AFT UNREPORTED POLITICAL ACTIVITY

Photo credits Julie Hunter via Creative Commons

Landmark Uncovers Millions More AFT Expenditures

Landmark Legal Foundation’s Supplement to its September 7, 2022, Complaint provides more evidence showing how the American Federation of Teachers (AFT) fails to report and pay taxes on general treasury expenditures made for political purposes.

Landmark has conducted new research into AFT’s publicly available disclosures and identified over $3,000,000 in expenditures made during the 2018 and 2020 election cycles that are not accounted for on AFT Solidarity’s disclosure reports.

These include:

Last September, Landmark submitted a complaint to the Tax Exempt, Government Entities (TEGE) Division of the IRS alleging that the American Federation of Teachers (AFT) does not follow tax laws and regulations because it does not disclose political expenditures on its tax returns.  Landmark presented overwhelming evidence that AFT spends millions of dollars on political activities despite reporting that it does not engage in campaign related activities.

Landmark showed:
 

• During election seasons, Randi Weingarten sends as many as 80 tweets per day (and up to 550 per week) advocating for the election or defeat of candidates for public office.
• During the 2020 election cycle, AFT sponsored a bus tour that visited dozens of cities mobilizing the public to vote for political candidates. This tour featured political rallies for, among others Joe Biden and Kamala Harris.
• AFT coordinates its activities with political candidates.

Responding to these allegations, AFT stated that it “conducts its business through the appropriate accounts, including AFT Solidarity 527, and reports its activities extensively.” AFT continued, “We are fully transparent about what we spend and why.”

On their face, these and the other outlays itemized in Landmark’s Supplement appear to qualify as exempt function expenditures and thus trigger IRS reporting and taxation provisions. Yet, AFT (unlike sister unions like NEA and SEIU) reports on its tax returns that it does not engage in political activities. Big unions like AFT should not be given a pass to avoid paying their fair share of taxes.

The IRS needs to investigate.

SEPTEMBER 2022 COMPLAINT

The Tax Code and Union Political Activity

The tax code and IRS regulations set guardrails for what tax-exempt organizations can and can’t do. When a tax-exempt organization goes too far out of its lane, it might have to pay tax penalties or even lose its tax-exempt status. Unions like the AFT are allowed to engage in political activity, unlike charities and social welfare organizations. Unions can even set up their own PAC to give money to political parties and candidates. But there are still some restrictions on what unions can do under the tax code. Expenditures for political activity involve more than just cutting a check to a political campaign. For example, organizing a partisan get-out-the-vote rally on behalf of a candidate has associated costs, like printing literature, renting vehicles, and purchasing equipment and refreshments. All the direct and indirect costs to support a candidate for public office must be reported on the union or its affiliated PAC’s tax forms.

The expenses for political activity kept “in house” are considered indirect by the code and are not taxed. So, unions can set up and administer PACs, endorse candidates and organize get-out-the-vote drives and phone banks that target their own union members and families. And the associated costs with this indirect activity aren’t taxed. However, expenditures for direct costs of political activity, that is, activity directed beyond their membership to the general public, are taxable income to the organization and must be reported.

AFT’s Unreported Political Activity

We did not find any evidence that the costs associated with the AFT’s massive political efforts to elect Hillary Clinton, Joe Biden, and numerous congressional candidates were reported to the IRS. It looks like AFT drove a bus through the guardrails set up by the IRS for tax-exempt organizations. The IRS must investigate to determine whether the AFT owes taxes or put its tax-exempt status in jeopardy.

EXHIBITS

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PHOTO BY GAGE SKIDMORE VIA CREATIVE COMMONS

Between 2016 and 2020 AFT leadership, particularly Randi Weingarten, toured the country working to elect candidates who prioritize AFT’s radical agenda.  Landmark’s timeline gives the public a full picture of the extent to which AFT uses its considerable resources to engage in politics. 

Scroll below for details about the many political events sponsored by AFT!

In late 2020, AFT launched a nationwide GOTV bust tour to “Stop Trump, Elect Biden and Harris.”  Beginning on September 30, in California the tour included 24 stops where AFT leadership advocated for the election of Joe Biden and Kamala Harris to President and Vice President respectively.

Weingarten was joined on the bus tour by AFT Secretary-Treasurer Fedrick Ingram and AFT Executive Vice President Evelyn DeJesus.  According to Weingarten, during the tour AFT leadership “Well be talking to our colleagues, our friends and families, and others in our communities about the stakes in this election and about the choices.”

Key Dates/Events on 2020 Bus Tour:

Landmark tasked an experienced Certified Public Accountant (CPA), who specializes in accounting and compliance services for political campaigns and political organizations, with reviewing our AFT Complaint.  After examining AFT’s publicly available financial disclosure records, this individual concluded that, “The Federation and specifically its Chair, Ms. Weingarten are visible political advocates of many candidates and causes across the country with little or no reporting available to the public pertaining to the political activity.”  The CPA review included an examination of AFT’s financial statements, its tax returns and AFT’s FEC filings.