Politics and Politics
MoveOn continues their efforts to explore the depths of intellectual dishonesty with a new campaign ad calling the U. S. Chamber: "A group recently accused of tax fraud for diverting money meant for charity towards their partisan agenda."
Accused of tax fraud? Sounds serious. Was this by the Justice Department? The IRS? No, no, nothing like that. The accusation came from MoveOn ally U. S. Chamber Watch, a front group formed to attack the Chamber.
Here are the facts:
U. S. Chamber Watch was created by the SEIU and its advocacy arm, Change to Win, to further a political agenda and, more specifically, damage the U. S. Chamber by any means necessary – because we stand for everything they oppose, like free enterprise and smaller government.
In a September 10, 2010 letter to the IRS, U. S. Chamber Watch requested an audit of the National Chamber Foundation (the “Foundation”) and U. S. Chamber of Commerce ( the “Chamber”), suggesting that the Foundation violated its status as a charitable organization under section 501(c)(3) by transferring substantial unrestricted charitable resources to the Chamber.
This allegation is patently false. All Foundation and Chamber financial transactions are thoroughly reviewed by lawyers and outside accountants, who have confirmed that they comply with all relevant tax laws.
Just to be clear, here are the facts about the Starr Foundation Contribution
In 2003 the Foundation began a capital campaign to solicit endowment capital. As an endowment, the purpose was to generate investment income to help fund the Foundation’s programs for many years. The Starr Foundation contributed $15 million to the Foundation as an endowment contribution.
By law, these capital campaign contributions have to be invested at market rates to protect the principle and ensure a reliable long-term income stream to the Foundation.
To minimize market, credit and other risks, the Foundation invested the money in a Chamber debt instrument. The Foundation maintains an on-going $18 million loan to the Chamber and earns a risk-free, market rate of interest (or higher) on the loan. In fact, to date, the Foundation has greatly benefited from the arrangement and earned more than $5. 6 million in interest income -- all of which has been used to finance Foundation programs.
This arrangement, in fact, is not of great financial value to the Chamber itself. The Chamber has ample cash balances and a virtually unused $40 million line of credit with a third party bank. But put very simply -- if the Chamber is going to pay interest, it would prefer to pay it to the Foundation and not to an unrelated third party.
In short, the U. S. Chamber Watch complaint is grossly erroneous and based on an uninformed financial analysis of the Chamber’s balance sheet. And the MoveOn ad? Well, let’s stay with grossly erroneous and throw in desperate, contemptuous and insulting to voters.
The Chamber is engaging in these elections to educate voters about where candidates stand on the critical issues facing our country. Unfortunately talking about actual issues is the last thing these fringe groups want to do -- they know they lose that debate. Rest assured we will not allow these petty attacks to distract us from our fight to support candidates and policies that create jobs.