In May 2011, the National Legal and Policy Center (NLPC) asked the Internal Revenue Service (IRS) to investigate the Barack H. Obama Foundation, which was soliciting tax-deductible contributions from the public although it was not tax exempt. The Foundation is named for Obama’s father and is based in Kenya. Its founder and chairman is Abon’go Malik Obama, whose father is also the father of President Obama.
The IRS not only failed to investigate, but in June 2011 it retroactively granted the Obama Foundation tax-exempt status. Click here to see the letter from Lois Lerner (in photo), Director of the Exempt Organizations division.
It appears that the Obama Foundation was treated quite differently from Tea Party and conservative groups seeking nonprofit status. Soliciting tax-deductible contributions before applying for tax-exempt status is against the law, and should have been an impediment, if not an outright disqualification, from being granted such status.
The disparity is even more striking when one considers that the Obama Foundation sought 501(c)(3) status, which allows donors to deduct contributions while many Tea Party groups sought only 501(c)(4) status, which does not allow for the same benefit. Anyone who has dealt with the Exempt Organizations division, as we have repeatedly over many years, knows that it seldom does anything fast. Yet, the Obama Foundation appears to have received tax-exempt status almost instantaneously, retroactive to April 30, 2008.
The Obama Foundation’s original registered agent in the United States is an American named Alton Ray Baysden, who admitted to the New York Post on May 8, 2011 that the group had not even yet applied for tax-exempt status, but by June 26, 2011, it had its tax exemption.
There were a number of other red flags about the Foundation that should have invited IRS scrutiny, and presumably, resulted in delay.
New York Post reporters Isabel Vincent and Melissa Klein reported on May 8, 2011 that there were questions about what happened to the money:
A group of Missouri State college students who visited the Obama family village of Kogelo in 2009, and who met the president’s half-brother, felt something was amiss. They sensed he was an “operator” and decided to give their donation of 400 pounds of medical supplies directly to a local clinic.
“We didn’t know what he was going to do with them,” said Ken Rutherford, a former Missouri State professor who led the trip and who shared in the 1997 Nobel Peace Prize for his work to ban landmines.
The elder Barack Obama was a Kenyan economist who embraced socialism and anti-colonialism. He had eight children with four different women. President Obama’s mother was Ann Dunham, who his father met at the University of Hawaii in a Russian language class.