WASHINGTON – Though President Obama insists the Internal Revenue Service is not guilty of the political targeting of nonprofits, WND has learned the agency contracts with an avowedly “progressive” organization supported by George Soros to process data filed by smaller tax-exempt groups.
The federal agency process sends details contained in the annual filings for organizations with $50,000 in annual receipts or less to the Urban Institute, which is funded at least partly by government payments as well as contributions from far-left activist George Soros.
The IRS page directs groups to file with the Urban Institute, although apparently other providers also can file the Form 990 documentation, which is required of every nonprofit, small and large.
The IRS.gov page on the “Annual Electronic Filing Requirement for Small Exempt Organizations – Form 990-N (e-Postcard)” includes instructions to file online, and includes a direct link to the Urban Institute.
It’s for “most small tax-exempt organizations whose annual gross receipts are normally $50,000 or less,” since they are “required” to electronically submit Form 990-N, unless they choose an alternative Form 990 or Form 990-EZ.
“The organization that fails to file required e-Postcards … for three consecutive years will automatically lose its tax-exempt status,” the IRS warns.
There, in the “How to File” box, are instructions to use “this link” to file. The IRS explains, “When you access the system, you will leave the IRS site and file the e-Postcard with the IRS through our trusted partner, Urban Institute. The form must be completed and filed electronically. There is no paper form.”
That link leads to a page offering operations to “File your Electronic Form 990-N (e-Postcard).” You can register as a “New User” and you can “Create your Form 990-N.”
And “Submit your Form 990-N.”
The page URL is for “epostcard.form990.org,” and it carries the logo of the Urban Institute.
The supposedly “nonpartisan” organization’s employees have a record of donating nearly 100 percent of their political contributions to Democrats, and officially, the Urban Institute advocates for totally socialized medicine, carbon taxes and amnesty for illegal aliens.
And UI’s president, Sarah Rosen Wartell, is the co-founder of the Center for American Progress, widely considered ground zero for the development of many of the Obama administration’s progressive policies.
See WND Editor’ Joseph Farah’s comments on this issue in the following video:
The issue of IRS targeting of tea-party and conservative groups arose in May 2013 when the agency admitted during a news conference that groups with "tea party" or "patriots" in their names were flagged for extra IRS review.
Dozens of organizations ultimately filed lawsuits over the targeting, and members have testified about the questions they faced from the IRS, such as about the content of their prayers, whether they would promise not to protest the Planned Parenthood abortion agenda, and others.
Many of those groups still are in court over their pursuit of fair treatment.
Even as recently as Thursday, an attorney representing several of those groups, Cleta Mitchell, told a congressional hearing, "The IRS scandal is not over. It is continuing to this day. And the Department of Justice is a sham. It is a nonexistent investigation."
Mitchell, a partner in the Washington-based law firm Foley & Lardner LLP, is well-known for providing expert legal advice to conservative groups seeking tax-exempt status. She blasted Obama's claim on Sunday that there is no IRS scandal, and his insistence there was "not even a smidgen of corruption" in the agency's targeting of conservative groups applying for tax-exempt status.
"The IRS scandal is not just a bone-headed bunch of bureaucrats in some remote office, contrary to what the president of the United States told the American people," she said.
She told the House Government Reform and Oversight committee the attacks were politically motivated because the direction came from "political elites in Washington — not in Cincinnati, but Washington."
The attorney said she knew as far back as October of 2011 that the targeting was being guided by Washington, because when she contacted the Cincinnati IRS agent assigned to one of her clients and offered to try to help smooth the application process, she said she was told, "Oh, there's a task force in Washington; we can't do anything until we hear back from Washington."
During that hearing, Rep. Trey Gowdy, R-S.C., took up the questioning.
"How can the president say there's not a smidgen of criminality when Lois Lerner invoked the 5th Amendment, 41 witnesses haven't been interviewed – including the two that are here right now? How can he possibly draw that conclusion?!" Gowdy demanded.
The latest maneuver in the continuing battle is the pending proposal from the IRS to impose new rules on those nonprofits that essentially would prevent them from speaking about candidates or issues.
