Nonprofit Structure Backfires on 'Our Revolution'

AP Photo/Paul Sancya, File

Senator Bernie Sanders speaks during the first day of the Democratic National Convention in Philadelphia. 

On August 24, Senator Bernie Sanders stood before a crowd of supporters gathered in a community arts space in Burlington, Vermont, to unveil the next phase of his progressive movement.

“Tonight I want to introduce you to a new, independent nonprofit organization that is called Our Revolution, which is inspired by the historic Bernie 2016 presidential campaign,” said Sanders at the event, which was livestreamed to some 300,000 supporters. The group, Sanders declared, “will be fighting at the grassroots level for changes in their local school boards, in their city councils, in their state legislatures and in their representation in Washington.”

But the enthusiastic applause that greeted Sanders in Burlington contrasted sharply with the messy controversies and bad press dogging Our Revolution even before its official launch. On the same day that Sanders introduced the group, The New York Times reported that Our Revolution had been “met by a staff revolt” in the form of eight staff resignations. The malcontents blasted Sanders’s selection of his campaign manager, Jeff Weaver, to head the new organization, and complained that Our Revolution’s structure as a nonprofit 501(c)(4) social welfare group creates organizational and ethics problems.

“We're organizers who believed in Bernie's call for a political revolution, so we weren't interested in working for an organization that's going to raise money from billionaires to spend it all on TV,” former digital organizing director Claire Sandberg told NBC News.

Even more troubling to some progressives was the suggestion by some campaign-finance watchdogs that as a sitting federal lawmaker, Sanders might have violated election laws by setting up a nonprofit organization. Campaign-finance laws subject any entity “directly or indirectly established, financed, maintained or controlled by” a federal official or candidate to strict limits on the size and source of contributions. But tax-exempt organizations operate outside those campaign-finance and disclosure rules.

“I believe it is unprecedented for a federal office holder to set up a (c)(4) to get involved in candidate elections,” says Paul S. Ryan, deputy executive director of the Campaign Legal Center. Even if Sanders has no current role in the organization, says Ryan, any Sanders-established group would have to raise money under the campaign-finance regulations.

It’s not the first time that a presidential campaign has spawned a new organization, of course. The progressive PAC Democracy for America was born of then-Vermont Governor Howard Dean’s unsuccessful presidential bid in 2004. President Barack Obama’s campaign morphed into the tax-exempt group Organizing for Action, which has struggled with limited success to build grassroots support for his administration’s policies.

But Democracy for America’s structure as a PAC, subject to contribution limits and full disclosure, ensures that its history with Dean—who has not held elective office for more than a decade in any case—does not put it at odds with election laws. The group is run not by Dean but by his brother, Jim. Democracy for America’s independence from the former Vermont Governor came into full view during the Democratic primary, when the group endorsed and helped raise $1.9 million for Sanders, even as Howard Dean came out in favor of Hillary Clinton. As for OFA, notes Ryan, that group involves itself only in issues and does nothing to engage in elections or assist candidates.

Our Revolution, by contrast, trumpets more than four dozen local, state, and federal candidates on its website, and its board chair, labor organizer Larry Cohen, told Democracy Now! that the group would be supporting “great candidates” from the school board to the federal level—though in the same interview, he maintained that “the design of this is not to run campaigns.” Cohen also pledged on the show that “there will be no contributions from billionaires, and I can guarantee that.”

Complicating the picture still further, the group has reportedly sent out email solicitations asking supporters to back certain candidates, including Democrat Tim Canova, who just lost his primary House challenge in Florida to former Democratic National Committee Chairwoman Debbie Wasserman Schultz. Wasserman Schultz stepped down from the DNC under pressure after hacked emails disclosed that she and other party officials had maneuvered against Sanders in the presidential primary, enraging his supporters. Canova’s loss fueled still further sniping that Our Revolution would have done better as a PAC than as a 501(c)(4).

“Look, every organization has some growing pains,” says Weaver, who declined to engage in a tit-for-tat with departed staff members over his leadership role. “This organization has only been around for a few weeks. I think people should stay tuned. I think they will be very pleased at how we stay true to the progressive vision we believe in, and our success in helping to transform the country.”

Weaver said that while Sanders “introduced” the organization to people, “he doesn’t control the organization, he doesn’t run it, he’s not on the board, he’s not an employee.” Our Revolution is also in the process of setting up a 501(c)(3) charity called the Sanders Institute to work on policy and education, and is looking into setting up a separate PAC as well. Weaver clarified that the existing Our Revolution nonprofit does not raise campaign money, but that any solicitations it has sent out have simply asked backers to support candidates on their own.

Asked about the initial group’s 501(c)(4) structure, Weaver noted that most of its work and salaries would be funded through small contributions, and that Our Revolution is “working on a disclosure policy so that we disclose larger contributions that we receive.”

As a presidential candidate, Sanders made the corrupting influence of big money a central theme of his campaign. But Weaver, who is also president of the Northern Virginia comic and gaming store Victory Comics, says the dangers big money poses to a presidential candidate or office holder don’t apply to an independent group such as Our Revolution, because donors can’t expect anything special in return.

“I don’t think people are trying to get discounts at my comic book store,” says Weaver. “I don’t think I have anything to offer anybody other than the work we are doing to advance our progressive vision.”

It’s ironic, though, that the reform-minded Sanders should find his favored group subject to legal and compliance scrutiny. And it comes at a time when the appearance problems created by nonprofits affiliated with federal officials, such as the Clinton Foundation, are much in the news. Weaver acknowledged that, while Sanders did not help launch Our Revolution, his wife, Jane, “was very involved in the formation of the organization.” Jane Sanders was part of what Weaver called a “formation board” but is not on the current board.

“The Sanderses have always tried to follow the letter and the spirit of the law and rules that apply to them very closely,” says Weaver. Be that as it may, Our Revolution has gotten off to a bumpy start—in part because its nonprofit structure bars any engagement with Sanders, and limits the group’s direct involvement in campaigns. A simpler, more straightforward structure—and one more in keeping with the grassroots message of Sanders’s campaign—might have been a PAC that raised only fully disclosed donations in limited amounts.

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