New IRS Complaint Against Non-Profit Davis Vanguard News Service

A complaint filed with the Internal Revenue Service by Sacramento Attorney Michael Vinding on behalf of a group of clients, accuses the People’s Vanguard of Davis, Inc., and David Greenwald, founder, editor and executive director of the non-profit the Davis Vanguard, of running afoul of IRS regulations barring non-profits from taking partisan positions.  “As a 501(c)(3) corporation, [defendants] repeatedly engaged in prohibited political campaign intervention in violation” of several IRS codes covering non-profits reads the complaint. “The Vanguard did so in connection with at least two elections, including the Yolo County District Attorney election of 2018 and now with the election anticipated for 2022,” the complaint adds.

Last week when churches throughout Virginia began airing a campaign video by Vice President Kamala Harris for gubernatorial candidate Terry McAuliffe, immediately the question of the legality of the ad airing became news because Internal Revenue Service rules emphatically state that churches and charities are not legally allowed to get involved in political campaigns, the New York Post reported. Additionally, White House press secretary Jen Psaki, had a complaint filed against her by government watchdog Citizens for Responsibility & Ethics in Washington, for endorsing McAuliffe in the Virginia governor’s race, from the White House briefing room. CREW charged that Psaki violated the federal Hatch Act Yolo County District Attorney by praising McAuliffe during a regular press briefing.

“Currently, the law prohibits political campaign activity by charities and churches by defining a 501(c)(3) organization as one ‘which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office,’” the IRS website says.

The Globe contacted Mr. Greenwald Thursday via email to weigh in on the complaint, but we did not hear back.

Attorney Vinding explained in a cover letter to the IRS (below), “While personal opinions may be presented in appropriate forums, Mr. Greenwald the Vanguard Executive Director, “may take positions on public policy issues, including issues that divide candidates in an election for public office as long as the message does not in any way favor or oppose a candidate.” (FAQs About the Ban on Political Campaign Intervention by 501(c)(3) Organizations: Organization Position on Issues, IRS (May 21, 2020).)

On its website, the Davis Vanguard also advertises “our 11th Annual Fundraiser – The Future of Criminal Justice Reform is Here.” The fundraiser features Dr. Melina Abdullah, Co-Founder Black Lives Matter LA, and Chesa Boudin, San Francisco District Attorney, two devoted defund-the-police advocates and self-described “police reformers.” Also listed are Jonathan Rapping, Founder and President of Gideon’s Promise, “A Public Defender Movement to Transform Criminal Justice,” and Jody Armour,  Professor of Law at USC whose “expertise ranges from personal injury claims to claims about the relationship between racial justice, criminal justice, and the rule of law.”

Under their “Guiding Principles,” the Davis Vanguard says, “The People’s Vanguard of Davis is devoted to four critical values: transparency, democracy, open government and social justice.”

“Above all else, the Vanguard stands for the fight for social justice.”

According to Vinding, his client’s opinion is that “multiple postings on the Vanguard website relating to the 2018 and anticipated 2022 Yolo District Attorney campaigns actively advocate for a certain candidate and against another candidate in violation of the law.”

The complaint provides numerous examples of advocacy including this, listed in the Appendix Executive Summary of the complaint:

During the election for District Attorney in Yolo County, California, in 2018, David Greenwald, founder, editor and executive director of the non-profit Davis Vanguard, sent an email to a local attorney as follows:

“I was perusing Jeff Reisig’s website and noticed you are listed as an endorser. Is that current? We have a candidate running against him we are hoping will knock him off and would be a reformer. Just reaching out to see if it were possible to get you to pull the endorsement? Thanks, David.”

(Emphasis added by attorney Vinding)

“As shown above, Mr. Greenwald was apparently invested in the campaign for challenger Dean Johansson and influencing others to vote against incumbent District Attorney Jeff Reisig for the election in 2018, at least in his personal capacity,” the complaint says. “This is his right. However, based on the material and analysis below, it is my client’s opinion that Mr. Greenwald simultaneously used his non-profit ‘news’ website/blog (the Davis Vanguard, a 501(c)(3) corporation) to ‘intervene’ in that District Attorney election to support Johansson, which is prohibited by non-profit law.”