"This is a real assault on the First Amendment rights of American citizens, and we need to do everything we can to stop the IRS from implementing these new rules," Mitchell said.
She said the goal of the rules is "to restrict the free speech of conservatives in the United States. Progressives tend to focus on process issues, and these new IRS regulations are a direct attempt by the political left to rewrite the rules of political engagement unfairly in their favor."
The Urban Institute has advocated for socialized health care in the United States, and back in the 1980s ran a critique of the Reagan administration. It followed with critiques of George H.W. Bush.
"In 2001, UI and the Brookings Institution began collaboration on a Tax Policy Center (TPC) to discredit President George W. Bush's tax cut plans, which UI claimed disproportionately and unjustly favored 'the wealthy,'" a report from Discover the Networks said.
The institute lamented "societal obstacles" that allegedly prevented African-Americans from prospering. It argued "public insurance appears to offer the best financial protection from high out-of-pocket expenses and financial burden for low-income families." And its reports make "no distinction between legal immigrants and illegal aliens."
Even the Los Angeles Times has unabashedly labeled the Urban Institute a "leading liberal think tank."
The Urban Institute says it "gathers data, conducts research, evaluates programs, offers technical assistance overseas, and educates Americans on social and economic issues – to foster sound public policy and effective government."
It has released dozens of extensive reports advocating redistribution through taxes. The "Tax Distribution and Economic Trends" section of its website provides links to many of those reports.
The group is a proponent of the carbon tax, which has been criticized as too heavily taxing the United States while distributing those funds to the Third World.
The Urban Institute got into the tax forms with the help of the IRS, which turned over documentation from 200,000 nonprofits from the American Cancer Society to the Heritage Foundation so a database could be created.
At the time, Linda Lampkin of the Urban Institute's National Center for Charitable Statistics touted it as a way for individuals to access information about nonprofits.
A report in the Washington Post said Urban Institute officials, at one time while President Reagan was in office, accused Republicans of defunding the organization because of its leftist bias. At that point, it made connections with Ford, Mellon and other foundations for support.
It also started getting contributions from Aetna Life and Casualty, Exxon and General Dynamics. Among Ford's funded projects was a study on immigration.
And an entire page at the Urban Institute's website is dedicated to the IRS tea-party scandal, which is described as "small."
Just last year, Soros provided a $250,000 grant for "collecting data and conducting sophisticated empirical research and analysis on the impact of various proposals for housing finance reforms on low-income families, communities of color and underserved markets."
Another Urban Institute donor is the Joyce Foundation, an anti-gun group where Obama served on the board from 1994 to 2002.
Joyce gave a $400,000 grant to the controversial Media Matters progressive activist group in 2010, purportedly to "support a gun and public safety issue initiative."
While Obama was on the Joyce Foundation board, the organization granted tens of millions of dollars to gun-control organizations. Also numerous large grants were provided to a group called Leadership for Quality Education, which was run by John Ayers, the brother of Weatherman terrorist Bill Ayers.
Also while Obama was at Joyce, the foundation gave numerous grants to the Small Schools workshop at the University of Chicago, which was founded by Bill Ayers and is run by avowed communist activist Mike Klonsky, who served with Ayers in the Students for a Democratic Society.
A 2011 US News and World Report story revealed that the Urban Institute's orientation is "liberal" and of the $79,000 in political donations by employees from 2003-2010, zero percent went to Republicans or third-party candidates. Every penny donated went to a Democrat. A WND investigation of the donations and backgrounds of Urban Institute officers and trustees, found:
- Sarah Rosen Wartell, president of the Urban Institute – with compensation of $366,691 from the organization in 2012 – is co-founder of the Center for American Progress, the left-leaning Washington activist team also led by John Podesta, who now is working in the White House on Obama's executive orders. She donated $1,250 to Obama's 2008 campaign and $5,950 to Democrats since 2002. Wartell served as President Bill Clinton's special assistant for economic policy and deputy director of the National Economic Council. Podesta's group recently has suggested such changes as the involvement of labor unions in higher education. That idea includes a specific set of courses for all students to take "across a range of disciplines." His idea was to have the Department of Education go ahead with the plan without consulting Congress.
