Teacher Union Denies Political Activities to IRS

Teacher Union Denies Political Activities to IRS
September 1, 2000



Despite spending millions of dollars on political activities such as "helping to elect pro-education candidates at the local, state, and national levels," the National Education Association's tax returns since 1994 have reported making no political expenditures.

The glaring discrepancy between the NEA's self-reported political passivity and the political activism detailed in its budgets is now the subject of formal complaints to the Internal Revenue Service and Federal Elections Commission filed by the Landmark Legal Foundation as part of its Quality Schools 2000 initiative.

Although the NEA has tax-exempt status as a union, it must report any expenses for "direct or indirect" political activities on its tax returns, and some of these political expenses may be subject to taxation. In its guidelines, the IRS defines a political expense as "one intended to influence the selection, nomination, election, or appointment of anyone to a federal, state, or local public office."

NEA budgets for the past several years have included line item expenditures for recruiting and electing candidates to public office offices. For example:

  • $2.5 million was spent in 1994-95 for "Government Relations program assistance" that included "candidate recruitment and recommendation."
  • $792,422 was spent in 1994-95 to assist campaign activities of the union's state affiliates, including support in 34 gubernatorial races.

When a 501(c) organization like the NEA transfers money for use as a political expense to a 527(f)(3) organization like the NEA's political action committee, IRS rules require that the 501(c) organization report that transfer as its own political expense. When the NEA transferred $400,000 to the Washington Education Association to assist in "candidate campaigns," that transfer was not reported to the IRS as a political expense. Also not reported were the ongoing expenses for the NEA's 1,800 "UniServ" directors and staff, who serve as de facto chief political operatives for the union's state and local affiliates.

In an Education Policy Institute report on this year's NEA convention, Myron Lieberman notes that on several occasions, "NEA General Counsel Robert Chanin, NEA President Robert Chase, and other officers openly admitted that the NEA does indeed spend member dues for political activities."

"When a delegate questioned whether members dues paid for the Gore buttons distributed to the almost 10,000 delegates, Chase answered, 'Yes,'" according to Lieberman. Hitherto, the NEA has denied it spent member dues for the support of specific Democratic candidates.