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.
While this is an informative post about RISC, I’m not too sure that it shows they did anything wrong or improper. While like Will I disagree with them on tax policy, it seems they filed the necessary forms, their major donors are listed as above, and their positions are honestly stated. It is even plausible to have minimal lobbying expenditures if you don’t hire paid lobbyists. For example, the RI Bicycle Coalition that I belong to lobbies for bike safety issues but it is all volunteers who come to the Assembly when they can and there are no expenses.
As far as RISC positions on “good government” issues, I think progressives should agree with government transparency requirements, ethics regulations, proper reporting of Assembly operations, having an Inspector General, promoting a merit-based philosphy instead of the who-you-know system for hiring/contracting/appointing/grantgiving etc. Those of us who believe govenment has a major role in assuring the social safety net, environmental protection, maintaining infrastructure, and generally serving as a countervailing force to excess corporate power, should be the first to want to combat government corruption and waste in part because it undermines public support for all government programs.
I was a volunteer in the Voter Initiative Alliance that RISC supported, and I urge progressives consider supporting this. Surely the public is more in favor of gay rights, reproductive freedom, fairer taxes, environmental protection, public higher education and such than the Assembly is, so we shouldn’t be afraid of the RI voting public. Indeed note the use of voter initiative in Ohio to overturn anti-labor laws, in Maine for marriage equality, in California for coastal protection and so on. And unlike NC and other states, I can also say the RI version of voter initiaitive was careful to protect civil rights, while requireing a lot of financial reporting, and mandating those proposing tax cuts identify program cuts to balance it, and those proposing new programs identify how it is to be paid for.
My analysis and comparison of RISC’s records raises questions about whether RISC actually did meet its legal reporting requirements. It is difficult to understand how RISC can engage in such massive lobbying efforts year after year after year and report no expenses, except for that one year where they reported less than $5000. Barry – you were part of that Voter Initiative campaign. Did it seem reasonable to you that the cost of that effort was less than $5000?
Then there’s the matter of RISC’s support for political candidates. Again, it seems implausible that they could engage in such massive electoral work and then report spending of only $4200.
Finally, there are the inconsistencies between what RISC reported to IRS and to the Secretary of State.
In the next installment, where I’ll lay out what their IRS 990 reports show on expenditures, there will be issues related to compliance with the tax codes restrictions on political action by 501(c)(3) organizations.
Will,
You are in error regarding comments about OSPRI’s demise, its association with RISC, and my departure.
I left the board and OSPRI long before the Piglet Book was published and I provided no research for it – that was a Stenhouse production. And since he was responsible for the Piglet but was retained to run the organization (albeit under a different name), then obviously the errors in that book had nothing to do with OSPRI’s demise. One should ask why they changed the name.
I also never provided research for RISC. I was a board member for a short time when they were trying to get me to run their RISC Foundation (the c3). Not only did we not work together after that, but they weren’t even supportive of my efforts. Look back over the years – did you see an OSPRI oped or PR in their daily news email? The answer is no – the question you should ask is why?
Perhaps you should do the reporter thing and interview those you are writing about rather than guessing. I’m easy to find.
I can’t speak to the RISC 990 issue as I’m no longer involved with them (not since 2007) but in the efforts of full disclosure and to put it in context, you should do the same review of the Poverty Institute (aka Economic Progress Institute).
I had reviewed the Poverty Institute’s IRS 990 forms for many years and they NEVER claimed any efforts towards advocating for policies. However, all the employees are listed as lobbyists at the RI Sect of State office. Plus Kate Brewster was on the radio just yesterday and said influencing policy is their #1 objective. I see them lobbying at the state house a lot more than RISC. Is it the players or the play that bothers you?
Of course, when I was a student of those who ran the Poverty Institute, they weren’t even a real entity. Just a “project” of the RI College Foundation and were funded by that foundation. However, the employees were still registered lobbyists. As a matter of fact, at Guidestar you will find no record of the Poverty Institute at that time, only the RI Foundation which lists Kate Brewster and Linda Katz as employees. If RISC was run by a public college foundation (funded in part with your tax dollars) would you be ok with that?
Try to be objective and at least make an effort to interview those involved if you want to be taken seriously.
Bill Felkner
If there was any substance to your research, it probably wouldn’t be published on a progressive blog in a two-part story. This is the same political bull crap where the witch hunt becomes the story instead of the reality of the situation. Can we just stick to the issues instead of creating smoke screens? It’s just like Romney’s tax returns. I don’t care anymore about his returns than the President’s birth certificate. Newsflash: the guy is rich.
“If there was any substance to your research, it probably wouldn’t be published on a progressive blog in a two-part story. ”
What are you trying to say about blogs? What are you trying to say about two-part stories?
Are you saying blogs can’t break news?
Are you saying two-part stories can’t break news?
“Can we just stick to the issues instead of creating smoke screens?”
But you’re not sticking to the issues. You have said not one word about the issues. You have only implied that nothing in the post can be true or substantive, because it’s a two-part story on a blog.
“If there was any substance to your research, it probably wouldn’t be published on a progressive blog in a two-part story” DD that is bad even for you.
Lets wait and see what is next. Sticking to just “issues”, while important, is not always the enough in portraying the complete picture.
As an example, Tea Party senatorial candidate Rep. Todd Akin of Missouri took things to a whole new level of right wing nonsense with his views of “legitimate rape”, where his assertions contradict the basis facts about contraception. Akin, by using stupidity and ignorance to justify his stance in favor of outlawing abortion even in cases of rape, shows a shocking lack of knowledge. While the justification can be construed to be non-substantive to the overall issue given its falsity, the lack of basic knowledge reflected in Akin’s statement promotes a justifiable argument that the man is too dumb or too ignorant to even be a senatorial candidate. Who wants someone like that representing them? Akin most likely denies global warming and evolution as well.
The point is there are many considerations to be made when defining just what is important to examine in any issue, and it is in the eye of the beholder to determine. Its not all black or white, no matter what your amygdala is saying. Lets at least hear the rest of this. It has my interest.
I wondered who would be the first to mention Akin. At least there is substance there. The guy is obviously a lunatic. He’s the Republicans version of the Democrat Chris Young although I don’t even think Young would go there. The point is, witch hunts only serve to create misinference. Unfortunately some believe misinference to be fact.