- Eric Toder, now an institute fellow at the Urban Institute and co-director of the Urban-Brookings Tax Policy Center, was previously President Bill Clinton's Treasury deputy assistant secretary for tax analysis from 1993-1996 and served as director of the IRS Office of Research from 2001 to 2004. Toder also served on the Internal Revenue Service Advisory Council and the IRS' information Reporting Advisory Committee during Obama's administration from 2007-2010. He joined the Urban Institute in 1998. Toder contributed $3,800 to Obama's 2008 presidential campaign and $1,500 to other Democrats and Democrat committees. In 2004, he gave $4,000 to John Kerry.
- Freeman Hrabowski, vice chairman of the Urban Institute board of trustees, donated $5,000 to the Obama victory fund in 2008 and $1,000 to Hillary Clinton's presidential campaign. In 2012, he donated $5,000 to Obama's victory fund. Since 2004, he has donated $21,900 – all to Democrat candidates.
- Jamie S. Gorelick, vice chairman of the Urban Institute board of trustees, served as President Bill Clinton's deputy attorney general from 1994 to 1997 and also as vice chairman of Fannie Mae from 1997 to 2003, the year Fannie Mae was accused of improper accounting after it showed $9 billion in unrecorded losses. Gorelick was paid more than $26 million as a top Fannie Mae executive before the mortgage giant received a taxpayer-funded bailout. Gorelick is also reportedly the official blamed for the pre-Sept. 11 "wall of separation" that prevented the CIA and FBI from comparing investigation notes. She was appointed by former Sen. Tom Daschle, D-S.D., to serve on the 9-11 Commission. Since 2000, Gorelick has contributed at least $257,150 to Democrat candidates and leftist organizations – including $10,000 to Obama's 2008 victory fund and $10,000 to his 2012 victory fund – and only $6,500 to Republicans. She is also a major donor to the Urban Institute.
- Joel L. Fleishman, listed as the Urban Institute's chairman of the Board of Trustees, gave $2,300 to Obama's 2008 campaign. Since 2000, he has contributed $28,209 – all to Democrat candidates.
- Robert Solow, former vice chairman of the Urban Institute board of trustees, is a Nobel-Prize winning economist who is known for counseling Democrats. Solow said he voted for Obama "with the greatest of pleasure" and donated to the president's 2008 campaign.
- Robert D. Reischauer, listed as president of the Urban Institute in 2010, was a senior fellow of economic studies at the leftist think-tank the Brookings Institution in the late '80s and '90s. While he worked for the Urban Institute, he donated $2,000 to Democrat candidates.
- Donald A. Baer, Urban Institute trustee, was a senior adviser to President Clinton from 1994-1998, including stints as director of strategic planning and communications and as chief speechwriter/director of speech writing and research. Baer has donated $4,750 to only Democrats since 2010.
- Erskine B. Bowles, Urban Institute trustee, is former co-chair of President Obama's National Commission on Fiscal Responsibility and Reform. Bowles is also a former member of the National Economic Council and National Security Council. He served as President Clinton's chief of staff from 1996 to 1998 and deputy chief of staff from 1994 to 1995. Bowles has donated more than $8,000 to only Democrats since 2010.
- Henry G. Cisneros, Urban Institute trustee, was Clinton's secretary of the Department of Housing and Urban Development from 1993-97. Cisneros has donated $7,500 to only Democrats since 2010.
- Marne L. Levine, Urban Institute trustee, is Facebook vice president of global public policy. Levine was chief of staff of Obama's National Economic Council and special assistant to the president for economic policy. From 2001 to 2003, Levine served as chief of staff for Harvard University President Larry Summers, who served as deputy secretary of the treasury in the Clinton administration. Under President Clinton, she was deputy assistant treasury secretary for banking and finance. Levine has donated $3,000 to Democrats and $5,000 specifically to Obama since 2010.
Among other Urban Institute donors are the American Express Foundation, the Energy Foundation, the Fannie Mae Foundation, the Ford Foundation and the Soros-funded Open Society Institute.
