Watchdog group files IRS complaint, says Bloomberg using charity as political tool

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Bloomberg nearly admits to 'buying' Democrats' House majority on debate stage

2020 hopeful Michael Bloomberg touts the $100 million he spent to help Democrats to take back the House in 2018; Conservative Political Action Committee Chair Matt Schlapp reacts as CPAC kicks off outside Washington, D.C.

A watchdog group lodged a complaint with the IRS Wednesday arguing that billionaire presidential candidate Mike Bloomberg has used his charitable organization as a tool to build support for his presidential run, in violation of federal rules for such groups.

The conservative watchdog Government Accountability & Oversight – not to be confused with the U.S. Government Accountability Office – sent a letter to IRS Commissioner Charles Rettig saying that Bloomberg and his tax-exempt charity "may be operating in violation of the Internal Revenue Code."

"Recent and numerous media reports lend credence to the idea that Michael Bloomberg’s charitable contributions have been and continue to be used to support his political campaign for president," the letter, signed by the group's executive director, Matthew D. Hardin, reads. "Even if these numerous assessments, standing alone, are not sufficient to give rise to an IRS investigation, the rest of the known context suggests a pattern of deliberate use of charitable, tax-exempt dollars for political purposes."

FILE - In this Oct. 13, 2018 file photo, former New York City Mayor Michael Bloomberg speaks at a Moms Demand Action gun safety rally at City Hall in Nashua, N.H. (AP Photo/Cheryl Senter, File)

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The Bloomberg campaign defended the former mayor's actions in a statement provided to Fox News. It also took a shot at Government Accountability & Oversight, which is also a 501(c)(3).

"Don't be fooled - these baseless allegations come from a deceptively named front group for climate change skeptics, at least some of whom have been funded by the coal lobby," campaign spokesman Stu Loeser said. "Mike is proud of what he got done as a leading environmentalist, including closing polluting coal plants across the US, and he's also proud of the enemies he's made when standing up to polluters. And we will soon be writing our own letter to the IRS asking them to investigate the obvious political activity occurring under the aegis of supposed 501c3."

Bloomberg has been a generous donor to progressive causes for years, especially since he left his post as New York City mayor. He's funded the gun control groups Moms Demand Action and Everytown for Gun Safety, as well as numerous other left-of-center causes. He boosted one NYU program that pays the salaries of experienced environmental litigators that it then farms out to state attorney general offices to pursue "progressive" environmental issues — a move West Virginia Attorney General Patrick Morrisey said raises "a fundamental question of ethics and who's running our government."

Government Accountability & Oversight, citing numerous media reports, pointed out that Bloomberg has been endorsed by the mayors of several cities which were on the receiving end of huge grants from his foundation.

Stockton, Calif., Mayor Michael Tubbs endorsed Bloomberg after the billionaire donated $500,000 to an education organization in his town, the watchdog group said. Washington, D.C. Mayor Murial Bowser endorsed Bloomberg after he poured $4 million into the district's public schools. The report cites several other elected officials whose constituents were on the receiving end of some of Bloomberg's vast fortune that then endorsed him.

On the federal side, Everytown for Gun Safety – which is funded by Bloomberg Philanthropies – dropped over $4 million to support Rep. Lucy McBath, D-Ga., in 2018. She later endorsed Bloomberg.

'Presidential campaigns do not simply occur to someone, no matter how wealthy they are, but are the products of many months and often years of deliberate organization and preparation. The chronology detailed by media outlets presents a compelling argument that Mr. Bloomberg’s philanthropy was performed with a political purpose.'

— Matthew D. Hardin, Government Accountability & Oversight letter to IRS

WHERE DOES MIKE BLOOMBERG STAND ON THE ISSUES?

While there is no accusation that the specific expenditures from Bloomberg's 501(c)(3) charity violate the law, Government Accountability & Oversight argues that taken together, the sum of its activities appears to have been intended to help Bloomberg build a political network of people he has helped with the goal of propelling the billionaire to the White House.

"This reporting makes clear the appearance that Bloomberg Philanthropies was used as a means to recruit elected officials for future endorsements," the organization said in a press release. "Presidential campaigns do not simply occur to someone, no matter how wealthy they are, but are the products of many months and often years of deliberate organization and preparation. The chronology detailed by media outlets presents a compelling argument that Mr. Bloomberg’s philanthropy was performed with a political purpose."

But even if that is not enough to cause the IRS to look into the Bloomberg organization, the letter argues, there is still more reason to be suspicious of Bloomberg Philanthropies. A 501(c)(3) organization may not engage in lobbying as a "substantial" part of its activities, according to the IRS. The watchdog's letter points out that in its 2019 report on its activities, Bloomberg Philanthropies uses the word "lobbying" twice, "legislation" three times, "legislatures" once and "Congress" four times. In addition, it uses the words "policy" or "policies" dozens of times.

"Taken together, the report’s numerous references to legislative activities, legislative actions, and legislative proposals belie substantial lobbying or political activity on the part of Bloomberg Philanthropies," the watchdog says.

Fox News did not immediately receive a response to a request for comment from Bloomberg Philanthropies.

Democratic presidential candidate and former New York City Mayor Mike Bloomberg speaks during a campaign event in Salt Lake City last week. Utah is one of the states that will vote on Super Tuesday, when 34 percent of the pledged delegates for the Democratic National Convention will be assigned. (AP Photo/Rick Bowmer)

MIKE BLOOMBERG: 5 THINGS TO KNOW

The former New York City mayor, who waited until November to enter the presidential race, has already dropped over $400 million on his campaign. He skipped the Democratic primary's four early states in order to focus on Super Tuesday races, blanketing airwaves with ads and flooding the zone with thousands of well-paid campaign staffers.

His strategy appears to be paying off, as Bloomberg has risen into a top-three contender in most national polls despite two difficult debate appearances and not having secured a single delegate yet.

Bloomberg's opponents have attacked him on his wealth and how he uses it. One debate flub that drew even more criticism Bloomberg's way was a comment he made on Democrats' success in the 2018 midterm elections. The billionaire was taking credit for funding Democrats' recapture of the House of Representatives when he caught himself saying he "bought" the seats that gave Democrats a House majority.

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"They talk about 40 Democrats, 21 of those are people that I spent $100 million to help elect," Bloomberg said. "I bought — I uh, got them."

Fox News' Joseph Wulfsohn contributed to this report.