Dallas Woodhouse, Carolina Rising, and Campaign Misdeeds in 2014

Oh Dallas, Dallas, Dallas!

The new executive director of the North Carolina Republican Party, the ineffable Dallas Woodhouse, is now being implicated in some seriously wrong campaign shenanigans from last year, shit that should put him in deep doo-doo with the IRS.

As one of our fair state's most notorious political operatives -- past head of Koch-funded Americans for the Prosperous, for example -- Dallas Woodhouse formed a 501(c)(4) with the IRS in March 2014, a tax-exempt "social welfare" org called "Carolina Rising," which despite everything to the contrary claimed by Mr. Woodhouse on his paperwork had as its solitary goal the election of Thom Tillis to the U.S. Senate.

Carolina Rising raised just shy of $4.9 million, $4.8 million from a single individual (whose identity remains secret, under the rules of a "social welfare" org). According to an investigation by Open Secrets, "nearly all of that [$4.9 million] went out the door to a prominent political media firm in Virginia for ads mentioning Tillis, while the rest was spent on payments to an LLC started by Woodhouse only months earlier." (Hattip to Greg Flynn, who was first at reporting something fishy about Carolina Rising.)

So Woodhouse personally benefitted, but that isn't even the illegal part. The ads mentioning Tillis, and mentioning him exclusively, violates the "private benefit" rule for 501(c)(4) orgs. It's a no-no with the IRS for Carolina Rising to exist for the sole purpose of trying to elect a single candidate.

(In the 1st link above, there's a video of a very drunk Dallas Woodhouse being interviewed on camera by a reporter on Election Night in 2014. In that interview, Woodhouse blatantly brags that he spent $4.7 million to elect Thom Tillis. The remainder of the $4.9 million he raised mainly went into his own pocket.)

Citizens for Responsibility and Ethics in Washington filed complaints with the IRS accusing Carolina Rising and another 501(c)(4) group (one working exclusively for GOP presidential candidate Marco Rubio) of violating the law.

The IRS mill grinds slowly, but it grinds exceeding fine. We'll be interested to watch where this goes and how Mr. Woodhouse continues to comport himself as head of the North Carolina Republican Party.

FOOTNOTE
Judy Wilburn, a Yadkin County school teacher who was featured in one of Carolina Rising's television ads for Thom Tillis in 2014, has been charged with assaulting a handicapped student.

The Dark Money of Dallas Woodhouse

Dallas Woodhouse was selected by the NCGOP last weekend as its new executive director. He's also the founder and director of a 501(c)4 outfit which he calls Carolina Rising. Investigative researcher Greg Flynn did a little digging into that "dark money" closet, and we quote Greg at length:

A recent sliver of sunlight reveals slightly more about the dark money group Carolina Rising than previously known. The 501(c)4 organization led by Dallas Woodhouse filed its first tax return, for the 2014 tax year, on August 12th. The return shows income of $4,880,000 and expenses of $4,799,344 for the period beginning March 25, 2014 and ending December 31, 2014. The bulk of expense payments was $4,654,645 to Crossroads Media, LLC, in Alexandria VA, for TV and cable ads. The revenue came in donations from two unnamed contributors, one in the amount of $4,820,000 and another in the amount of $60,000.

The document lists 3 Raleigh based officers: Dallas Woodhouse as President and Treasurer, his father-in-law Duane Ischer as Director (listed elsewhere as Secretary), and environmental engineer Todd Brozell, another Director. No salary was paid directly to Woodhouse but $72,000 was paid to his wholly owned company Solutions NC, Inc., for management services.

Woodhouse has consistently declined to name Carolina Rising’s donors. The existence of just two donors in the IRS filing is in contrast to statements Woodhouse made to the Center for Public Integrity in November 2014 when it profiled the group’s election year spending.

“Woodhouse did say Carolina Rising is funded by multiple donors. 'we have a large, diverse donor body that we have brought into this mission of helping the Republicans tell their story in North Carolina.' “

If the statement is true, it suggests that funding passes through one or more other entities before arriving at Carolina Rising, on its way to Crossroads Media, LLC.

Siphoning off a bit for "management services." NCGOP better get ready for that same siphon hose.