The organization also receives huge amounts of federal dollars, getting nearly $55 million "during the last few years of the Clinton administration." A 2011 filing by the organization revealed that its "government grants (contributions)" during that year totaled more than $44 million.
The Urban Institute was awarded substantial Treasury Department contracts in 2006 and 2007 when President George W. Bush was in office, totaling $2,082,685. However, both of the contracts are fairly straightforward and listed as "New Market Tax Credit Program Evaluation." The Treasury Department explains, "The New Markets Tax Credit Program (NMTC Program) was established by Congress in 2000 to spur new or increased investments into operating businesses and real estate projects located in low-income communities."
Many of the government contract databases offer very few details on Urban Institute contracts predating 2006.
In fiscal year 2014, the Treasury Department specifically awarded more than $4 million in contracts to the Urban Institute. There's no indication whether those funds were used specifically for processing 990 documentation for the IRS. Many of the services are vaguely categorized as "Program Evaluation Services," "Special Studies/Analysis - Data," "Other Professional Services" and "Operations Research and Quantitative." Further descriptions include, "data matching services" for the IRS or "modification to add scope to research project."
Current donors include the Ford and MacArthur foundations, Bill Gates' foundation, the Annie E. Casey Foundation, the Popplestone Foundation, Stoneman Family Foundation, Price Family Charitable Fund and others.
The Form 990 provides the public with financial information about the group, and it also is used by the government to keep up to date with nonprofits and prevent such organizations from abusing their tax-exempt status.
Failure to complete a form 990s for three consecutive years automatically results in the loss of tax-exempt status.
The forms can be filed by larger organizations either electronically or by filling out and mailing a complete form manually. Most nonprofits whose annual gross receipts are $50,000 or less are required to electronically submit Form 990, which is also known as the e-Postcard.
In 2007, the IRS modified its Form 990, requiring more significant disclosures on corporate governance and boards of directors.
The Urban Institute's partnership with the IRS, meanwhile, goes back to 1997, when the nonprofit was contracted to digitize and help make the data associated with Form 990s more accessible to the public.
Also in 1997, the Urban Institute contracted with Philanthropic Research, Inc., which later renamed itself GuideStar, to digitize form 990s.
This is not the first time a Democratic Party president has used the IRS to target political foes.
As WND has reported, during President Bill Clinton’s term in office, IRS audits were conducted against individuals and groups who caused problems for the administration. Several prominent conservative groups found themselves facing IRS audits following their criticism of the president and his policies. Among the conservative groups targeted for audits were the Heritage Foundation, the National Rifle Association, Concerned Women of America, Citizens Against Government Waste, National Review, American Spectator, David Horowitz's Center for the Study of Popular Culture and the Western Journalism Center.
In his 1999 column, "Clinton's IRS gestapo," WND Editor Joseph Farah wrote, "In a very real way, the IRS has been Clinton's secret police agency – the go-to guys when no other punishment will do."
A leader of a small exempt organization, who did not want his name used, told WND, "By unconstitutionally using a left-leaning 'think tank' to decide who lives or dies, Obama has turned the IRS into a conservative tar pit run by liberal policy activists. By denying 501c(4) status to conservative 501c(3) nonprofits, they are already trapped as non-political entities. Where most non-501c(4) organizations advocate for something in their area of interest, they are corralled for mass sacrifice on the altar of radical liberalism. I predict we will see mass revocations of thousands of good conservative corporate charters, most likely done all at the same time so we cannot stop them in time. This must be stopped now and a transparent, objective, non-partisan method for reviewing 990-N forms implemented immediately before the mass execution takes place."
Officials with the IRS did not respond to WND requests for comment.
And former IRS official Marcus Owens told WND the process probably is viewed by the IRS as a cost-effective way of processing data.
The Urban Institute was set up in 1968 by President Lyndon Johnson to "study" the nation's urban issues. Its members have included Cyrus Vance, Robert McNamara and William Gorham.
Additional reporting by Chelsea Schilling and Bob Unruh and research by Brenda J. Elliott.
Media interested in interviews about this story should email WND.