A Democratic Party-aligned political advocacy group is challenging the nonprofit status of No Labels, in a complaint filed with the Virginia AG’s office alleging that the group is hiding behind its legal status to fund its political operations.
“In its attempt to run a third-party presidential ticket, No Labels is abusing its nonprofit status in Virginia, and we believe Attorney General Jason Miyares should investigate and hold them accountable,” said Tiffany Muller, the president of End Citizens United.
“No Labels is a shadowy dark money political group that is grossly exploiting Virginia laws which are designed to benefit legitimate social welfare organizations. If No Labels’ corrupt charade continues unchecked, it will set a dangerous precedent for future elections,” Muller said.
No Labels has drawn attention to itself with its public plans to run a third-party presidential ticket in the 2024 election.
The group, which is positioning itself as a centrist alternative to the Democratic and Republican parties, is registered with the IRS as a 501(c)(4) nonprofit, which under federal law would require No Labels to operate “exclusively for the promotion of social welfare” – meaning it would have to be primarily engaged in the promotion of the common good and general welfare of the people.
Per federal law, at least 50 percent of a nonprofit organization’s activities need to be dedicated to promoting social welfare; while 501(c)(4) nonprofit organizations can participate in some direct or indirect political campaign intervention, it cannot be the primary purpose.
No Labels chief strategist Ryan Clancy disputed the suggestion that the group had run afoul of campaign finance law in a statement to the AP, claiming that No Labels is not required to register as a political committee “so long as we are not actively supporting any specific candidate.”
The End Citizens United complaint counters with the allegation that No Labels has committed nearly all of its spending to date on ballot access, a clearcut political activity.
“In their 2022 financial reporting, No Labels shows $8.9 million of programmatic spending and it appears that the entirety of their spending was related to ballot access work. Ballot access work is clearly categorized as political activity as it is dedicated to defeating political candidates, not the social welfare activities that would qualify their nonprofit status,” a press statement from End Citizens United reports.
“Their spending on political activity in 2023 has almost certainly exceeded their 2022 spending as No Labels has increased ballot access efforts across the country. If No Labels’ projections for its fundraising come to fruition, that would mean to offset $70 million in political spending, the organization’s total program budget would have to exceed $140 million—a figure that strains plausibility,” the ECU release concludes.
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Chris Graham
