Hey Pat, Pay Up!

IRS Denies Tax Exemption for TV Preacher Robertson's Increasingly Troubled Christian Coalition

In a major blow to the Religious Right's most influential group, the Internal Revenue Service has denied tax exemption to TV preacher Pat Robertson's Christian Coalition.

According to news media reports, the IRS made its decision because of the partisan political activities of the organization, particularly the massive national distribution of voter guides in churches during the week before elections.

Details of the federal tax agency's move remain somewhat sketchy, however. By federal law, such IRS decisions are confidential. Only Coalition leaders were in a position to comment definitively, and they had no desire to do so.

The IRS denial leaked out anyway. The story broke in the St. Petersburg Times June 10. Times correspondent Mary Jacoby reported that the tax ruling was delivered to the Coalition this spring after a 10-year review. Three ex-employees of the group confirmed the IRS action, and one former CC official said the tax agency's denial letter cited the distribution of voter guides in churches as problematic.

Christian Coalition leaders at first tried to stonewall reporting on the development.

"I'm just not commenting on any unofficial information you may have received," Coalition spokesman Mike Russell told the Times. Alan Dye, a Washington attorney who works for the Coalition, was also vague. When pressed by a Times reporter, he snapped, "I don't have to answer any of your questions."

But as news of the story spread through the national news media, Coalition leaders desperately tried to put a positive spin on the tax disaster.

In a press release issued later in the day, the Coalition said it had voluntarily withdrawn its application for 501(c)(4) tax-exempt status and instead would be reorganizing into two separate organizations, one a for-profit entity and the other a non-profit.

The press release promised the group's "boldest attempt ever undertaken" to train activists for legislative battles and become involved in "what many believe is the most important election of the century." Coalition President and founder Robertson said the group would "continue to be a force in American politics" and "remain a prominent fixture on the political landscape as the nation's number one pro-family, pro-life organization."

But both friends and foes said Robertson's bravado was an attempt to paper over what The Washington Post called a "major setback."

Former Coalition Communications Director Arne Owens told the Post the IRS action will hurt the group's reputation with its core constituency. "This will be a surprise to all the people who believed the Christian Coalition was what it said it was," said Owens, "those conservative Christians who thought it was above backroom wheeling and dealing."

Americans United for Separation of Church and State hailed the long-awaited IRS move. "It's about time," said Americans United Executive Director Barry W. Lynn. "The Christian Coalition is a hardball political machine that has been masquerading as a tax-exempt group. The IRS has finally pulled off the mask."

Lynn said the exemption denial would make the Coalition's voter guide program -- its most potent political weapon -- virtually impossible to implement.

"In light of the IRS action, pastors would have to be out of their minds to distribute these guides now," said Lynn. "The Christian Coalition's credibility is shot. That's the real impact of the IRS action."

Lynn added that he found the tax agency's decision especially gratifying because of Americans United's work on the issue. AU has repeatedly called for IRS denial of the exemption, supplying evidence that the Coalition exists primarily to do partisan political work on behalf of Republican candidates. A "social welfare organization," the tax category the Coalition sought, is not allowed to have partisan politics as its primary endeavor.

Lynn said he believes the last straw for the IRS was an audiotape AU obtained of a closed-door Robertson speech to state lieutenants in Atlanta in September 1997. Outlining strategy for the 1998 and 2000 elections, the TV preacher called on the affiliates to emulate Tammany Hall and other political machines of American history.

Taking credit for the Republican takeover of Congress in 1994, Robertson ridiculed "Ozone Al" Gore's prospects and said he didn't think "the Democrats are going to be able to take the White House unless we throw it away." He urged the group to align behind a single nominee in the GOP presidential primary to ensure that a favorable candidate takes the White House.

"That tape was the smoking gun," concluded Lynn. "Robertson sounded more like a ward boss than a religious leader. After that, the IRS had no choice but to deny the group tax exemption."

The tax ruling isn't the only bad news for the Christian Coalition. The St. Petersburg Times says the organization's active state chapters have dropped from a high of 25 to about six. A decline in donations and staff turnover also pose serious problems.

According to USA Today, an internal Coalition document outlining fund-raising plans for last year included a mailing of only 428,000 membership renewal cards, far fewer than the two million "members and supporters" the group has claimed. The newspaper said the plan anticipated direct mail returns for the year of only $9.5 million, much less than the totals for previous years.

Official IRS filings show that Coalition income dropped from $26 million in 1996 to $17 million in 1997. Newsweek reported that Robertson, a multimillionaire business executive, was forced to supply $1 million of his own money last year to shore up the Coalition's dwindling reserves. A former Coalition official told Religion News Service the group has a deficit of $2 million, a figure that "isn't shrinking."

Media sources say the Coalition will have to pay between $300,000 and $400,000 to the IRS in back taxes and interest now that its provisional exemption has been denied.

Just as damaging are the Coalition's internal staffing and morale difficulties. The organization has faced a hemorrhage of top leaders in recent months. Don Hodel, then-CC president, resigned in February after a dispute over Robertson's decision to tell his television audience that the Senate drive to convict President Bill Clinton was a lost cause.

The remark, which came after the Coalition had crusaded for the impeachment and ouster of Clinton, hurt the group's reputation as a faithful Republican team player. When Hodel recommended distancing the organization from Robertson, he was forced out.

