Group: Unruh ignores tax law

IRS urged to end anti-abortion nonprofits' status

28 Jul 2006 // A Washington, D.C.-based watchdog group on Wednesday filed a complaint with the Internal Revenue Service claiming two Sioux Falls-based nonprofits that discourage abortion and promote sexual abstinence have violated federal tax laws.

The complaint, filed by Citizens for Responsibility and Ethics in Washington, alleges that the National Abstinence Clearinghouse and the Alpha Center - both headed by well-known abortion opponent Leslee Unruh - failed to report lobbying activities as required under the tax code.

The two "have a clear pattern of flagrantly flouting the laws that govern charitable organizations," said Melanie Sloan, executive director of CREW. "The IRS should immediately investigate these organizations and revoke their tax-exempt status."

CREW, a liberal-leaning group, is calling for the IRS to revoke the two Sioux Falls-based groups' tax-exempt status and impose fines and other penalties. According to federal tax law, public charities' lobbying efforts are limited to "no substantial part" of their work. The group claims that newspaper accounts from 2003 to the present show Unruh has lobbied legislators extensively to fund abstinence programs and to ban abortion.

A spokeswoman for the IRS was not available Wednesday to comment on the likelihood of an investigation.

The Alpha Center and National Abstinence Clearinghouse both claimed no lobbying activities on 990 tax forms for 2003 and 2004. IRS filings for 2006 are not yet available from the government.

A spokeswoman for Unruh said she was unavailable for comment Wednesday. But the Alpha Center provided a written statement in which center director Ellie Brito-Larsen denied any wrongdoing and called the allegations "false and mean-spirited."

"Those allegations have been published to serve an ideologically driven agenda, and Alpha Center has been chosen for their cross hairs precisely because Alpha Center, in its mission to protect women's rights, has supported the newly enacted laws which prohibit the exploitation of women by banning abortion," Brito-Larsen said.

The Alpha Center also violated tax law, CREW claims, by "openly endorsing" Abstinence Clearinghouse and Alpha Center board member John Stratman for a Sioux Falls School Board seat in May 2005. The Alpha Center spoke favorably of Stratman in an electronic newsletter to its supporters.

Unruh said then that the e-mail was not an endorsement of a candidate, but rather information to help voters who share similar beliefs. "You've got to be very careful with that," Unruh told the Argus Leader at the time.

According to the South Dakota Secretary of State's office, Unruh was not registered with the state as a lobbyist during 2003 and 2004 but was a registered lobbyist during the 2006 session.

In the statement, Brito-Larsen said the Alpha Center operated within IRS guidelines in regard to Unruh's registered lobbying in 2006. "The activity was not yet reported on the Center's 990 because the 2006 990 Forms are not due to be filed until the end of the year," Brito-Larsen said.

Once CREW heard about the two South Dakota organizations and conducted its own investigation, it brought the situation to the attention of the IRS, Sloan said.

"We got a tip about this one, but they're not the first organizations we've filed an IRS complaint against," said Sloan, who added that she does not know who called CREW's attention to the two South Dakota organizations.

CREW most often is involved in congressional ethics, Sloan said. CREW often is described by the Washington media as a liberal-leaning organization, and some of its members have close ties to Democratic politicians, but Sloan said it has criticized both Republican and Democratic members of Congress.

The group recently named the "13 most corrupt members of Congress," targeting legislators associated with former lobbyist Jack Abramoff.

Unruh has been one of the most recognizable faces in the state's near-total ban on abortions. But Unruh has said the Alpha Center is not a political organization, but rather a group that's concerned with a hot political topic.

Unruh largely has left the day-to-day operations with the Alpha Center and the Abstinence Clearinghouse to work on the recently organized Vote Yes For Life on Six political campaign. That group is encouraging supporters to uphold the ban when it comes before voters in November.

According to federal tax law, tax-exempt businesses avoid paying taxes on income that comes from business activities. Also, tax-exempt status means donors to such organizations can deduct donations on federal income taxes.

At the group's kickoff rally in Mitchell, at least one supporter gave two different donation checks to Unruh - a tax-deductible one for the Alpha Center's campaign to help women with unplanned pregnancies and a nontax-deductible check for the Vote Yes political campaign.

In 2004, Unruh supported a measure passed by the Legislature that would have banned almost all abortions in South Dakota. The bill died when lawmakers refused to make changes requested by Gov. Mike Rounds.

Unruh testified in favor of the 2004 abortion measure on behalf of herself, not as a registered lobbyist for the Alpha Center or National Abstinence Clearinghouse.

The complaint filed by CREW said newspaper accounts "provide compelling evidence that Ms. Unruh was lobbying in her role as the president of NAC and Alpha Center, rather than in her personal capacity.

"Because she held actual and apparent authority as president of the organizations, and was paid a significant salary by both, it is reasonable to conclude that she was being compensated by the organizations for the lobbying activity."