By Dan Eggen
Washington Post Staff Writer
Wednesday, October 13, 2010; 7:42 PM
The 2010 midterm elections are likely to set records for spending by outside interest groups - and are already setting a healthy pace for complaints with the Federal Election Commission and the Internal Revenue Service.
Another example is likely to come Thursday, with two gay rights organizations, the Human Rights Campaign and the Courage Campaign, planning to file an IRS complaint over the tax status of one of their most vocal opponents.
The groups allege that the Ruth Institute, an arm of the National Organization for Marriage, has violated rules forbidding charities to get involved in political races. NOM, which opposes legalizing same-sex marriage, denies the allegation.
The complaint, a copy of which was provided to The Washington Post, points to evidence that the president of the Ruth Institute, Jennifer Roback Morse, has actively participated in events in favor of Carly Fiorina, the Republican candidate for Senate in California.
The Ruth Institute has also actively campaigned for judicial candidates in that state's San Diego County and in Iowa, where conservative activists are leading an effort to remove three state Supreme Court judges who voted in favor of marriage rights for gays there, according to the complaint.
"The evidence that the Ruth Institute and the NOM Education Fund repeatedly stepped over the line into illegal activity is indisputable," said Joe Solmonese, the HRC's president. "Is the Ruth Institute nothing more than a front and funnel for NOM's political activities?"
NOM President Brian Brown called the allegations "laughable" and denied most of the examples cited in the complaint. He said that Morse participated in many events as a private citizen, and that attacks by the two groups have helped NOM raise more than $200,000 in a week.
The complaint is the latest in a series of disputes over the activities of various nonprofit groups, which have been particularly active in this year's elections after a spate of favorable court rulings.
On Wednesday, for example, the watchdog groups Public Citizen and Protect Our Elections filed a complaint with the FEC alleging that the pro-Republican organization Crossroads GPS is violating federal campaign finance laws by claiming to be a nonprofit group rather than a political committee. A similar complaint was filed with the IRS earlier this month against Crossroads GPS, which was founded with the help of GOP political guru Karl Rove and is one of the leading spenders this year.
Neither the FEC nor the IRS comments on specific complaints.
According to the complaint, the Ruth Institute is listed as a project of NOM's Education Fund, which is incorporated as a 501(c)3 nonprofit group, named for the portion of the tax code used for charities. Donations to such charities are tax-deductible, but the groups are prohibited from participating in political campaigns.
NOM has spent more than $200,000 in an attempt to unseat Sen. Barbara Boxer (D-Calif.), but the Ruth Institute is supposed to steer clear of those efforts.
The HRC and the Courage Campaign say the Ruth Institute has violated that prohibition in several ways. In one example, a video shows Morse at a Fiorina campaign event in San Diego, where she identified herself as the Ruth Institute president, handed out bumper stickers for the institute and urged listeners to visit the group's Web site. The complaint also cites other videos, Internet links and blog postings linking the Ruth Institute with the Fiorina campaign; many of the references have since been removed.
"They simply believe they are above the law," said Rick Jacobs, founder and chairman of the Courage Campaign.
Brown dismisses such allegations, saying NOM and its affiliates are scrupulous about abiding by the rules. He acknowledged one incident mentioned in the complaint, which he characterized as a simple mistake: NOM issued a news release about a Fiorina event that named the Ruth Institute; he said the release was retracted when the error was pointed out by the group's critics.
"We know the law, and we follow the law," Brown said. "They're trying to silence us and make it hard for us to operate."
Neither side expects the matter to be decided before the Nov. 2 elections. The IRS can take months, or years, to adjudicate such complaints.Super super PACs
One result of this year's Supreme Court decision in Citizens United v. Federal Election Commission is the rise of "super PACs," which are free to raise and spend unlimited funds as long as they don't coordinate with candidates.
Now there's a new wrinkle, according to the Sunlight Foundation: The all-corporate super PAC.
Alaskans Standing Together, a new super PAC formed to support Sen. Lisa Murkoswki (R-Alaska), has told the FEC it has raised $805,000 so far - all of it from a group of nine federal contractors known as Alaska Native Corporations. As The Washington Post has reported, billions of taxpayer dollars have gone to such contractors amid widespread allegations of abuse.
Call it the Washington Circle of Life: from taxpayer to contractor to politician . . .