The American Tradition Institute, a conservative nonprofit that lost a controversial lawsuit against the University of Virginia seeking the emails of former professor and leading climate scientist Michael Mann, claims that it wants to promote greater transparency of how tax dollars are spent.
But ATI is less than transparent about its own nonprofit tax status. In fact, it recently violated Internal Revenue Service regulations by denying a request for tax documents that it is supposed to make publicly available. Meanwhile, the IRS documents obtained through a Freedom of Information request raise questions about whether the group has engaged in political activity prohibited for a nonprofit like ATI.
The discovery comes amid questions over whether ATI's sister nonprofit, the Colorado-based American Tradition Partnership, misled the IRS in its own tax filings.
I began looking into the tax status of ATI a year ago as part of my ongoing investigation into the group, which has offices in Washington, D.C. and Denver. My reporting revealed ATI's extensive dirty-energy connections and efforts to use the Freedom of Information Act to discredit Mann and other climate scientists. I got a copy of the group's 2010 Form 990, the organization's annual report to the IRS, from the Foundation Center's 990 Finder database.
The group's publicly available 990, dated May 25, 2011, raised questions about whether ATI had engaged in prohibited political activities. ATI is a 501(c)(3) tax-exempt nonprofit, which under IRS rules is forbidden from engaging in political activity. But on the 990 I obtained from the Foundation Center, the group answered "Yes" to the question, "Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office?" The form was signed by ATI director Dan Reed and was prepared by Scott Shires of the Aurora, Colo.-based Shires Financial Group.
After contacting ATI, I heard back from Reed, who has also served as a spokesperson for the Western Tradition Partnership, now known as the American Tradition Partnership, a Colorado-based 501(c)(4) "social welfare" nonprofit backed by fossil fuel interests from which ATI spun off. (Unlike a 501(c)(3), a 501(c)(4) can participate in political campaigns as long as that is not its primary activity, and it does not have to disclose its donors.) ATP and Shires have a rather dubious history, as I reported:
[The Western Tradition Partnership] was first registered as a Colorado nonprofit in 2008 by Scott Shires, a Republican operative with a checkered past: He was fined over $7,000 for campaign finance violations in Colorado, pleaded guilty in a scheme to fraudulently obtain federal grants for developing alternative fuels, and was tied to an illegal gambling ring. WTP was active on behalf of oil and gas industry interests in the 2008 commissioners race in Garfield County, a center of Colorado's energy industry.
On Oct. 28, 2011, Reed emailed me what he said was an amended 990 report, which he claimed had been filed with the IRS but may not have appeared on public websites. However, the amended form he sent raised the same questions. Prepared by certified public accountant George M. Vogler of Colorado -- but neither dated nor signed -- the new report specified that the group was in fact a 501(c)(3). But it still indicated ATI had engaged in prohibited political campaign activities on behalf of or in opposition to candidates for public office.
I then contacted Paul Chesser, who at the time was serving as ATI's executive director, and asked him about the reported campaign activity. I again heard from Reed, who told me the revised 990 he had sent me "was a draft, not the final." He said he would send me the official copy.
Thirty-seven minutes later, Reed sent another Form 990, this one with his signature and dated Oct. 17, 2011. It reported that ATI was a 501(c)(3) and did not engage in direct or indirect political campaign activities on behalf of or in opposition to candidates. That was the version I linked to in my story, which did not bring up the issue of political activity by ATI.
Fast-forward nine months to July 2012. While reporting on ATI's more recent activities, which have included targeting other scientists' emails, I returned to the Foundation Center website to see if there were any new tax filings for the group. I was surprised to find the only ATI document in the database was the same one I found there last October -- the May 25, 2011 version prepared by Shires that indicated the group had engaged in prohibited political campaign activities. The revisions Reed had shared with me had not made their way to the database.
I contacted ATI and heard back from Tom Tanton, the group's new executive director and an energy industry consultant. He told me that relying on documents available via third-party websites would not represent "due diligence" on my part, and he reiterated Reed's assurance that ATI has not campaigned for or against candidates for office.
