IRS Violation Information
Members of the Butler County Republican Party:
Recently, our party received an anonymous tip via email. The email contained a complaint that the sender claims to have sent to the IRS regarding alleged violations of Treas. Reg. Section 1.501(c) (3)-1(c)(3)(iii), prohibiting political campaign intervention, by the Community Pregnancy Center and its executive director Candice Keller.
Given that the complaint involves one of our Republican elected officials, I felt that the appropriate course of action was to make it available to you, the members of our Central and Executive Committees.
Below you will find the complaint and supplemental materials.
Thank you for all that you do to keep our party strong.
Todd Hall
Executive Chairman, Butler County Republican Party
March 3, 2020
Internal Revenue Service
Attn: EO Classification
MC4910DAL
1100 Commerce Street
Dallas, TX 75242
RE: COMMUNITY PREGNANCY CENTER, EIN # 311149133, ELECTION VIOLATION
To Whom It May Concern:
Please accept this report detailing violations of Treas. Reg. Section 1.501(c) (3)-1(c)(3)(iii), prohibiting political campaign intervention, by the Community Pregnancy Center, 3717 Roosevelt Boulevard, Middletown, OH 45044, and its executive director, Candice Keller, 3430 Central Avenue, Middletown, OH 45044, an elected member of the Ohio House of Representatives and candidate for the Republican nomination for a seat in the Ohio Senate.
BACKGROUND
Community Pregnancy Center, EIN # 31-1149133 (“The EO”), is an Ohio nonprofit corporation which received its 501(c)3 determination from the IRS as an Exempt Organization in February 1986. It operates as a faith-based, Christian-oriented pro-life agency that actively counsels pregnant women against considering abortion, publicly advocates for the legal prohibition of abortion in the United States, provides supplies such as diapers and clothing for young children through a mothers’ pantry, and provides speakers to local schools to lecture children on abstinence-only prevention of sexually-transmitted diseases and pregnancy. In 2007, The EO hired Candice Keller (“The Candidate”) as its executive director, a position she continues to hold today. The Candidate ran for the elected position of representative for Ohio’s 53rd House district in 2016, winning the Republican primary and general election. She assumed the office on November 16, 2016, through appointment by Gov. John Kasich to complete the unexpired term of her predecessor upon his resignation. Her elected term began January 1, 2017. Her board chose to allow her to retain her full-time position as The EO’s Executive Director while serving concurrently part-time in the Legislature. She ran for re-election in 2018, again winning the Republican nomination and general election and began her second term on January 1, 2019. Instead of running for re-election to a third term, The Candidate in 2019 announced she would run for the open seat of Ohio’s 4th Senate district, and she is currently seeking the Republican nomination in the March 17, 2020, primary.
VIOLATION 1: THE LETTER AND VIDEO
On or around February 11, a conservative-leaning Facebook account under the username Precinct 5 (https://www.facebook.com/PrecinctFive) whose operator appears to support George Lang, one of The Candidate’s opponents in the Republican primary election, posted an image to Facebook of what appears to be an election campaign flyer with the heading “Can We Trust Candice Keller? No!”
The anonymous flyer claims not to come from any of her opponents’ campaigns, instead identifying itself as “Created by citizens tired of the lies. Not funded by her or her charity or anyone else.” It lists a chart with The EO’s total revenue from its eight most recent publicly-available Form 990 filings, The Candidate’s salary as executive director reported on those 990 filings, the profit or loss for the year as recorded on the financial statements reported on those 990 filings, and a calculation for what percentage of total revenue was spent on The Candidate’s salary. It titles this chart “Community Pregnancy Center (Middletown) & Candice Keller’s Take From the Pot.” Above the chart, the flyer declares “1/4 to 1/3 of all donations, went right into her pocket for more than a decade and she uses religion as a shield for it! This is wrong Candice! Say “No!” to Candice Keller!” Next to the chart, the flyer notes: “No one else on the board took money, ever, except: Keller. Money in Keller’s pocket while new families in need go without! She runs her business in the red to help herself.”
And it lists its source as https://projects.propublica.org/nonprofits/organizations/311149133, which is Propublica’s catalog of publicly-available 990 filings for The EO obtained from the IRS. On the other side of the chart, it questions: “Look at expenses Part IX, and item 7? Did other family members profit? Salary? Utilities? How much for Printing? Did they use it to run past campaigns?”
The photograph of the flyer was immediately shared by other Facebook users to several other Facebook pages and eventually was posted by a Facebook user as a comment in response to a post on the official campaign Facebook page of The Candidate’s opponent, George Lang. The Candidate’s family members responded to several of these posts on Facebook in the first few days alleging no personal benefit was received by The Candidate (although a salary is a personal benefit) and that the organization’s budget never ran in the red (although the financial statements confirm it did for six of the eight years shown). Two weeks later, The EO itself chose to respond directly.
