Recently, I reported in Progressive Charlestown about 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 shoreline property owners. 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.
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.
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 Watch Hill and 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 than charity and education, at least as it’s commonly understood.
RISC itself is a separately incorporated a non-profit organization although the boards of RISC and RISC-F overlap substantially. 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.
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.
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.
FOOTNOTES
[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.
Only 68 Rhode Islanders have applied for civil union licenses since the state passed a law allowing same sex couples to obtain these relationship licenses in lieu of full marriage equality in 2011, according to numbers the RI ACLU said it got from the Department of Health.