"I'm sure you can understand the potential for harm if you write something based on information you know to be out of date," Tanton wrote in his email.
He advised me to go directly to the IRS. I then asked him to provide a copy of his group's IRS filings. Under IRS Public Inspection 6104(d) regulations, a nonprofit must provide copies of its three most recent 990s to anyone who requests them, whether in person, by mail, fax or email. Tanton did not respond to my request. So I submitted a FOIA request to the IRS for the group's most recent tax filing.
The document on file at the IRS was the same Form 990 that I had originally downloaded: Dated May 25, 2011 and prepared by Shires, it reported that the group had engaged in banned political activity. Apparently the revised form Reed had produced for me still had not made its way to the IRS, which also reported that the group's 2011 Form 990 was not yet available as it had received a filing extension.
Why did the IRS not have the updated paperwork? ATI did not respond to my request for comment.
Sister group also has transparency issues
The questions about the American Tradition Institute's tax status and its violation of IRS disclosure regulations come amid scrutiny over its 501(c)(4) sister group, the American Tradition Partnership. ATP has been deeply involved in Montana state politics -- and in an effort to rewrite campaign finance laws in that state in the wake of the U.S. Supreme Court's Citizens United decision loosening restrictions on corporate money in politics.
Ironically for a group connected to an effort demanding greater disclosure from scientists, ATP is also challenging Montana's disclosure rules for political contributions while endeavoring to keep secret its own funding sources -- going so far as to even resist discovery proceedings in court.
A Center for Public Integrity investigation published this week by NBC News delved into ATP's activities and finances. It found they have extensive connections to national tea party groups funded by the conservative Koch brothers, the billionaire owners of the Koch Industries oil and chemical conglomerate. According to CPI:
ATP has joined tea party lobbying efforts, signing at least two letters to Congress in the last year urging an end to tax credits for renewable resource industries. The letters were signed by Koch-funded groups including Americans for Prosperity and tea party boosters FreedomWorks, Club for Growth and Art Pope's John Locke Foundation.
As I have reported, ATP's sister group, ATI, also worked with the John Locke Foundation as well as the American Legislative Exchange Council on anti-wind energy presentations across North Carolina that misrepresented the facts.
Another connection between ATI and the John Locke Foundation is Paul Chesser, a prominent figure in the climate science denial movement who went to work as ATI's director after serving as editor of Carolina Journal, a John Locke Foundation publication that promotes fringe theories about climate change. Art Pope, who founded and whose family foundation is the primary funder of JLF, is one of the national directors of Americans for Prosperity. Chesser is no longer listed among ATI's staff or fellows. He is currently a fellow at the National Legal and Policy Center, a conservative think tank where he writes about energy and environmental politics.
Interestingly, Scott Shires -- the political consultant with the criminal past who signed ATI's Form 990 on file with the IRS -- told CPI that his reputation suffered after signing ATP's official documents:
“The operatives writing these stupid ads and mailings don't want to be identified,” said Shires. “I was the screen that allowed them to hide -- plausible deniability is something a lot of these groups are interested in.”
Also this week, ProPublica and Frontline jointly reported that ATP might have misled the IRS when it applied for the 501(c)(4) tax-exempt status that shields its donors from public disclosure:
Documents obtained by ProPublica and Frontline show that Western Tradition Partnership, now known as American Tradition Partnership, said it would not attempt to sway elections when it asked the IRS to recognize it as a tax-exempt social welfare organization in late 2008.
Shortly before submitting the application, however, Western Tradition Partnership, which bills itself as a "grassroots lobbying" organization dedicated to fighting radical environmentalists, and a related political committee sent out fliers weighing in on candidates for Montana state office. The mailers blitzed districts in Montana days before the Republican primary.
Though ATP remains active, the IRS could not locate any tax returns for it after 2008, according to ProPublica and Frontline. Nonprofits that don't file returns for three consecutive years can lose their tax-exempt status.