At 11:36 p.m. February 25, The EO posted a letter to its official Facebook page https://www.facebook.com/CommunityPregnancy/ identified as having come from the Board of Directors of The EO which alleges the flyer is full of “lies” about The EO’s finances. The letter goes on to mention The Candidate by name, directly defending her from the allegations made in the campaign flyer (“We also regret that Candice Keller and her family are made to look guilty by the false information that they have financially benefited from the ministry.”)
The letter continues to mention her signature legislative accomplishment by name – she has received significant publicity locally, statewide, and even nationwide for being author of the state’s “Heartbeat bill” banning abortion after a fetal heartbeat can be detected, which passed the Legislature and was signed into law by the governor but is on hold pending legal challenge – and alleges the attacks were due to her legislative success (“Much progress has been made this year through this ministry and has also been made on the state government level through actions like the Heartbeat bill.” These successes have provoked much hatred for the ministry and our Executive Director, Candice Keller.”).
At 11:41 p.m., February 25, the same letter on the EO’s letterhead was posted to The Candidate’s official campaign Facebook page https://www.facebook.com/votecandicekeller/. The letter was also posted to the front page of The EO’s official website (www.pregnancychoice.net) and the front page of The Candidate’s official campaign website (https://www.votecandicekeller.com/).
At 8:40 a.m., February 26, The Candidate posted to her official campaign Facebook page a video which she introduced with the text “The Lang lies reach a new low” and in which she identifies herself as the executive director of The EO and never declares any disclaimer that she is instead speaking as an individual or candidate and not in her official capacity as executive director of The EO. In this video she alleges the flyer, which she refers to as a “meme,” was released by a campaign staff member of her opponent George Lang at Lang’s direction and that the Board of Directors at The EO decided to respond with a letter. She then proceeds to read the letter in its entirety before again calling the contents of the flyer “lies” and condemning her opponent for the flyer. The video was also posted to her official campaign website.
At 12:54 p.m., February 26, The Candidate’s official campaign Facebook page again posted the letter, this time with a copy of the flyer and a statement from The Candidate’s husband, Kent Keller Sr., identified as her campaign manager.
Key factors in determining whether or not a communication results in campaign intervention include:
• Whether the statement identifies one or more candidates for a given public office. In this case, instead of the letter simply noting allegations have been made of financial impropriety at The EO and then simply denying them, the letter goes further and mentions The Candidate by name twice.
• Whether the statement expresses approval or disapproval for one of more candidates’ positions and/or actions. The letter lists The Candidate’s signature legislative accomplishment, suggesting it is an achievement of The EO. While the letter does not specifically accuse The Candidate’s opponent of releasing the flyer, it strongly condemns “whoever” released it as a liar doing so “for his own benefit,” “hate-filled,” “an enemy,” and “committed to evil.” In her video, The Candidate clarifies that she believes the flyer was sent at the direction of her opponent, George Lang, and that these statements in the letter refer directly to him.
• Whether the statement is delivered close in time to the election. The letter was released more than two weeks after the flyer began circulating on Facebook. Her family members began publicly commenting on the flyer in Facebook forums immediately upon that circulation beginning, so they were aware of it almost as soon as it was released. Presumably, she would have brought it to her Board’s attention immediately, but instead of responding immediately, they waited two weeks, which put their response coming out just two weeks prior to the primary election. Alternately, they could have waited just two weeks longer and put out their statement after the primary election had taken place. The district is a “safe” Republican district, so whoever wins the Republican primary is virtually guaranteed to win the general election in November. (The most recent election for the district had the Republican win 68 percent of the vote and the Democrat 32 percent. The election prior to that did not even have a Democratic opponent, so the Republican carried 100 percent of counted votes.) The only conceivable reason for waiting two weeks to release the statement but not four weeks would be to time the release in an attempt to influence voters in the primary election on March 17 to vote for the candidate named in the letter whom it defended.
• Whether the statement makes reference to voting or an election. The statement does not make reference to the election itself, but in the video where she reads the statement, identifies herself as The EO’s director, and neglects to disclose whether she is reading the statement in any capacity other than The EO’s executive director, The Candidate does make direct reference to the election and voting.
• Whether the issue addressed in the communication has been raised as an issue distinguishing candidates for a given office. The issue addressed is a flyer that was aimed solely at The Candidate and therefore had been raised solely as an issue distinguishing her.
• Whether the communication is part of an ongoing series of communications by the organization on the same issue that are made independent of the timing of any election. It was not. The letter and video were released solely in response to the election-themed flyer.
