The 501(c)4 violated tax law in its efforts to elect James to the United States Senate in 2018
The American Democracy Legal Fund (ADLF) has filed a complaint with the Internal Revenue Service against the National Security and Opportunity Fund (NSOF), a 501(c)4 founded to support John James’ unsuccessful 2018 campaign for United States Senate in Michigan. The complaint argues that NSOF violated its tax exempt 501(c)4 status by spending far more than 50% of its resources on independent electoral expenditures.
In 2017, John James’ brother, Lorron James, founded NSOF, a dark money group dedicated to advancing his older brother’s Senate candidacy. The group’s FEC filings contain numerous irregularities that likely indicate a pattern of violations. Most importantly, the group appeared to violate its 501(c)4 status by spending all of its budget on its efforts to elect James to the Senate.
501(c)4 organizations are typically allowed to spend up to 50% of their budgets on independent electoral expenditures without naming their donors. But such a designation would not seemingly be appropriate for NSOF, whose sole purpose has been to spend money on behalf of James’s electoral campaign.
“This dark money group founded by John James’ family violated federal tax law in a scheme to elect James to the Senate,” said the ADLF’s Brad Woodhouse. “NSOF’s tax status allowed the organization to shield its donors from Michigan voters while it illegally spent all of its efforts to buy John James a Senate seat. This blatant law-breaking by John James’ family deserves a full and thorough investigation by the IRS.”
A copy of the complaint can be viewed here.