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Bruce's Benjamins 

Active Citizens Together, the anti-tax activist's local 501(c)3, ensures that campaign expenditures escape the public eye

He complains that government stashes cash and robs the taxpayer. But it would appear that Douglas Bruce is pretty good at hiding money himself.

For years now, locally based, tax-exempt, 501(c)3 nonprofit Active Citizens Together has been sending out campaign literature to locals. This year, you may have received a wordy flier explaining the abuses of city government and urging you to vote for Issue 300 on your November ballot; a recent Independent/Luce Research poll shows 300 could go either way.

Here's a little insight: The issue was written by Bruce, a local anti-taxer and author of the Taxpayer's Bill of Rights. And Bruce is founder and bookkeeper of Active Citizens Together, whose purpose, according to a 2008 tax filing, is "public education on civil rights." This, apparently, is achieved through "mailings, public contacts, [and] Web site maintenance."

In 2008, the nonprofit had reported $517,615 in revenues and, perhaps tellingly, $183,808 in expenditures on printing, publications, postage and shipping.

Where did the money come from? How much went to influence 2008 and 2009 elections?

You may never know. Reached by phone Wednesday morning, Bruce refused to comment. But what's clear: While other entities that tell you how to vote are legally required to report where they got their money and how they spent it, a 501(c)3 is not.

A 501(c)3 can advise you how to vote on ballot issues, but can't endorse a political party or a candidate. Such groups are limited in the money and time they can spend "advocating" on legislation and ballot issues, though the laws are fuzzy and complex. Generally, a 501(c)3 shouldn't spend more than around 5 percent of its budget on "advocacy," Center for Nonprofit Excellence executive director David Somers explains. Upon exceeding the limit, a group is considered to be "lobbying" and must file additional IRS forms, adhere to a new spending limit (roughly 20 percent of its budget), and report all its "lobbying" expenditures. (Active Citizens did not itemize in 2008, so it's hard to say whether it's following the rules.)

But who, exactly, is enforcing all this?

"The policing is — it's really loose," Somers says.

Apparently, there are two ways to bust a rogue outfit. The Internal Revenue Service can yank tax-exempt status of a 501(c)3 violating its limits. But IRS auditing is usually random unless a complaint is filed. And an IRS spokesperson in Denver wasn't sure where such a complaint should be filed.

Alternately, if the Colorado Secretary of State's office receives a formal complaint alleging that, say, a mailing violates campaign finance laws, it presents the evidence to an administrative law judge who decides whether the complaint is warranted and recommends remedies. In rare cases, the Colorado Attorney General may also become involved.

But neither the Secretary of State nor Attorney General's offices say they have complaints on file for Active Citizens. The IRS keeps complaints confidential.

At least one person claims to have sent a concern to the Secretary of State. Asked about Bruce's nonprofit, City Clerk Kathryn Young says she became aware of its activities in 2006, when Bruce sent out two rounds of mailers. Young says she sent two notices requesting that Active Citizens register with her office. Both notices were refused by the recipient. Young sent the refused letters, along with the mailers, to Denver in 2006, but says she never heard back.

"You talk about full disclosure," Young says. "There isn't any when it comes to Active Citizens Together."

stanley@csindy.com


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