• Whether the timing of the communication and identification of the candidate are related to a non-electoral event such as a scheduled vote on specific legislation by an officeholder who also happens to be a candidate for public office. It was not. The letter and video were released solely in response to the election-themed flyer. The letter itself on its face meets almost every factor that is taken into consideration when determining whether an action constitutes a prohibited campaign intervention, and the video meets all factors taken into consideration. This violation warrants investigation by the IRS and
revocation of The EO’s tax-exemption.
VIOLATION 2: THE PICTURE Years before The Candidate chose to run for office, she had a headshot photograph taken and began using it on all materials of The EO. The EO placed the photograph prominently on its letterhead, on its website, on its newsletters, in newspaper advertisements, on its invitations to events, everywhere. (The EO’s official website contains newsletters going back to 2011 and all feature the photograph.)
When she first ran for office in 2016, she used this same photograph belonging to The EO on all of her campaign materials including mailers, billboards, newspaper advertisements, Facebook campaign pages, campaign websites, etc. She also continued to use it on all of The EO’s materials, including solicitations and gift acknowledgments mailed to donors, newsletters mailed to their general mailing list, invitations sent to potential event attendees, and advertisements for The EO placed in newspapers, all during the election campaign. Given that The EO is located within her legislative district, the vast majority of recipients of The EO’s publications containing her photograph were voters or potential voters within her district, providing them with additional reminders of her work with
The EO bearing the same image that appeared on all of her campaign materials in the community, thus multiplying the number of times potential voters would see The Candidate’s same image beyond the Campaign materials. As she was Executive Director of The EO, she was certainly aware she was using the same image in nearly all campaign and all EO publications. As her board members all live in the community, they would be receiving the mailers from the campaign and seeing her campaign billboards throughout the district and should have easily identified they contained the same photograph as all of the materials produced by The EO and recognized the free campaign advertising The EO was providing for The Candidate as a result of use of the same picture. Therefore, this violation was willful.
She used the same image again on nearly all campaign materials produced for her 2018 reelection campaign. She also used the same image for the first materials produced in 2019 for her Senate campaign, switching by the end of the year to a different, current image instead of the photograph from a decade ago.
The photograph is still used today, however, as her official image for The EO and appears on its various publications, including as her staff photo on the organization’s official website. This violation warrants investigation by the IRS and possible revocation of The EO’s tax exemption.
VIOLATION 3: LOBBYING EXPENSES/EXCESSIVE COMPENSATION/OTHER 990 MISSTATEMENTS
Since her hire, The EO has reported on its Form 990 that The Candidate has worked 40 hours per week, even though The EO only operates approximately 20 hours per week, and since her election The Candidate has had to miss hundreds of work days to attend legislative sessions two hours away in Columbus. This gives the impression that either The EO is paying The Candidate for time spent in the Legislature, as she spends much of her energies advocating for legislation that aligns with the political desires of the organization she heads (including writing the Heartbeat Bill to ban abortion after six weeks, co-sponsoring a complete abortion ban, supporting the defunding of Planned Parenthood, and co-sponsoring a bill that would provide state tax deductions for charitable gifts to pro-life counseling centers including The EO), or they may be misstating her work hours on the 990 in order to hide how excessive her compensation is.
A 2016 survey of executive director salaries in the Butler County area showed that the usual salary for an executive director in the same organizational income range as The EO averaged $30,000-$35,000, nearly half of The Candidate’s most recently-reported salary. And since The EO is only open 20 hours a week, an Executive Director compensated fairly there should make even less than that. The only Executive Director of a similarly-sized local organization similarly identified as being excessively compensated at a similar level was the person who ran TV Middletown, which happened to be The EO’s landlord at the time and whose executive director also served on The EO’s board.
The EO indicates on its 990 that is has not taken the 501(h) election nor does it disclose any dollar amounts spent on lobbying. Prior to her election, The Candidate regularly engaged in grassroots lobbying and direct lobbying for legal restrictions on abortions but did not report her expenses for doing so. Since her election, The Candidate does not differentiate at her appearances whether she is speaking on behalf of The EO or as a state legislator when discussing political positions supported by The EO. In fact, she usually prominently states in those discussions that she is executive director of The EO, giving the impression she is advocating to the Legislature or to voters on behalf of The EO.
The EO uses family members of The Candidate for work, such as her son, Drew Keller, who serves as its webmaster and IT person. It is unclear whether he is paid a salary for his work or is compensated via barter with his advertisement that appears in The EO’s newsletter publications, but either way, he appears to be compensated for this work with something of value but the 990 does not check the box to disclose any business transactions with the family members of an officer or key employee.
These matters warrant investigation by the IRS for possible fines and excise taxes and revocation of The EO’s tax exemption. Finally, while I have no objection to your contacting me for additional information, I ask that my identity please be kept confidential because The Candidate is known in the community for undertaking extreme acts of retaliation against anyone who reports any allegations against her.