Background Facts Regarding the Davis Vanguard as presented in the complaint appendix:

• The People’s Vanguard of Davis (Vanguard) is a website purporting to provide local news coverage. The 2018 Form 990-EZ for the Vanguard stated its primary exempt purpose as “Nonprofit and community education”; the program service accomplishments included things consistent with being an online newspaper, e.g., “Covered the news in Davis and Yolo County reaching an average of 3000 to 5000 people daily with three to five news stories each day,” and sent interns to Court to “monitor court cases and report to the public.”4
• The Vanguard should thus be considered “widely distributed” for the purposes of 501(c)(3) analysis. (See R.R. 78-248). The Vanguard solicits donations of up to $5,000, citing its 501(c)(3) status, with the claim that it “can help us provide more vital coverage, hire more reporters, and continue to expand.”5

Other examples, according to the complaint:

• January 28, 2018 David Greenwald; this post (now the third post regarding a candidate running for elected office in four days) again casts incumbent DA Reisig in a negative light while romanticizing and extolling Mr. Johansson and comparing him, at length, to a newly elected reform DA, Philadelphia’s Larry Krasner.
• January 29, 2018, David Greenwald; this article again criticizes the results of the Yolo conviction integrity unit created in the Fall of 2014, then over three years ago, and draws comparisons with how Philadelphia District Attorney Larry Krasner expanded the conviction integrity review process. This post criticizing the conviction review efforts of DA Reisig’s office does not relate to any current event. This is more apparent campaigning designed to put incumbent Reisig in a negative light and to highlight the platform of Mr. Johansson. This post criticizes the incumbent’s conviction integrity unit while extolling the efforts of Larry Krasner in this area, while prior posts suggested Johansson is the Yolo Krasner. In fact, the previous post from January 28, 2018 specifically told readers to look to Mr. Krasner’s office as “a guide” for how Mr. Johansson would lead his DA’s office. According to Rev. Rul. 2007-41, “section 501(c)(3) organizations must avoid any issue advocacy that functions as political campaign intervention.” Here, the “tags” for the post include “conviction integrity unit,” “Jeff Reisig,” and “Wrongful convictions.”
• February 26, 2018, David Greenwald; this is the second of what could fairly be called an advertisement for the forum, again with only Johansson’s campaign picture and again with the pitch that one can “have a chance to meet Dean Johansson.” The post also imbeds a large “banner” link at the bottom back to the February 25, 2018 post about Johansson; this banner link appears to be done to further promote Johansson. The post is followed by comments by Tia Will that cast DA Reisig in a negative light.
• February 28, 2018, David Greenwald; this post questions the credibility and impartiality of U.S. Attorney McGregor Scott as an independent investigator of an event, expresses “concern” regarding (a) a supposed conflict of interest; (b) that Scott was appointed by Donald Trump, and (c) drug raids in Yolo County. The post then prominently states that Mr. Scott is listed “as an endorser of the district attorney [Jeff Reisig] for reelection.” Tags for the post include “Jeff Reisig,” and “McGregor Scott.” The apparent intent of this post is to provide negative press to Mr. Scott and then link Scott to DA Reisig, specifically in the context of the election, which is partisan and intervening

There are numerous more examples through June of 2018.

April 30, 2021 to Present, from the Complaint Appendix:

• Vanguard Intervention in the 2022 Campaign. In 2021, a County resident named Cynthia Rodriguez announced her candidacy for District Attorney for the 2022 election. Among the endorsements listed on the campaign website for Ms. Rodriguez are Nora Oldwin and Cecilia Escamilla Greenwald, whom are listed as “Board Member” and “Secretary,” respectively, in the Vanguard’s 2020 Form 990-EZ.51 The below postings show that from the time of this announcement the Vanguard established itself as an integral part of the digital platform of, and a mouthpiece for, Ms. Rodriguez’s candidacy. The “theme” of the interventions described in the posts below is that any progressive or reform accomplishments by DA Reisig are either disingenuous, flawed or do not go far enough. Put another way, the attempt to advocate for a candidate and influence voters to not support the incumbent cannot be reasonably disputed.

The complaint Appendix is 33 pages of documentation and several more pages of attachments.

Here is the cover letter:

Here is the Appendix to the Complaint: