The nonprofit event organizer TEDxPortland could face scrutiny of its tax-exempt status, after multiple people filed complaints with the Oregon Department of Justice in recent days alleging the organization violated a federal tax code prohibition against elections involvement when it featured gubernatorial candidate Betsy Johnson on Saturday.
The group’s event gave Johnson, who is running as an unaffiliated candidate in the November election, a solo platform to speak to several thousand paying attendees at the Moda Center, since neither Republican candidate Christine Drazan nor Democratic candidate Tina Kotek were invited.
“This is an egregious abuse of their nonprofit status,” one complainant from northeast Portland wrote in a complaint to the Oregon Department of Justice’s charities division. “The harm done to the election process is significant.”
TEDxPortland is the local affiliate of the national group that puts on so-called TED Talks showcasing well-known and little-known speakers with impressive experience, notable ideas or provocative positions. TED stands for technology, entertainment and design.
Saturday’s line-up of 12 speakers, publicized well in advance, included a diverse line-up of artists and experts, at least half of them people of color. Johnson was the only unannounced addition.
One woman from Oregon City complained to the Department of Justice that people who paid for tickets “unwittingly financed a political commercial for her. All attendees should be refunded.”
President David Rae and a spokesperson for the organization did not respond to a request from The Oregonian/OregonLive on Wednesday to explain what prompted them to invite Johnson to speak at the event.
Organizers introduced Johnson as a candidate for governor and Rae was highly complimentary to Johnson, commending “your character, your backbone,” The Oregonian/OregonLive reported.
A spokesperson for the Oregon Department of Justice, Kristina Edmunson, said the agency plans to refer the seven complaints to the IRS.
An IRS spokesperson declined to comment, citing a prohibition in federal law against discussing any case or communication related to a specific taxpayer.
However, the IRS states in guidance to nonprofits that they “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 … Violation of this prohibition may result in denial or revocation of tax-exempt status and the imposition of excise tax.”
Jim White, executive director of The Nonprofit Association of Oregon, said “the easy red lines that a (tax exempt charity) cannot cross are you can’t endorse or oppose a candidate for office and you can’t raise money for either them or against them.”
“Where this may cross over into this space … is you can’t also provide in-kind space for electioneering,” White said. “Where a 501(c)(3) organization would need to be careful is if they are viewed as having given in-kind support through their bully pulpit for one candidate, even if they have not endorsed them.”
In other words, TEDxPortland effectively gave Johnson’s campaign a valuable donation of access to potential voters and the cache of being associated with a popular slate of speakers and musical acts that around 7,000 people paid to hear perform.
The exact value of the benefit that TEDxPortland conferred on Johnson’s candidacy could be difficult to calculate, but the charity might ultimately need to at least try to put a number on it in order to pursue one of the remedies allowed by the IRS. White said TEDxPortland leaders should consult with their CPA, but he said the IRS asks charities to inform it if they improperly supported a candidate for election. He said, given how other nonprofits have been asked to address similar missteps, TEDxPortland might be able to remedy the misstep by getting Johnson to compensate TEDxPortland for the value of the speaking time that the charity gave her.
Johnson has so far reported raising $8.6 million, far more than Democrat Tina Kotek, who has raised $2.6 million, and Republican Christine Drazan, who has raised $2.7 million.
Johnsons’ largest donor is Nike co-founder Phil Knight, who has given her campaign $1.75 million, according to state campaign finance records. Nike was among the major financial supporters of TEDxPortland’s event on Saturday, although the company’s donations to political candidates in Oregon do not tend to mirror Knight’s political spending, which is heavily focused on Republican candidates for governor. Nike’s most significant political spending in recent years was to defeat a Portland area transportation tax measure; the company has supported Democratic and Republican legislative candidates.
One of the primary beneficiaries of charitable giving by Phil and Penny Knight has been the University of Oregon. UO was the lead sponsor of Saturday’s event.
— Hillary Borrud; hborrud@oregonian.com; @hborrud
