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Fear of IRS spooks Jewish non-profits

WASHINGTON — As an organization with a nonprofit tax status, the Orthodox Union doesn’t endorse political candidates. So a number of people were surprised to see the director of the group’s Washington office in a Web video of Israelis backing Barack Obama.

Nathan Diament, the director of the OU’s Institute for Public Affairs, was seen on screen only for a few seconds and did not speak. He hadn’t even given his permission to appear — the footage was several years old and came from an Israeli news program.

But the Orthodox Union reacted quickly, posting a statement on its Web site stating that the organization — and Diament — had not endorsed Obama.

Furthermore, the statement noted, as a tax-exempt, nonpartisan organization, the Orthodox Union never endorses candidates for public office.

“Technically we weren’t required to do anything because we didn’t do anything wrong,” said Diament, who attended law school with Obama.

But by issuing the statement, and guiding those who inquired about the video to it, the OU was able to “clear up any misconception,” he said.

The OU’s experience is just one example of how nonprofit organizations — sometimes referred to as “501(c)(3) organizations” after the section of the tax code that covers their creation — are cautiously navigating the world of partisan politics, in some cases taking extra precautions to ensure that their tax-exempt status is not threatened.

The issue gained international attention a few weeks ago when several Jewish groups decided to disinvite elected officials — most notably Sarah Palin, the Republican vice-presidential candidate — from an anti-Iran rally.

Several communal leaders involved in the decision cited warnings from one tax expert that keeping Palin on the roster could have led the Internal Revenue Service to impose a financial penalty and order a costly audit.

Several center-right and right-wing pundits and Jewish organizations dismissed such concerns as cover for a left-wing plan to deny Palin the spotlight. Yet many nonprofits — including one of the most vocal critics of those who disinvited Palin, the Zionist Organization of America — have worked especially hard this year to avoid any hint of partisanship during a hotly contested election.

Over the summer the ZOA’s national president, Morton Klein, accepted the resignation of the chair of the group’s South Florida chapter after learning that he was actively campaigning for Republican congressional candidate Allen West.

Alan Bergstein offered to step down until after the election so he could continue to work for West, who is challenging the Democratic incumbent, Ron Klein, in Florida’s 22nd district.

Klein said he was advised by his lawyer that Bergstein’s actions could cause a problem with the IRS.

Other legal experts told JTA that as long as Bergstein was not identifying himself as a ZOA leader while politicking for West, which Bergstein and Morton Klein agree he was not doing, then the organization was likely in the legal clear.

Legal issues aside, Klein said, it doesn’t make sense for his organization to identify with a particular candidate because it could alienate an opponent that could end up winning the election.

“If Ron Klein wins, I’m going to want to work with Ron Klein” on legislation in Washington, Klein said.

In some cases, concern about protecting an institution’s tax status means that leaders of nonprofit groups must be extremely careful in separating private political activities from any association with their organizations.

A recent example came last month with the formation of Rabbis for Obama.

Rabbi Steven Bob, a co-chair, said the group chose to omit the synagogue affiliations of their members and merely use hometowns to avoid any complaints or problems, even though the affiliations could have been listed with the caveat that they were “for identification purposes only.”

“We’re not doing this as rabbis of synagogues,” Bob said. “We’re doing this as private citizens” who are rabbis.

“We’re not speaking about it on the bimah, we’re not writing about it in the bulletin,” he continued, adding that he was not using any synagogue resources to work on Rabbis for Obama.

Bob listed a personal e-mail as his contact on the group’s news release and said he would only use his home phone or personal cell phone when doing work for the group.

Another member of the pro-Obama group, Rabbi Jack Moline of Agudas Achim Congregation in Alexandria, Va., also has created certain boundaries to separate himself from his congregation when it comes to his political activities.

For instance, Moline won’t use a synagogue or Jewish day school directory if he wants to invite someone from the Jewish community to a political event — he looks up the address or telephone number online or in the phone book.

