IRS may have targeted pro-Hatch group
Washington • A political nonprofit that came to Sen. Orrin Hatch's defense in the 2012 election says it believes it was one of the conservative entities targeted by the Internal Revenue Service.
Freedom Path sprang up in January 2011 and spent more than $570,000 supporting Hatch against a tea party push to unseat him and criticizing his GOP opponents, while keeping its donors secret by organizing as a 501(c)(4) social welfare group.
The IRS has yet to rule on Freedom Path's tax-exempt application. The group's legal counsel contends the tax agency sent multiple lengthy questionnaires that were inappropriate and then violated federal law by releasing its application to the investigative website ProPublica in late 2012.
The IRS did not ask Freedom Path to disclose its donors, though the agency is alleged to have done so with other conservative groups.
Freedom Path's main strategist, Scott Bensing, declined to comment.
Hatch, as the top Republican on the Senate Finance Committee, repeatedly pressed the IRS over allegations it targeted conservative groups in 2012, an activity IRS officials had denied.
The IRS first acknowledged the activity Friday. A Hatch spokesman said Tuesday the senator was unaware that Freedom Path may have been targeted. He does not know if the IRS singled out any other politically active tax-exempt group that participated in a Utah race.
An IRS spokesman said the agency cannot comment on the status of a tax-exempt group or whether it was targeted because of privacy laws.
'Nixonian' • Hatch has called the IRS action "chilling" and "Nixonian." An inspector-general report due out this week is expected to say the agency selected nearly 100 groups for special review because their names included "tea party," "patriot" or "9/12" and others because they either criticized the government or promised to educate the public about the U.S. Constitution.
The inspector general did not contact Freedom Path.
Lois Lerner, the IRS official in Cincinnati who oversees tax-exempt groups, apologized for the activity on Friday. Lerner said the decisions were made by front-line employees and were not politically motivated. Reports since then have shown that IRS officials in Washington, D.C., were involved.
The IRS received a spike in tax-exempt applications from politically involved groups after the Supreme Court's Citizens United decision allowed corporations and unions to spend unlimited amounts on elections. Such groups spent more than $300 million on the 2012 campaign, most of which came from conservative groups.
Such social welfare organizations can spend money on politics and keep their donors secret as long as more than half the money is spent touting an issue and not a candidate.
ProPublica sought information on 67 politically active nonprofits and in the response from the IRS received nine applications from groups that had yet to be approved or denied. The IRS admitted the applications should not have been handed over.
ProPublica released redacted versions of the applications for five groups, including Freedom Path, which indicated that they would not spend money to influence an election and ended up doing just that. The other conservative groups were Americans for Responsible Leadership, Rightchange.com II, America is Not Stupid and A Better America Now.
In its application, Freedom Path said it would seek to support "nonpartisan causes that will help protect the individual rights and liberties granted by the U.S. Constitution."
Almost immediately, Freedom Path sought to bolster Hatch in Utah, where it spent more than $570,000 on television and mailers that either supported Hatch or criticized former state Sen. Dan Liljenquist, who lost to the senator in a Republican primary.
Freedom Path was the primary counterpoint to the tea-party affiliated FreedomWorks, which spent about $1 million opposing Hatch.
Connections • Freedom Path's board members and contractors had deep ties to former Sen. John Ensign, R-Nev., and Hatch, who served together during the 2008 election as the chairman and vice chairman, respectively, of the campaign-related National Republican Senatorial Committee.
The document given to ProPublica identified the group's three-person board of directors, which includes Scott Bensing and Chris Gober, who formerly worked for the NRSC and Ensign, and Mark Emerson of Highland, Utah, a former Hatch employee who ran unsuccessfully for Congress in 2000.
Freedom Path and the Hatch campaign say they acted independently of each other as required by federal law.
Freedom Path didn't release its list of donors and had no requirement to do so as it awaited the IRS ruling on its tax-exempt status. The Center for Public Integrity did uncover that the Pharmaceutical Research and Manufacturers of America, the nation's primary drug lobby, contributed $750,000 to Freedom Path, according to the group's IRS disclosure.
PhRMA has been a consistent contributor to Hatch, who is a member of the health committee and is the top Republican on the Senate Finance Committee, which oversees Medicare and Medicaid.