Other key players who have left include National Field Director Dave Welch, National Operations Director Chuck Cunningham and Communications Director Owens.

On June 1 Robertson announced a major shake-up of top positions. The posts of executive director and chief operating officer were eliminated, and a series of vice president slots were created, all answering directly to Robertson.

The chief victim of the move was Randy Tate, who was demoted from executive director to senior vice president of governmental affairs. Tate is being moved from the Coalition's Chesapeake, Va., headquarters to its small lobbying office in Washington, D.C.

Coalition spokeswoman Molly Clatworthy cast the change as a way to boost the Coalition's strength in the capital. In an interview with the Virginian-Pilot, she said Robertson was disappointed that Congress had failed to address the "root issues affecting our culture" after the Columbine High School massacre. The TV preacher wanted more talk about school prayer and less about gun control.

But others saw it as one more personnel change that gives enhanced control to Robertson, who now serves as both president and chairman. "It looks like he is clearing the deck," University of Akron political science professor John Green told the Norfolk newspaper. "He's also rearranging it so he's at the center."

The move gives new power to Roberta Combs, a member of the Coalition's board of directors and former head of its South Carolina affiliate. She is moving to Virginia Beach and will serve as executive vice president for field operations, the key grassroots organizing slot.

The Hill, a weekly published on Capitol Hill, reported in June that the Coalition is "an organization that for months has been split with internal tensions that have been exhibited in cloak-and-dagger power plays both sinister and ridiculous."

The newspaper said the internal turmoil created an air of paranoia and unhappiness at the most recent Coalition state leaders' meeting last February at Robertson's Founders Inn in Virginia Beach.

Former New Hampshire affiliate President Shelly Uscinski (now a Pat Buchanan campaign worker) said, "People felt like...they were being watched, that they were being eavesdropped on, that it was not the Christian or godly feeling like we've had in the past."

Another attendee complained to the paper of "Gestapo tactics....It was the topic of conversation throughout the conference and among state leaders. The state leaders never felt so intimidated and violated."

Some told The Hill that the hard-driving new grassroots organizer Combs -- nicknamed "Hurricane Roberta" by detractors -- is largely to blame. Dissenters call her power-hungry and the cause of personnel defections.

The newspaper went on to describe an office atmosphere at the Coalition of fear and distrust. Staffers complained of unknown persons snooping through desks and eavesdropping maneuvers.

Despite all its problems, however, Robertson's political machine cannot be written off yet. The TV preacher vows to continue his electioneering through two new outfits.

According to the group's press release, one organization -- Christian Coalition International -- will operate as a traditional business corporation and will be free to endorse candidates and make financial contributions to them. It will also help organize affiliates in other countries.

The other group -- Christian Coalition of America -- will carry on the voter guide program and other "education" activities the CC has sponsored in the past. A 501(c)(4) exemption already granted by the IRS to the Coalition's Texas affiliate will be used to try to avoid taxes.

Robertson's "21 Victory" project calls for raising $21 million to spend on voter registration and mobilization in the months leading up to the 2000 elections, especially the presidential race. State directors are being hired to implement the scheme, with staffers reportedly already in place in Illinois, Louisiana, Missouri, Ohio, Pennsylvania and South Carolina and on the way in Indiana and Michigan.

Aiming to distribute millions of voter guides and congressional scorecards, Robertson claims the Coalition's restructuring won't slow the movement down. "We won't have a single hiccup in our organization," he told The Wall Street Journal. "We will be stronger than ever."

But AU's Lynn was skeptical of the new alignment. He noted that for-profit corporations are barred by federal law from contributing to candidates. In addition, he said, the IRS is unlikely to allow Robertson to simply shuffle a few papers and continue his partisan endeavors through another tax-exempt entity.

In an interview with The Los Angeles Times, Lynn observed, "This sounds to me like a shell game that you would find at a second-rate carnival. It's an effort to do damage control to the most devastating blow any government agency has dealt the Christian Coalition."

The AU executive director said the Coalition's every move will be carefully monitored and violations will be reported to tax authorities.

Meanwhile, the IRS slap hasn't kept Robertson from flaunting his partisanship. The Coalition issued a press release June 18 boasting that the TV preacher had spent a full day on Capitol Hill plotting strategy for the 2000 elections with Senate Republican leaders.

According to the press release, "Robertson discussed the need for Congress to work quickly on a positive agenda that will re-energize religious conservative voters.... Robertson offered a word of caution about the Al Gore Campaign. He noted that while Al Gore is certainly no Bill Clinton, his initial ramp up has the potential to co-opt the pro-family message. Robertson warned Congress that they must act now to reclaim the pro-family debate and rally support of those voters."

The Associated Press said Robertson urged Senate Majority Leader Trent Lott (R-Miss.), Majority Whip Don Nickles (R-Okla.) and Sen. Paul Coverdell (R-Ga.) to act on a constitutional amendment on religion, reduced taxes for married couples and a ban on so-called "partial birth" abortions. He also asked for a congressional inquiry into alleged "selective enforcement" by the IRS.

Robertson told the AP the Coalition plans to "gear up very strong" for next year's voting, which he said "could be the most crucial election of the 20th century."

"If the Christian Coalition isn't in the game, the Republicans are going to lose," Robertson said.

The religious broadcaster has repeatedly urged his followers to focus on the 2000 presidential race because control of the federal court system, including several seats on the Supreme Court, is at stake.