Investigative series on GOP front groups leads to IRS complaint

Three weeks after The Colorado Independent launched a series of reports detailing the shadowy group Western Skies Coalition, the watchdog group Colorado Ethics Watch has filed an IRS complaint asking for an immediate investigation into whether Western Skies, along with three other 501(c)4 nonprofits, are truly engaged in “social welfare” activities — or if their activities are actually more akin to hard core politicking.

In addition to the Western Skies Coalition, Colorado Ethics Watch is seeking an investigation into the American Future Fund, Coloradans for Economic Growth and Freedom’s Watch. By federal law, 501(c)(4) groups, which are not required to disclose the names of their donors, must spend at least 51 percent of their total resources on charitable activity.

Ethics Watch alleges that “it appears that more than half of the activities engaged in by AFF, CEG, Freedom’s Watch and WSC have been partisan, non-educational activities that provide benefit to various conservative candidates for state and federal public office in violation of statutory requirements for 501(c)(4) organizations.”

“Each of these organizations have paid considerable money to purchase television ads attacking U.S. Senate candidate Mark Udall and candidates running for the state legislature,” said Chantell Taylor, director of Colorado Ethics Watch, in a news release.

“Based on our research, it appears that the organizations are primarily engaged in political activities and need to show where, how and what they are doing to promote the welfare of the community at large. If they do not, they can and should lose their tax exempt status.”

On Sept. 5, the Colorado Independent reported on the Western Skies Coalition and its efforts to — fueled by unlimited gas and oil industry cash — boost conservative candidates running for the state Senate.

This campaign cycle, the group has been sponsoring TV ads portraying Republican state Senate candidates such as incumbent Shawn Mitchell, R-Broomfield, as renewable energy advocates despite voting records to the contrary. Western Skies-sponsored ads have also appeared to boost Republican state Senate candidate Libby Szabo, who is running against Democrat Evie Hudak in the northern Jefferson County race, targeted by both parties, to replace Democrat Sue Windels.

Further, The Colorado Independent found, the Western Skies Coalition, registered as a Virginia corporation with an office in Littleton, is allegedly being used by state Sen. Josh Penry, R-Fruita, to raise funds from oil and gas companies in a bid to target several key Colorado state Senate races and win back a Republican majority in 2010, according to several sources.

When contacted by the Colorado Independent, several oil and gas companies doing business in Colorado refused to confirm or deny their involvement in the coalition’s efforts. However, as TCI has also reported, many of them have dropped a mind-blowing $10 million into fighting Amendment 58 — a statewide initiative that would eliminate a tax credit for oil companies in Colorado that would raise more than $300 million a year for college scholarships, wildlife habitat and other programs. In that campaign, they have been required by state election laws to disclose their contributions.

In late July the Colorado Independent also reported on the activities of another group targeted by Colorado Ethics Watch this week — Coloradans for Economic Growth.

This summer Coloradans for Economic Growth launched a $670,562 negative ad blitz against Rep. Udall, the Democratic Senate candidate. The principals behind the organization include Denver-based GOP heavyweight and former legislator Cliff Dodge; Margo Branscomb, the executive director of the pro-charter and school voucher group Foundation for Academic Innovation; and Michele Austin, an operative and delegate to the Republican National Convention in Minnesota.

All three have ties to Udall’s Republican opponent, former congressman Bob Schaffer, including through his former boss, Aspect Energy CEO Alex Cranberg. Schaffer resigned as Aspect’s vice president for international business development Dec. 31, 2007, to run for the Senate.

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