Leaked documents show that the Chicago-based Heartland Institute is planning to spend $612,000 supporting Wisconsin Governor Scott Walker and four GOP Senators in their probable recall elections. It is the second nonprofit group known to be active in the Wisconsin recalls, and comes as secretly-funded nonprofits are playing an increasingly important role in elections across the country.
The think tank, which is a member of the American Legislative Exchange Council and is funded by the Bradley Foundation and other right-wing foundations, named their pro-Walker campaign "Operation Angry Badger," according to Heartland documents leaked to DeSmogBlog and posted online.
In the documents, Heartland wrote: "The recall elections of 2012 amount to a referenda on collective bargaining reform at the state level, making them of national interest. Successful recalls would be a major setback to the national effort to rein in public-sector compensation and union power."
As a 501(c)(3) "charity," the Heartland Institute is prohibited from direct involvement in any candidate's political campaign, although they are permitted to participate in some political education.
In recent weeks, another 501(c)(3) charity, the Koch-funded Americans for Prosperity Foundation, has been running TV ads touting the results of the governor's anti-union and pro-austerity policies. Those ads don't actually mention Walker by name, but are consistent with Walker's own strategy in the runup to the recall election. The messages push the envelope on the 501(c)(3) ban on intervention in political campaigns, but because IRS rules are unclear, the ads may or may not violate it.
Corporate or individual donations to 501(c)(3)s like the Heartland Institute and AFP Foundation are tax-deductible and can be written-off as "charitable" deductions.
Heartland Campaign Proposals
The leaked documents propose a $612,000 campaign to include print ads, mailers, web ads, and blog posts that would promote the "successes" of Wisconsin Act 10 and portray Wisconsin teachers as overpaid and schools as underperforming. Act 10 -- also known as the "budget repair bill" -- included Governor Walker's plan to curtail collective bargaining for public employees, which its proponents said would result in cost-savings for school districts and make it easier to fire bad teachers.
One document describes five projects Heartland anticipated for Wisconsin:
- "Recruit and promote superintendents who support Act 10."
- "Explain the benefits of Act 10."
- "Document the shortcomings of public schools in Wisconsin."
- "Expose teacher pay in key districts."
- "Create blogs that shadow small town newspaper coverage of the controversy."
A separate budget document shows the group planned to spend over $205,000 on mailers with topics like "How Good Are WI Schools?" and "Are Wisconsin's Teacher's Underpaid?" Heartland also planned to spend $60,000 to "design and place ads in 10 small newspapers reporting teacher salaries and benefits" and $31,500 to "create and launch blogs allowing volunteers and allies to post information about Act 10 that their local newspapers aren't covering."
John Johnson, a spokesman for the Wisconsin Department of Public Instruction, told the Milwaukee Journal-Sentinel that "instead of supporting 860,000 kids who go to public schools in Wisconsin, people organize money to discredit the schools. It's pretty sad."
Miles Turner, executive director of the Wisconsin Association of School District Administrators, told the newspaper that "I wish our local political situation could be left to our local state people."
Wave of Nonprofit Activity in 2012 Elections
To date, it does not appear that Heartland has run any of the proposed advertisements. However, nonprofit organizations like Heartland have been playing an increasingly important role in the 2012 campaign season. More than a third of the advertising tied to the presidential race has been funded by nonprofit groups.
Unlike Super PACs, nonprofits -- groups organized under Section 501(c) of the IRS tax code -- have no obligation to disclose to the Federal Elections Commission (FEC) the source of their funding and the amount spent on ads. Nonprofits must file annual tax returns (which are often not available until the middle of the following year), but need not report the identities of their donors, nor do they need to get into much illuminating detail about how their funds were spent.
Some of Heartland's funders were revealed by the leaked documents, which could lead to PR headaches for corporate donors that don't want to be publicly associated with right-wing causes.
Most of the non-profits operating in the 2012 election cycle are so-called "social welfare" nonprofits organized under Section 501(c)(4) of the tax code, like the Karl Rove-affiliated Crossroads GPS. 501(c)(4)s are allowed to participate in some electoral activity, but it cannot be their primary purpose. Some groups assert that this means they can spend up to 49% of their resources on political intervention.
In contrast, 501(c)(3)s like Heartland and the AFP-Foundation are prohibited from any intervention into political campaigns. Because the rules on what constitute "political intervention" are murky and specific to the facts and circumstances of each case, many 501(c)(3) groups are participating in activity that tests the limits of the ban on political activity.
The campaign proposed by Heartland, and the ads currently being run by AFP, might look like appeals to reelect Scott Walker. But these activities likely fall within the grey area, getting close to the "political intervention" line but not necessarily crossing it.
The Heartland Institute is also a member of the American Legislative Exchange Council, or ALEC, which like Heartland and AFP is organized as a 501(c)(3), but may violate that status for a different reason. In addition to the ban on intervention in political campaigns, 501(c)(3) organizations are supposed to keep lobbying -- advocating for the introduction or passage of legislation -- to a minimum. Common Cause has requested that the IRS investigate ALEC's 501(c)(3) status for participating in a significant amount of lobbying activity by promulgating corporate-sponsored model bills and providing resources to the legislators promoting those bills.
Documents Outline Anti-Global Warming Plan
The leaked documents also outline Heartland Institute's efforts to attack climate science and undermine the teaching of climate change in public schools. "Principals and teachers are heavily biased toward the alarmist perspective," one document said.
Heartland is threatening legal action against the person who obtained and released the documents. In a statement, the Institute wrote that "The stolen documents were obtained by an unknown person who fraudulently assumed the identity of a Heartland board member and persuaded a staff member here to 're-send' board materials to a new email address."
While the organization said that one document was fraudulent, it did not make that assertion about the pages outlining the "Operation Angry Badger" campaign.
Heartland is now using the leak as a fundraising tool. Donations to the think tank remain tax-deductible.