Legislative Leaders-IRS Complaint

In this Jan. 19, 2021 file photo, House Speaker Clay Schexnayder, R-Gonzales, left, asks questions during a meeting of Louisiana's income forecasting panel, the Revenue Estimating Conference, while Senate President Page Cortez, R-Lafayette, listens. Louisiana’s chapter of the NAACP has filed a federal complaint against the organization that state Republican legislative leaders have created to promote their agenda. The complaint filed Thursday, March 11 argues the nonprofit launched by Cortez and Schexnayder is violating its tax-exempt status by regularly engaging in political activity.

Louisiana's chapter of the NAACP filed a federal complaint Thursday against the organization that state Republican legislative leaders have created to promote their agenda, arguing the nonprofit is violating its tax-exempt status by regularly engaging in political activity.

Senate President Page Cortez and House Speaker Clay Schexnayder announced the launching of the organization called Leading Louisiana in May 2020. The nonprofit is registered as a 501 (c)(4) tax-exempt social welfare organization, a type of organization common called a "dark money" group because it doesn't have to disclose its donors.

Under IRS regulations, the organizations can participate in politics if that's not considered the group's "primary activity." The NAACP complaint argues that's the main focus of Leading Louisiana, by endorsing candidates, touting Cortez and Schexnayder and planning involvement in the Legislature's upcoming redistricting process.

Leading Louisiana "is concealing its donors and expenditures from public scrutiny while working to influence the outcome of elections in the short and long term," attorney Evan Bergeron wrote in the complaint filed on behalf of NAACP Louisiana. The complaint also was sent to the Federal Elections Commission for review.

The organization — registered with the state as Leading Louisiana Forward – is run by Republican political consultant Lionel Rainey, who suggested the complaint was meritless.

"Leading Louisiana is an educational organization focused on supporting the policies of Senate President Page Cortez and Speaker Schexnayder as they lead Louisiana out of the COVID-19 economic crisis. We fully comply with all rules regarding primary purpose and limited political activities," Rainey said in a statement.

Leading Louisiana changed its Facebook designation Thursday from "political organization" to "nonprofit organization" after the complaint was filed.

The NAACP complaint seeks an investigation of the organization and suggests it should be designated as a political action committee required to publicly disclose its contributors and spending.

"The people of Louisiana deserve to know who is paying for access to their public officials," the complaint says.

An IRS spokesperson said Thursday that he couldn't confirm receipt of the complaint. "Federal employees, by law, cannot discuss tax return information," Anthony Burke said.

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Allies of Gov. John Bel Edwards have created a similar dark money group, called A Stronger Louisiana, to promote the Democratic governor's policies.

When it was announced, Leading Louisiana was described as primarily focused on economic recovery from the coronavirus pandemic. Its website features a video touting Cortez and Schexnayder for setting up a business recovery task force, pushing tax break legislation and creating a small business grant program.

But the organization also has branched out beyond the initial parameters described.

It has endorsed Republican candidate Julia Letlow for the northeast-Louisiana based 5th District congressional seat in the upcoming March 20 special election. And it's planning to be involved in redistricting work, the once-a-decade legislative process for redrawing political maps to account for population shifts.

Redistricting is inherently political, with lawmakers designing districts that can protect their political fortunes and benefit their parties.

The NAACP, which monitors redistricting for voting rights concerns, said in its federal complaint that it became worried about Leading Louisiana when political reporter Jeremy Alford wrote that the organization intended to hire people to work on redistricting efforts.

"The revelation about (Leading Louisiana's) hiring of outside demographers and attorneys to manipulate the redistricting process, all while concealing the sources of its income, strongly suggests more serious offenses that must be thoroughly investigated," the NAACP complaint says.

Rainey didn't deny the redistricting plans but refused to talk about specifics. He said Leading Louisiana will "share information with the public regarding redistricting options in full compliance with the organization's non-profit purpose."

The collaboration is unusual between Louisiana's House and Senate leaders. Traditionally, the chambers' leadership operate independently, but Cortez and Schexnayder have demonstrated a more united front since winning the jobs in January 2020.