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Wisconsin complaint filed by liberal group accuses Club for Growth of violating IRS rules

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MADISON, Wisconsin — The Wisconsin Club for Growth, a conservative group at the center of the John Doe investigation into Gov. Scott Walker's 2012 recall campaign, should be prosecuted for violating Internal Revenue Service laws and lose its tax-exempt status, a complaint filed by the liberal Center for Media and Democracy alleges.

The Club for Growth registered with the IRS as a tax-exempt organization in 2011 and 2012 and reported it spent nothing for political purposes.

But, the Center for Media and Democracy complaint says the Club for Growth spent nearly all of the $20 million it raised to help elect Republican candidates in the Wisconsin Senate and gubernatorial recall elections. IRS rules say tax-exempt groups are allowed to be involved in political activity, as long as it's not their primary focus.

The center's complaint includes documents that were made public as part of the club's federal lawsuit against those leading an investigation of Walker's relationship with groups such as Club for Growth during the recall campaign. Prosecutors said emails released during the investigation showed Walker campaign advisers discussed how to use the Club for Growth as a hub for millions in contributions to be sent to dozens of politically-conservative groups, the State Journal (http://bit.ly/1rxlcry ) reported.

"This is the first time we have had internal communications and financial records demonstrating a tax-exempt group's explicit and extensive role in influencing elections," said Brendan Fischer, a lawyer for the group filing the complaint. "This evidence directly contradicts WiCFG's assertions to the IRS that it operated primarily to advance social welfare and engaged in zero political activity."

Andrew Grossman, a lawyer for Club for Growth, said the liberal center for "trying to silence political speech."

"If they want to waste their money on filing a frivolous complaint for a blip of news coverage, that's their business," Grossman said. "The Wisconsin Club for Growth is proud of its record of speaking out on the issues that matter to Wisconsin."

The investigation of Walker and conservative groups remains on hold because the state judge overseeing it effectively stopped it in January. The decision has been appealed to the Wisconsin Supreme Court.


Information from: Wisconsin State Journal, http://www.madison.com/wsj

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