Pro-Hillary Clinton super PAC Correct the Record accepted $250,000 in illegal contributions from a charity backed by a Boston-based construction firm already in trouble this year for its political donations.
Suffolk Cares Inc., a nonprofit charity registered under section 501(c)(3) of federal tax code, gave Correct the Record $100,000 on Sept. 8 and another $150,000 on Oct. 12, according to federal campaign finance documents. Charities of this kind are explicitly prohibited from making political contributions under federal law.
Asked about the contributions by the Center for Public Integrity, Correct the Record spokeswoman Elizabeth Shappell said the super PAC is giving the money back to Suffolk Cares Inc. today.
"When we learned this donation came from a 501(c)(3), we returned it,” Shappell said.
Suffolk Cares Inc. is funded by Suffolk Construction Company Inc. and company chairman and CEO John Fish, according to the charity’s tax return for fiscal year 2015, its most recent. Fish is a major political donor who’s personally spread hundreds of thousands of dollars among various political candidates and groups, mostly Democratic. Fish also serves as chairman and CEO of the Federal Reserve Bank of Boston, having been appointed by the Federal Reserve last year.
Dan Antonellis, a spokesman for Suffolk Construction, said the contribution to Correct the Record was an “accounting error” — he did not elaborate — and confirmed that Correct the Record has returned the money.
Suffolk Construction is one of the nation’s largest privately owned construction firms. It’s portfolio includes dozens of completed private sector and public sector projects, including facilities operated by the federal government. Since 2008, the federal government has awarded Suffolk Construction about $170 million in contracts, according to federal contracting records.
The IRS states that "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 elective public office."
The IRS continues: “Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity.”
The $250,000 Correct the Record is giving back to Suffolk Cares Inc. represents more than 8 percent of the super PAC’s income since July 1, federal campaign finance records indicate.
Launched as a stand-alone group in 2015 and based in Washington, D.C., Correct the Record is part of collection of political committees and nonprofits connected to David Brock, a one-time Clinton foe who in recent years has become one of her most loyal advocates.
Although federal law prohibits super PACs from coordinating paid messaging with the candidates they support, Correct the Record is working intimately with Clinton’s own campaign operation. For example, the Clinton campaign has paid Correct the Record nearly $300,000 for “research” work.
Recent Correct the Record videos and commentary include those entitled “Trump lies about Iraq war, insults military and praises Putin” and “Trump ‘left nothing but ruins everywhere he’s gone.’” Correct the Record operates as a rapid response attack machine, using web videos, blog items and fact-check dispatches to slam Republican presidential candidate Donald Trump at most every turn.
In April, the Center for Public Integrity reported that Suffolk Construction had contributed $200,000 to another pro-Clinton super PAC, Priorities USA Action — problematic because Suffolk Construction is a government contractor, and government contractors are prohibited from making corporate political contributions.
Priorities USA Action, which like all super PACs may raise and spend unlimited amounts of money to advocate for and against political candidates, returned Suffolk Construction’s money in July.
The Campaign Legal Center and Democracy21, nonprofit campaign finance reform advocacy organizations, nevertheless filed a complaint with the FEC in July accusing Priorities USA Action and Suffolk Construction of violating federal election laws.
Brendan Fischer, associate counsel at the Campaign Legal Center, said his organization would “certainly look at filing a complaint” with the IRS regarding Suffolk Cares Inc.’s contributions to Correct the Record.
“Correct the Record did the right thing giving the money back,” Fischer said. “But [the contribution] was against IRS rules, and this raises significant questions about a government contractor buying influence.”
Throughout Election 2016, Clinton’s presidential effort has greatly benefited from a series of federal court decisions, including the Supreme Court’s Citizens United v. Federal Election Commission decision in 2010, that have loosened rules governing campaign contributions.
All the while, Clinton has vowed to fight against the influence of big money in politics — after becoming president.
“We have to end the flood of secret, unaccountable money that is distorting our election, corrupting our political process, drowning out the voices and votes of people,” Clinton said in a speech last year.
This story is from the Center for Public Integrity, a nonprofit, nonpartisan investigative media organization in Washington, D.C. Read more of its investigations on the influence of money in politics or follow it on Twitter.