educational expenditures.”

Other tax lawyers don’t buy it.

“I don’t know of any way you can legally come to the reporting position they’ve taken,” said Marcus Owens, a former director of the IRS exempt organizations division. “It’s kind of a thumb in the eye of the IRS.”

At minimum, Owens continued, the 60 Plus Association is “asking for an audit.”

James L. Martin, chairman of the 60 Plus Association, speaks to seniors in St. Petersburg, Fla.

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Founded in 1992, the 60 Plus Association is led by James L. Martin, a former journalist who served as chief of staff to a Republican senator during the 1960s.

Its president is Amy Noone Frederick, a political professional whose husband formerly served as the chairman of the Republican Party of Virginia. Iconic singer and actor Pat Boone serves as its national spokesman.

The association describes itself as nonpartisan, but it generally backs Republican candidates.

For years, the group’s budget typically hovered between $1 million and $2 million.

But during the five most recent fiscal years for which it has reported, the 60 Plus Association raised more than $67 million, or about $13 million per year.

This funding spike roughly aligns with the U.S. Supreme Court’s Citizens United v. Federal Election Commission decision in 2010, which allowed nonprofits like the 60 Plus Association to call for the election or defeat of political candidates — so long as the spending is not coordinated with the candidates they support.

Tax records show that the 60 Plus Association’s burgeoning budget is due in large part to the Koch brothers’ political network, which also has flourished since the Citizens United decision.

Click the slices to view more information about specific donors.

Methodology: Contributors listed gave between July 1, 2008, and June 30, 2013, based on data from the Federal Election Commission, Internal Revenue Service, Center for Responsive Politics and CitizenAudit.org.

According to a Center for Public Integrity review of federal tax documents and data collected by the Center for Responsive Politics, five nonprofits that are part of the Koch brothers’ network supplied nearly $42 million — about 60 percent — of the more than $67 million raised by the 60 Plus Association from mid-2008 to mid-2013.

The Koch-connected Center to Protect Patient Rights alone transferred about $17 million to the 60 Plus Association from 2009 to 2012, according to tax records.

And the nascent Freedom Partners Chamber of Commerce, which Politico dubbed “the Koch brothers’ secret bank,” contributed nearly $16 million to the 60 Plus Association from November 2011 to December 2012.

Another top 60 Plus Association donor is the Iowa-based American Future Fund, a nonprofit that has itself received tens of millions of dollars from the Center to Protect Patient Rights and Freedom Partners.

In 2012, the American Future Fund gave the 60 Plus Association $4.55 million. This appears to account for about one-fourth of the nearly $19 million the association raised during its 2012 fiscal year, which ended on June 30, 2013.

In recent years, the 60 Plus Association has also received smaller amounts from a handful of other advocacy organizations, according to a Center for Public Integrity review of tax documents maintained by CitizenAudit.org.

They include never-previously reported donors such as Milwaukee-based Mobile Consumers for Choice and Competition (about $200,000), Atlanta-based Citizens for a Digital Future ($92,000), Indianapolis-based Coalition for the New Economy (about $15,000) and Phoenix-based Coalition for a Connected West ($10,000).

So far this year, FEC records show the 60 Plus Association has spent more than $250,000 on political ads, mostly in Nebraska’s GOP U.S. Senate primary, where it endorsed Midland University President Ben Sasse, who ultimately won the contest. The group has also been active at the state level, spending more than $240,000 to date on attack ads in Arizona’s upcoming GOP gubernatorial primary.