Some might view it as an artificial distinction, Moline acknowledges, but he believes “it’s an important one.”

“I draw the line as clearly as I can,” he said.

Even when the line is clearly drawn, problems in public perception can arise.    ?   In July, the chairman of the American Jewish Congress, Jack Rosen, wrote a pro-Obama op-ed for the Jerusalem Post that caused somewhat of a stir since Rosen had been a backer of President Bush.

While the identification at the bottom of the article noted Rosen’s position with AJCongress, it clearly stated that the opinions “were his own.”

But according to the general counsel of the AJCongress, Marc Stern, even with the disclaimer, “people had the impression” that Rosen was speaking for the organization.

In an effort to reassure the public and head off further inquiries, Stern said, AJCongress issued a news release reiterating that the organization is nonpartisan while also defending Rosen’s right to take his own position.

While organizations are prohibited from endorsing candidates, Stern said there are “no hard and fast rules” in delineating exactly what a nonprofit can and cannot say during a campaign.

“If you have an issue and you’re engaged with that issue, even if you’re embroiled in a campaign,” it can be permissible to comment on it, Stern said.

He noted that the AJCongress denounced a Pat Buchanan book containing derogatory statements about the Jewish community that was published while the author was running for president. But Stern said his organization would not, for instance, publicly discuss which candidate’s Middle East policy it preferred.

Legal experts agree that it is difficult to delineate rules on nonprofit political activity.

“You can get down in the weeds” trying to figure out how much a clergy member can and cannot use his or her title when involved in politics, said Ken Gross, an election law expert at the Skadden Arps law firm in Washington and a former chief of enforcement at the Federal Election Commission.

“It comes down to facts and circumstances,” said Frances Hill, a law professor at the University of Miami and an expert in tax-exempt organizations and their political activities.

Hill pointed out that since the IRS only takes action against an organization once a complaint is filed, specifics are vital for determining what passes muster.

Those sometimes fuzzy rules mean that some Jewish organizations will avoid commenting on anything campaign-related as the election approaches.

Not all Jewish nonprofits this campaign season are steering clear of contentious issues.

The Jewish Policy Center, the 501(c)(3) affiliate of the Republican Jewish Coalition, has organized a series of forums in four swing states.

The events, titled “From Iran Aggression to US Recession: The Challenges Ahead,” feature panels filled with well-known conservatives and no opposing liberal voice.

Similar JPC events in 2004 drew complaints from attendees who saw the programs — in most cases hosted by synagogues — as one-sided.

The executive director of the RJC, Matt Brooks, said the discussions are about “policy” and the “critical issues at stake” in the election, but the events are “not advocating the election or defeat of any individuals” and panelists are specifically instructed not to endorse candidates.

Hill said the forums probably were acceptable, but added that even if John McCain’s name is not mentioned, it could be problematic for the organization if the content can be seen as an obvious endorsement of a particular candidate by an average attendee.

Even when Jewish organizations have no intention of being part of an election, partisan politics can still intrude.

In April, when the Jewish Federation of Greater Philadelphia held a 60th birthday celebration for Israel a few days before the Democratic primary in Pennsylvania, Gov. Ed Rendell told the federation a couple days before the event that he wanted to bring a “special guest” with him.

The morning of the event, it was confirmed that the guest was US Sen. Hillary Rodham Clinton (D-NY), who was still vying for the party’s presidential nod.
Federation officials contacted the campaign of US Sen. Barack Obama (D-Ill.), but he was campaigning in another state that evening.

In the end, Clinton welcomed the crowd and a co-chair of the event read a short greeting from Obama.

Robin Schatz, the director of government affairs for the Philadelphia federation, said the brief greeting by Clinton would not have violated the law.

“But we try our best not only to comply with the law but to make sure there is an appearance of nonpartisanship — to take that extra step beyond just following the law,” she said. “Sometimes it’s a very difficult fence to straddle.”

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