A Monday report from the New York Times is raising new questions about whether Sidney Blumenthal, a close ally of Democratic presidential candidate Hillary Clinton, is an adviser to Clinton’s campaign at the same time he is acting as a paid consultant for the left-leaning Media Matters for America.
If the answer is “yes” to both, Blumenthal is walking a fine line that threatens to violate IRS rules that grant Media Matters tax-exempt status.
The Times reported on Monday that during her tenure as secretary of state, Clinton regularly received advice on Middle Eastern affairs from Blumenthal, a journalist and former White House aide to president Bill Clinton. In that time, Blumenthal also worked “on and off as a paid consultant to Media Matters” and as an employee for the Clintons’ nonprofit Clinton Foundation.
Asked by a reporter on Tuesday if she would continue to consult “old friends” like Blumenthal for policy advice if she becomes president, Clinton said she’s “going to keep talking to my old friends, whoever they are.”
If Blumenthal is currently functioning as an adviser to the Clinton campaign and a paid consultant for Media Matters, he would be breaking IRS rules that forbid tax-exempt organizations from engaging in overt political activity.
Media Matters, which was founded by Clinton loyalist David Brock, is classified by the IRS as a 501(c)(3), exempting the organization from having to pay federal taxes. “Under the Internal Revenue Code, all section 501(c)(3) organizations 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,” read the IRS’s rules governing such organizations.
Media Matters’ website is primarily a vehicle to publish a steady stream of rebuttals to conservative commentators and Fox News. In the lead-up to Clinton’s official campaign announcement in April, the site ran dozens of pieces defending her from critical reports in various outlets, including the New York Times.
Spokespeople for Clinton’s presidential campaign and Media Matters did not return requests for comment on whether Blumenthal is actively involved with their respective organizations. (A spokesperson for the Clinton Foundation, however, said Blumenthal is no longer employed there.)
Still, the relationship is making some suspicious. “It makes it look like Media Matters really is engaged in political activity,” said Bruce Hopkins, a Kansas-based lawyer who specializes in nonprofit and charitable organization law, referring to Blumenthal’s history with the nonprofit.
He said the issue boils down to whether Blumenthal is using financial resources provided by Media Matters to advance the Clinton campaign. “If that’s the case, then that would be a violation of the tax law.”
Alan Dye, a Washington, D.C.-based lawyer who also specializes in nonprofit law, agreed. He said it wouldn’t necessarily be in violation of IRS rules for Blumenthal to advise the Clinton campaign while also contracting with Media Matters, but said it could be a violation.
“I think you’d have to show that there was some campaign intervention,” Dye said. “That would be the biggest hook. I think Media Matters is vulnerable in a lot of ways but I think they’ll get away with what they do.”
