UPDATED A political watchdog group on Tuesday filed complaint with the Internal Revenue Service challenging the legality of a North Carolina nonprofit organization that benefited U.S. Sen. Thom Tillis in his successful run for office last year.
The organization, Carolina Rising, was run by Dallas Woodhouse, who is the current executive director of the N.C. Republican Party and previously headed the state chapter of Americans for Prosperity.
Citizens for Responsibility and Ethics in Washington said that federal tax and elections records show that Carolina Rising spent 97 percent of its money – almost $5 million – on ads that benefited Tillis. Carolina Rising is a tax-exempt “social welfare” organization that the IRS prohibits from spending more than half of its money on political activity.
Woodhouse said in an emailed statement that CREW is a “far-left organization” run by a major fundraiser for Hillary Clinton. David Brock, a Democratic operative, is currently the chairman. CREW calls itself nonpartisan.
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“While I normally don’t comment on baseless political stunts, Carolina Rising operations were always fully reviewed by by the best legal minds in the business and was 100% compliant within the law and IRS Code,” Woodhouse said. “These organizations file these worthless complaints as publicity stunts, based on what they wish the law was, not what it is.”
The Center for Public Integrity said Woodhouse told it last November that the TV ads purchased by the nonprofit group were issue ads not political ads. If so, that would not run afoul of IRS law. Issue ads don’t overtly promote or oppose candidates, but they can raise issues that benefit politicans.
The CREW report said most of the money Carolina Rising raised last year came from a single donor, who it is not required to disclose. UPDATE: A single donor could mean one person or an organization contributing on behalf of multiple people.
Woodhouse announced the formation of Carolina Rising in April 2014 as a vehicle to support free market, education and government reform policies.
CREW wants the IRS to determine whether Carolina Rising violates the law by spending more than half its revenue on political activity, and whether it was formed to help one person, which would be prohibited.
An earlier version of this story incorrectly said the CREW complaint was based on an investigation by the Center for Responsive Politics. The two groups worked independently of one another.