$500 million missing on Humane Society Of The U.S. tax returns, IRS lobbying violations, and 2013 Congressional Investigation!
The National Humane Society’s conversion into Humane Society Of The U.S. that acts like a lobbying organization, not an animal welfare group. IRS Contact Info, Case Numbers, etc.
By Frank Losey, Jan 2011 condensed from The Metro Voice, MO
Once upon a time - November 22, 1954 to be precise - three individuals prepared articles of incorporation for an organization that was originally called the “National Humane Society.” That organization later became known as the Humane Society of the U.S. (HSUS).
The original incorporators included the following language in their articles of incorporation: “no substantial part of the activities of the corporation shall consist of carrying on propaganda or otherwise attempting to influence legislation or to participate in or intervene…in any political campaign on behalf of any candidate for public office.” Fast forward fifty years to 2004 when Mr. Wayne Pacelle became President and CEO of the HSUS. The articles of incorporation were the same as they were in 1954, but the political focus of the HSUS had dramatically changed and has continued to evolve into an extraordinarily sophisticated and highly prolific lobbying organization.
In this expose of the HSUS ‘Lobbygate’ cover-up, let us peel back layers of a very deceitful and smelly ‘HSUS lobbying onion.’ Mr. Pacelle, who had served as the “Chief Lobbyist” for the HSUS before becoming its President and CEO, had already created the Humane USA Political Action Committee (PAC) - an “affiliate organization” of the HSUS.
Meet The HSUS Political Action Committee
The HSUS PAC has submitted over 2,300 pages of lobbying related documents to the Federal Election Commission! HSUS states the PAC has “channeled more than $400,000 to candidates through direct PAC contributions and through fundraising events that we hosted” (in 2008), and “gave direct contributions to 115 federal candidates who ran for election in 2008.” 2010 hasn’t been reported yet however the following Humane USA PAC statement is most revealing: “[We] will be involved in hundreds of races at the state and federal level during the primary and general elections.”
Thus, HSUS has participated in political campaigns, contrary to the explicit prohibition in its articles of incorporation! Note that Mr. Pacelle continues to serve on the Board of Directors of the Humane USA PAC, and that Mr. Michael Markarian, the HSUS Chief Operating Officer – the number two official of the HSUS - serves as the Chairperson of the Humane USA PAC, and that both Mr. Pacelle and Mr. Markarian participate in the decisions as to which political candidates receive HSUS Political PAC contributions.
Meet the Humane Society Legislative Fund (HSLF)
When Mr. Pacelle became President and CEO of the HSUS, he also created the Humane Society Legislative Fund (HSLF). He serves as Vice President and Mr. Markarian is President.
The HSLF publishes a “Scorecard,” which tracks how all 535 members of Congress voted with respect to the HSUS’ legislative agenda, and each year it hosts a Congressional reception to honor those members of Congress who have been most supportive of their agenda. The HSLF also contributed $50,000 to the 2010 YES! on Prop B ballot initiative campaign in Missouri.
Meet The Fund For Animals (FFA)
Wayne Pacelle orchestrated the merger of the Fund for Animals into the HSUS in 2004, of course he serves as its Executive Vice President – with Mr. Markarian as President. Still further, this ‘affiliated organization’ has been used to launder contributions to political campaigns, such as the $110,000 FFA contributed to the same MO YES! Prop B campaign.
Meet The Doris Day Animal League (DDAL)
Mr. Pacelle also orchestrated the merger of the Doris Day Animal League (DDAL) into the HSUS in 2006 as yet another “affiliated organization” of the HSUS. The DDAL is recognized by the IRS as a lobbying organization under the provisions of the U.S. Tax Code, and it too “launders” money. DDAL gave nearly $600,000 to the Humane Society Legislative Fund in 2008 and $80,000 to the YES! on Prop B campaign in Missouri. Mr. Pacelle serves as DDAL Executive Vice President.
HSUS Buys Missouri Ballots?
The Humane Society of Missouri (HSMO) became so involved as a ‘surrogate’ organization for the HSUS for the purpose of lobbying in support of the YES! on Prop B initiative that it is now in jeopardy of losing its tax-exempt, public charity status. The IRS has assigned a Tax Fraud Case File No. 2010-003995 for its investigation of the Humane Society of Missouri. The HSMO contributed nearly $197,000 to the YES! on Prop B Campaign.
And HSUS itself contributed over $4.1 million dollars - according to documents filed with the Missouri Ethics Commission - to the YES! on Prop B Campaign. Again, one is left to wonder why the HSUS would spend over $4.1 million dollars on a lobbying effort in Missouri, but apparently not a single penny in direct support of any animal shelter in the State of Missouri.
Under another layer of the ‘HSUS lobbying onion’ we discover Ms. Nancy Perry, the HSUS Vice President for Government Affairs, reveals in her bio that “She oversees lobbying efforts in state legislatures, including ballot measure campaigns, and Congress and directs grassroots activities nationwide. She also lobbies directly for federal animal protection legislation; and that the HSUS has lobbied in all 50 states for animal protection legislation and secured felony cruelty provisions in 41 states (including Washington, D.C.).” This conclusively establishes that Ms. Perry devotes a ‘substantial part’ of her activities to lobbying!
