AFT UNREPORTED POLITICAL ACTIVITY

In September of 2022, Landmark submitted a complaint to the Tax Exempt, Government Entities (TEGE) Division of the IRS alleging that the American Federation of Teachers (AFT) does not follow tax laws and regulations because it does not disclose political expenditures on its tax returns.  Landmark presented overwhelming evidence that AFT spends millions of dollars on political activities despite reporting that it does not engage in campaign-related activities.

Landmark showed:

• During election seasons, Randi Weingarten sends as many as 80 tweets per day (and up to 550 per week) advocating for the election or defeat of candidates for public office.
• During the 2020 election cycle, AFT sponsored a bus tour that visited dozens of cities mobilizing the public to vote for political candidates. This tour featured political rallies for, among others, Joe Biden and Kamala Harris.
• AFT coordinates its activities with political candidates.

Responding to Landmark’s allegations, AFT said that it conducts all its political activities through its PAC – called AFT Solidarity.  In other words, AFT doubled down on its assertion that not one dollar of general treasury dues went to political activities.  But, according to AFT’s public records, the union appeared to be not telling the whole truth.

Additional research into AFT’s public tax disclosure reports showed over $3,000,000 in political expenditures made during the 2018 and 2020 election cycles that are not accounted for on AFT Solidarity’s disclosure reports.  This included contributions to political action committees, public relations firms who work to advance progressive candidates, and event management companies that specialize in organizing and supporting political rallies.  It appeared that the money used to finance these activities arose from the dues-paying union membership – not from AFT’s political action committee.

Based on this research, Landmark submitted a supplement to its original complaint on October 18, 2023

Landmark’s September 7 2022, Complaint

Landmark’s Supplement to its Original Complaint

Background.  The Tax Code and Union Political Activity

The tax code and IRS regulations set guardrails for what tax-exempt organizations can and can’t do. When a tax-exempt organization goes too far out of its lane, it might have to pay tax penalties or even lose its tax-exempt status. Unions like the AFT are allowed to engage in political activity, unlike charities and social welfare organizations. Unions can even set up their own PAC to give money to political parties and candidates. But there are still some restrictions on what unions can do under the tax code. Expenditures for political activity involve more than just cutting a check to a political campaign. For example, organizing a partisan get-out-the-vote rally on behalf of a candidate has associated costs, like printing literature, renting vehicles, and purchasing equipment and refreshments. All the direct and indirect costs to support a candidate for public office must be reported on the union or its affiliated PAC’s tax forms.

The expenses for political activity kept “in house” are considered indirect by the code and are not taxed. So, unions can set up and administer PACs, endorse candidates and organize get-out-the-vote drives and phone banks that target their own union members and families. And the associated costs with this indirect activity aren’t taxed. However, expenditures for direct costs of political activity, that is, activity directed beyond their membership to the general public, are taxable income to the organization and must be reported.

Deeper Dive:

AFT’s Unreported Political Activity

We did not find any evidence that the costs associated with the AFT’s massive political efforts to elect Hillary Clinton, Joe Biden, and numerous congressional candidates were reported to the IRS. It looks like AFT drove a bus through the guardrails set up by the IRS for tax-exempt organizations. The IRS must investigate to determine whether the AFT owes taxes or puts its tax-exempt status in jeopardy.

SEPTEMBER 2022 COMPLAINT

In the 2016, 2018, and 2020 election cycles, leaders of the American Federation of Teachers launched significant efforts to elect candidates for public office. They toured the country to give political speeches, attend campaign rallies with candidates, and knock on doors and call voters to “get out the vote.” The ability to engage in political speech and debate is a cherished and fundamental right in the United States. But you still have to play by the rules. And for reasons we explain in our Complaint, it appears that the AFT did not follow the rules- specifically, the rules regulating political activity by tax-exempt organizations in the Internal Revenue Code.

Click on images to expand

In late 2020, AFT launched a nationwide GOTV bust tour to “Stop Trump, Elect Biden and Harris.”  Beginning on September 30, in California the tour included 24 stops where AFT leadership advocated for the election of Joe Biden and Kamala Harris to President and Vice President respectively.

Weingarten was joined on the bus tour by AFT Secretary-Treasurer Fedrick Ingram and AFT Executive Vice President Evelyn DeJesus.  According to Weingarten, during the tour AFT leadership “Well be talking to our colleagues, our friends and families, and others in our communities about the stakes in this election and about the choices.”

Key Dates/Events on 2020 Bus Tour:

Landmark Uncovers Millions More AFT Expenditures

Landmark Legal Foundation’s Supplement to its September 7, 2022, Complaint provides more evidence showing how the American Federation of Teachers (AFT) fails to report and pay taxes on general treasury expenditures made for political purposes.

Landmark has conducted new research into AFT’s publicly available disclosures and identified over $3,000,000 in expenditures made during the 2018 and 2020 election cycles that are not accounted for on AFT Solidarity’s disclosure reports.

These include:

$500,000 to House Majority PAC in 2018 for “Advocacy.”

 $253,181 in 2018 to Resonance Campaigns for “Advocacy”

Resonance describes itself as a “communications firm with a mission to advance progressive candidates and policies.”

Over $500,000 in 2020 in outlays to an event management company that specializes in local, state, and national campaigns.

Over $350,000 in 2020 on printed election materials