By George Fallar 
June 10, 2012
After the unexpected popularity of my little opinion piece yesterday, I feel compelled to do a brief followup. Yes, I have two interesting web based design and programming projects that I SHOULD be working on, assuming I wish to continue feeding the dogs and the kids. But, the responses I received from the Goldwater Twitter account person as soon as I hit the desk this morning redlined my indignance meter again.
10:20 AM
“@gfallar You might recall during the Hulsizer deal we made actual calls & sent mailers. All fully legal & posted on our website at the time.”
“@gfallar Thanks for the blog post, but there was no grand conspiracy. If we had wanted to make calls, we would have.”
11:10 AM
“@gfallar We are a 501 (c) 3 & have registered lobbyists in our organization, in full accordance w/ 501 (h).”
“@gfallar They aren’t our sister org, and there are no laws preventing us from making calls. We just didn’t make these calls.”
This tells me that Goldwater has filed their 501(h) documentation. What is 501(h)? It’s an interesting loophole added to the 501(c)(3) regulations that allows organizations that DO NOT PAY TAXES to lobby legally and still maintain their tax exempt status. Goldwater has, among the bevy of lawyers, registered lobbyists on their payroll. Depending on their (Goldwater’s) income, they can legally spend a TON of money on lobbying activities and not run afoul of the tax man. Seems unfair to us normal business owners who are compelled to support these organizations with our hard-earned tax dollars, but that’s one of the prices of freedom. The most interesting thing about the 501(h) election is that a 501(c)(3) can fill out the form and have the 501(h) election effective RETROACTIVELY for the current tax year, leaving absolutely no penalty for certain lobbying activities as long as you catch it soon enough.
I feel a sense of arrogance is present at the Goldwater Institute. It’s understandable, really, they have had a great deal of success in court pursuing their viewpoint and the viewpoint of their apparently well-heeled donors. One measure of arrogance is contained in their statements that Glendale will be “on the hook” for $425M over the next 30 years. There was a good deal of confusion with that amount, considering the payment to the Jamison group for arena management averages about 15 million a year. It turns out that their new math (perhaps using the “lattice method”) NOW includes $100M for parking that they insisted not too long ago during the cupcake (Hulsizer) summit was worth nowhere NEAR that much.
Let’s assume that Goldwater files another motion tomorrow (Monday) morning, asking the judge to set aside the Friday vote of the Glendale City Council. Let’s assume they win this time. That will force the CoG to have another vote on the same matter in the near future. Does anybody really think that the current vote will change? I don’t. But, what if, this time, Goldwater sponsors RoboCalls and really puts on a grass roots (that is a KEY term, by the way) lobbying effort to force the citizens of Glendale into a frenzy? It could work, right? Or, what if somehow the delay is just long enough to get past the NHL deadline for a sale? The tale will be told when we find out how many times Goldwater asks the judge to delay the new vote. I predict it would put the vote past June 24th.
Make no mistake about it, Goldwater is aware of the regulations and they feel that they are operating completely within the letter of the IRS regulations. They have added to their advantage by representing themselves as an “educational” group. These groups are given even more leeway by the IRS as to what tools and techniques can be considered educational for the masses, thus allowing even more lobbying activity.
The second tweet to me from @Goldwaterinst exemplifies their confidence in their shielding from the long arm of the IRS getting into their donations. The “actual calls” and “mailings” they referred to went, to the best of my knowledge, solely to their own members. This is strictly legit and I don’t imagine that anyone would object to that process. The RoboCalls in question this time, however, were made apparently using a voter registration list and the people being contacted probably had no elective contact with Goldwater. That’s a huge difference, and is undoubtedly the reason that Goldwater did not want their name on the calls. The question I have is how much contact did Goldwater people have with the The Arizona Free Enterprise Club (AFEC) and how much (if any) is TOO much before the action becomes lobbying activity that is specifically obviated by the IRS regs even if the coporation in question has made the 501(h) election and filed their form.
It’s not even illegal for a 501(c)(3) to set up a 501(c)(4) corporation, or enlist an existing one, to do their lobbying wet work. So, in this case it’s entirely possible that, even though Goldwater and AFEC are so obviously tightly connected, it’s not an illegal conspiracy in any fashion. It would require a good deal more digging that I have the time or resources for to determine whether the lines had been crossed (yes, there are VERY specific requirements). Reading annual reports and filings is not an enjoyable pasttime.
When we looked to see the current filing for AFEC on the Arizona Corporation Commision’s site, we discovered they have not made necessary filings and are now not a corporation in good standing in the State of Arizona. You would expect an organization such as that to be more diligent in not being a scofflaw, wouldn’t you? Considering that Goldwater has even sued the Arizona Corporation Commission in the past, I’d certainly want to be much more careful with my filings.
Regardless of the amounts of money spent by Goldwater in their lobbying activities, the real problem with this particular group is that any sentient being would look at the founders of their organization, their current and prior board members and see an obvious conflict of interest that would explain their laser focus on the Coyotes and ANY deal to be made in Glendale.
Jerry Moyes was a listed board member in 2000, I’m sure that further investigation would add him to more years of board membership and possibly even founding membership. The history of the Coyotes and Jerry Moyes ended badly, and there is undoubtedly a great deal of enmity between Mr. Moyes and the NHL, perhaps even with Glendale city council members. Moyes’ lawyers (Jerry will say he knew nothing about it of course), leaked documents intended to derail a the sale of the Coyotes to Jerry Reinsdorf. Descpicable and certainly not honorable behavior in anybody’s book.
Because of the influence of Moyes and Kendrick on the Goldwater Institute, they should have never done anything beyond recusing themselves from any participation in any matter to deal with the Coyotes, no matter how egregious they consider it. That would have been the civilized thing to do. Instead, they choose to threaten and sue repeatedly, continuing even tomorrow morning no doubt. There was very little ‘veiling’ in the threat made by the well hydrated assistant to Clint Bolick, Carrie Ann Sitren, during her time at the podium in the CoG meeting on Friday, June 8.
I well understand the “old boy’s club” thing, most of us do. This is a great example of same, deep pockets and false indignance raise a lot of donations. We feel certain that, because of their involvment in the Coyotes fiasco, Goldwater has increased their donations from Canada immensely. The citizens of the US had the pleasure of paying for an extended bankruptcy proceeding because of Jerry Moyes. The citizens of Glendale have seen a “watchdog group” write a letter in a successful attempt at poisoning a bond issuance for their town. Two countries are watching this mess, and nobody comes out looking good. Goldwater has been seen in some coreners as taking the high road, I personally disagree.
It’s time to let it go and move on to something that might even be constructive and stop spending my tax dollars without asking me.
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