IRS Statute & HSUS Articles State “No Lobbying”
Mr. Pacelle’s bio states he “helped to defeat some of the strong anti-animal welfare politicians in the United States, including Rep Richard Pombo of California (2006) and Rep. Chris John of Louisiana (2004).” Not only was such action contrary to the prohibitions contained in the original articles of incorporation for the HSUS, but it was contrary to an explicit IRS prohibition that reads as follows: “Under the Internal Revenue Code, all section 501 (c) (3) organizations…are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for political office….Violation of this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.”
HSUS repeatedly boasts that it is responsible for the passage of more than 550 – that’s 550! - Federal and State statutes and ballot initiatives. This too reinforces the fact that a ‘substantial part’ of the activities of the HSUS are lobby-related.
Up until filing its 2009 Tax Return, the HSUS repeatedly included detailed comments as to its lobbying activities for the year. Comments included: “In 2008, the HSUS organized and taught ‘Lobbying 101’ workshops in more than 40 States... the HSUS assisted in sending constituent E-mails and Faxes to lawmakers through a functionality on the Society’s website... Lobbying on these issues included direct contact with legislators and their staff.”
Perhaps the most compelling evidence of a ‘cover-up’ of the magnitude of the lobbying activities of the HSUS may be derived from the fact that when the HSUS filed its 2009 Tax Return, all such references were omitted. Why the ‘omissions,’ if not a COVER-UP?!
The HSUS has sent hundreds of millions of lobby-related E-Mails each year to members, volunteers and lawmakers. The total number of lobby-related E-Mails for the last 4-5 years could very well exceed over a billion! A ‘substantial part’ of the HSUS activities.
Tens of thousands of HSUS volunteers have lobbied on behalf of the HSUS Legislative Agenda. And according to IRS Regulations, the lobbying time expended by ‘volunteers’ must be attributed to the public charity in order to determine if it has engaged in TOO MUCH LOBBYING, and has exceeded the “substantial part” threshold of the IRS.
So when the above described lobbying activities of the HSUS are added to over 100 other examples of HSUS lobbying activities that are included in over 1,400 pages of incriminating documents that have been provided to the IRS, it becomes an inescapable fact that the HSUS devotes at least 40% or more of its monetary expenditures and the time of its paid staff, members, and volunteers to direct or indirect lobbying activities.
Missing Millions On HSUS Tax Returns?
That is twice the amount of allowable lobbying activities for a tax-exempt, public charity! Consequently, one is left to wonder why the IRS has tolerated such lobbying abuses by the HSUS, especially in light of the fact that its own Regulations provide that “No organization may qualify for 501 (c) (3) status if a substantial part of its activities is attempting to influence legislation (commonly known as lobbying.... The IRS considers a variety of factors, including the time devoted by both compensated and volunteer workers and the expenditures devoted by the organization to the activity, when determining whether the lobbying activity is substantial.... Under the substantial part test, an organization that conducts excessive lobbying in any taxable year may lose its tax-exempt status, resulting in all of its income being subject to tax.”
As if the above evidence of excessive lobbying is not enough to call into question the need for the IRS to crack down on the HSUS in order to maintain the integrity of the IRS Compliance Program for tax-exempt, public charities, there is the omission of significant revenue on its Tax Returns. In this regard, it is shocking and incredulous that, even though the HSUS claims to have over 11 million Members, and its Annual Dues are $10 per year, the HSUS claimed on its Tax Returns for the last five years (2005-2009) that it received ZERO - that’s right ZERO - revenue from Membership Dues.
What happened to the missing $500 million dollars!?
So WHY hasn’t the IRS done something about the fact that the HSUS may be a TAX CHEAT, and WHY has the IRS permitted the HSUS to engage in excessive, prohibited, under-reported and non-reported lobbying activities?
Well, the IRS has assigned a Tax Fraud Case Number (29-92012) to its “on-going” investigation of the HSUS. However, its investigation has been on-going for over two years, and there does not appear to be any sense of urgency to hold the HSUS to a strict and timely standard of accountability. That is why the issue has been elevated to the Department of the Treasury’s Office of the Inspector General for Tax Administration, which has also assigned a Case File Number (55-1005-0025-C). This office has oversight over the IRS, and if this office were to receive thousands of E-Mails from concerned citizens who believe that the HSUS should be held to a strict standard of accountability, that may create the compelling ‘critical mass’ of pressure that will result in the IRS being directed to expedite the completion of its investigation of the excessive lobbying activities of the HSUS, as well as for the IRS to be directed to ask the HSUS to account for its failure to report any revenue from Membership dues - up to $500 Million!
If anyone wishes to help create the critical mass of pressure on the IRS to expedite its investigation of the HSUS by sending an E-Mail to the Treasury’s Office of the Inspector General for Tax Administration, the following is suggested for your consideration:
You can also call the OIG HOTLINE at 1-800-366-4484. The FAX Number is 202-927-7018; and the Mailing Address is Treasury Inspector General for Tax Administration, HOTLINE, P.O. Box 589, Ben Franklin Station, Washington DC 20044-0589.
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