Monday, March 28, 2011

Is Media Matters breaking the law in its 'war' on Fox News?

Media Matters, the George Soros-backed legion of liberal agit-prop shock troops based in the nation's capital, has declared war on Fox News, and in the process quite possibly stepped across the line of legality.

David Brock, MM's founder, was quoted Saturday by Politico promising that his organization is mounting "guerrila warfare and sabotage" against Fox News, which he said "is not a news organization. It is the de facto leader of the GOP, and it is long past time that it is treated as such by the media, elected officials and the public."

To that end, Brock told Politico that MM will "focus on [News Corp. CEO Rupert] Murdoch and trying to disrupt his commercial interests ..." Murdoch is the founder of Fox News and a media titan with newspaper, broadcast, Internet and other media countries around the world.

There is nothing in the Politico article to suggest that Brock, who was paid just under $300,000 in 2009, according to the group's most recently available tax return, plans to ask the IRS to change his organization's tax status as a 501(C)(3) tax-exempt educational foundation.

Being a C3 puts MM in the non-profit, non-commercial sector, and it also bars the organzation from participating in partisan political activity. This new, more aggressive stance, however, appears to run directly counter to the government's requirements for maintaining a C3 tax status.

Since Brock classifies Fox News as the "leader" of the Republican Party, by his own description he is involving his organization in a partisan battle. High-priced K Street lawyers can probably find a federal judge or a sympathetic IRS bureaucrat willing to either look the other way or accept some sort of MM rationale such as that it is merely providing educational information about a partisan group.

But in the IRS application for 501(C)(3) tax-exempt educational foundation status, Section VIII, Question I asks the applicant: "Do you support or oppose candidates in political campaigns in any way?" (Emphasis added).

Under Brock's definition of Fox News, it appears he is setting MM on a course of actively opposing all Republican candidates. Brandon Kiser at The Right Sphere blog argues that this new statement of MM's mission means it must change its tax status.

Beyond the partisanship issue, explicitly declaring that your purpose as a tax-exempt non-profit public foundation is to interfere with the commercial interests of somebody else's legal business enterprise falls nowhere within the scope of purely educational activities.

The official purpose of MM, according to its 2009 tax return, is to "notify activists, journalists, pundits and the general public about instances of misinformation, providing them with the resources to rebut false claims and take direct action against offending media institutions."

At another point much later in the same return, MM's purpose is more succinctly described as being "dedicated to comprehensively monitoring, analyzing and correcting conservative misinformation in the media."

Besides Brock, who is MM's CEO, Eric Burns, who is the organization's president, received just under $260,000 in compensation in 2009.

For the complete Politico piece, go here. And for additional analysis, check out Ed Morrissey's balanced assessment here.