Why Were Tax Exempt Dollars Used to Try to Halt the Palin Investigation?

By Lee Russ

Thursday, October 09, 2008 at 08:34 PM

You don't have to be a lawyer to have an intuitive feel for what "charitable" means. And I'll bet that most people's intuition would say there's nothing "charitable" about trying to stop the Alaskan legislature's investigation into whether Sarah Palin abused her authority in what has become popularly known as "Troopergate" when she fired that state's top law enforcement official, Walt Monegan.

Yet charitable that seemingly partisan effort must be, since the primary legal effort to stop the investigation seems to be coming from none other than the Plano, Texas based Liberty Legal Institute (LLI). The story of the Alaskan Supreme Court's decision not to halt the investigation notes that "The state Supreme Court rejected an appeal by Texas-based Liberty Legal Institute and Anchorage attorney Kevin Clarkson, who filed the lawsuit on behalf of the Alaska Republican state legislators opposed to their colleagues' investigation. "

LLI is a 501(c)(3) organization, which describes itself this way:

Liberty Legal Institute (LLI) is a 501(c)(3) organization that was founded in 1997 to protect religious freedoms and First Amendment rights for individuals, groups and churches. LLI offers its assistance pro bono to ensure all individuals and groups can thrive without the fear of governments restricting their freedoms. Liberty Legal consists of staff attorneys and a network of over 120 dedicated litigators committed to successfully battling in the courts for:

Religious freedoms

Student's rights

Parental rights

The definition of family

These litigators donate their professional expertise and time to fight for these sacred freedoms. Liberty Legal Institute is headquartered in Plano, Texas with affiliate offices located in Dallas, Houston, Austin, Fort Worth, Midland and Lubbock.

For some reason, I don't see how the Palin investigation fits into that description. Unless LLI was claiming that the investigation somehow infringed Palin's religious freedom (can freedom to "do whatever I feel like doing" be religious?), or her parental rights (claiming the governor is the de facto "parent" of all state employees?), or altered the definition of "family." Which, of course, is not what LLI claimed in their suit to stop the investigation.

No, according to LLI and the Republican state legislators who wanted to halt the investigation--that was ordered on a bipartisan basis by the rest of the Alaskan legislature--their claim is that "Partisan Politics Have Destroyed Appearance of Impartiality and Violate Due Process" rendering the investigation illegal.

So that fits into LLI's avowed purpose how? Well, apparently LLI recognized the problem, because their press release announcing the suit (the preceding link) offers a little different formulation of the group's purposes: "Liberty Legal Institute is a legal organization committed to protecting First Amendment rights and preventing government abuse of power......"

Now that seems to me to open up a hell of a can of worms. Just about any fool with a law degree can find a way to frame a political dispute in terms of government power. Can LLI use this broad definition of it's "charitable" purpose, for example, to sue to prevent people from voting in a specific state, as long as they phrase the suit in terms of protecting the voting rights of others under the constitution? Can they do that and also manage to only challenge voters likely to favor Obama? After all, LLI isn't exactly known for protecting the rights of liberals or any group other than religious people and/or conservatives (the principal of LLI once served the group that handled Paula Jones's case against Clinton).

I'm far from a legal expert, but I do have legal training, and it seems to me that the IRS just might have pretty good grounds for challenging LLI's tax exempt status. Here's the IRS summary of 501(c)(3) organizations:

To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.

The IRS summary of the term "exempt purposes" is:

The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals. The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency.

Okay, I guess the LLI lawyers got together and brainstormed that they could meet the "defending human and civil rights secured by law" element if they phrased their suit as they did. But give me a break, the IRS still says that you can't be a 501(c)(3) and "participate in any campaign activity for or against political candidates." Funny that LLI didn't get involved until after Palin was selected as the VP candidate. Makes you wonder: might there have been some communication between people connected to the McCain campaign and LLI? Between people connected to the Republican Party and LLI?

It seems to me that if LLI's actions here were legit that the ACLU could legitimately have handled the case as attorney for the Alaskan legislature and opposed the suit by LLI. If so, where the hell would this stop, and why would we want to allow tax exempt groups to dive head first into political wrangles?

What do you think? Did LLI act contrary to the limitations on being a 501(c)(3)? If not, does the IRS need to reformulate its rules, so that tax exempt dollars aren't put to such obvious political purposes?