Pious Politicking Penalized

Federal Court Upholds Internal Revenue Service Action Against New York Church For Partisan Electioneering

During the 1992 presidential election, New York pastor Daniel Little became so outraged over the candidacy of then-Arkansas Gov. Bill Clinton that he decided his church had to warn the nation.

Little's congregation, the Church at Pierce Creek, just outside of Binghamton, announced its concerns in an unusual way: a full-page advertisement, paid for by the church, that ran in USA Today on Oct. 30, 1992.

Headlined "Christian Beware," the ad -- which also ran in The Washington Times, a conservative daily in the nation's capital owned by the Rev. Sun Myung Moon -- accused Clinton of supporting "policies that are in rebellion to God's Laws." It insisted the Democrat favored "abortion on demand," "the homosexual lifestyle" and "giving condoms to teenagers in public schools."

The ad conceded that many Americans were concerned about the economy but said, "The Bible warns us to not follow another man in his sin, nor help him promote sin -- lest God chasten us." It concluded with the words, "How then can we vote for Bill Clinton?" But it

didn't stop there. The advertisement went on to solicit "tax-deductible donations" to pay for more ads like it.

Not surprisingly, the fundamentalist congregation's action raised a few eyebrows. Critics said church sponsorship and placement of such a nakedly partisan advertisement was unprecedented. They said it was audacious.

And some also said it was illegal.

The Internal Revenue Service Code specifically forbids non-profit organizations, which includes houses of worship, from intervening in political campaigns, including issuing statements in support of or in opposition to any candidate. It seemed obvious that the Church at Pierce Creek had stepped over the line.

The IRS agreed. In 1995 the federal tax agency revoked the church's tax-exempt status. The church, aided by TV preacher Pat Robertson's American Center for Law and Justice (ACLJ), sued the IRS to get it back.

But in a landmark ruling issued March 30, a federal judge in Washington, D.C., held that the IRS acted properly. Observers say the 22-page decision in the Branch Ministries, Inc., et al v. Rossotti case is a dramatic setback for Religious Right efforts to politicize America's churches. (Branch Ministries is the parent organization of the Church at Pierce Creek.)

Americans United for Separation of Church and State had more than a passing interest in the case, since AU was the organization that originally blew the whistle on the Church at Pierce Creek. On Nov. 3, 1992, just days after the ad ran in USA Today, Americans United filed a formal complaint with the IRS, requesting an investigation.

Now that the court had ruled, officials at Americans United feel vindicated. "This landmark ruling sends a strong message that churches must obey the prohibition on partisan politicking if they expect to remain tax exempt," said AU Executive Director Barry W. Lynn in a press statement issued the day after the ruling.

"From now on," continued Lynn, "houses of worship that consider risking their tax exemption to get involved in electioneering had better realize that it's a gamble they're likely to lose."

In 1992 the Church at Pierce Creek seemed very willing to take that gamble. The 400-member congregation, which describes itself as "non-affiliated Protestant," is militantly anti-abortion and is the home church of radical anti-abortion activist Randall Terry. In November of 1992, Little told Church & State he was aware the ad might lead to trouble with the IRS but decided to run it anyway.

"We think we won't [get into trouble with the IRS], but we're cognizant of the fact that there could be repercussions in a number of ways, our tax-exempt status being one of them," Little said.

In April of 1995, with his church's tax exemption gone, Little took a more defiant stance. Appearing via telephone hook-up on the NewsTalk Television Network in a debate with AU's Lynn, Little told host Patrick Halpin that the church hadn't checked with an attorney about potential legal pitfalls before placing the ad.

"Why should we consult attorneys?" he asked. "We have the word of God....Principle sometimes takes precedent over silly laws."

That attitude did not serve Little and his flock well in federal court. In his decision, U.S. District Judge Paul L. Friedman noted that the church's action was without precedent. Little and ACLJ attorneys tried to argue that the church was the victim of selective enforcement, claiming it was being punished for its actions while liberal-leaning churches and other conservative congregations had engaged in politicking with no penalties.

To buttress the church's argument, ACLJ attorneys pointed to more than five dozen instances of candidates speaking in pulpits. But Friedman

wasn't persuaded and noted that no cites of political activity were remotely similar to what the Church at Pierce Creek did.

"The IRS decided to revoke the tax-exempt [status] from the Church because the Church had run a print advertisement in two national newspapers that was fully attributable to the Church and that solicited donations," wrote Friedman. "Plaintiffs have pointed to no other instance in which a church so brazenly claimed responsibility for a political advertisement in a national newspaper and solicited tax-deductible donations for that political advertisement. In fact, plaintiffs have provided no evidence of an instance in which a political act could so easily be attributed to a tax-exempt church."

Friedman also rejected claims that the IRS's action had violated its religious freedom rights. "Plaintiffs were offered a choice: they could engage in partisan political activity and forfeit their [tax-exempt] status or they could refrain from partisan political activity and retain their [tax-exempt] status," Friedman observed. "That choice is unconnected to plaintiffs' ability to freely exercise their religion. Plaintiffs therefore have not demonstrated that the IRS substantially burdened their free exercise of religion."

Today Little insists that the congregation never intended to affect the outcome of the '92 election. At the time the ads were placed, he said, polls showed Clinton with a comfortable lead. "Our thought was to sway a few Christian people from the ignominy of helping this man do what he was saying he would do," Little said last month in an interview with Church & State.

The New York pastor has refused, however, to say who paid for the ads, which cost thousands of dollars. This leaves open the possibility that Clinton opponents contributed the money, a donation that normally would have to be reported to fair campaign authorities.

Little's attorneys with Robertson's ACLJ were dismayed by the ruling and vowed to appeal. The group's reaction isn't surprising, considering how much importance the Robertson legal unit has placed on the case. In a fund-raising appeal sent in February of 1998, ACLJ Chief Counsel Jay Sekulow reported that he had directed ACLJ Washington attorney Colby May "to make this case his top priority."

The ACLJ has repeatedly used the controversy over the Church at Pierce Creek for fund-raising. But Americans United contends that many of its letters have included baseless scare tactics or have wildly distorted the facts. In an "Urgent IRS Update" mailed last February, Sekulow, writing in a style to mimic language that would be found in a telegram, asserted, "If we lose this battle with IRS, IRS could use precedent to threaten every church in America into silence..."

In a similar mailing sent out last July, Sekulow reported that the church's only offense was "highlighting moral issues during 1992 presidential campaign!" and adds, "If we allow IRS to silence this church, then churches across America will be silenced as well! Your own church or synagogue will be vitally affected."

In fact, as Americans United has pointed out repeatedly, nothing in federal tax law prohibits houses of worship from speaking out on political or moral issues. Section 501(c)(3) of the federal tax code bars non-profit groups from intervening in partisan campaigns dealing with candidates, stating that an exempt group may "not participate in, or intervene in (including the publishing or distribution of statements), any political campaign on behalf of (or in opposition to) any candidate for public office."

Most houses of worship in American abide by these rules, and certainly few go so far as to take out newspaper ads attacking specific candidates. (In fact, Americans United was unable to find another instance in which this has occurred.) In light of this, the ACLJ's claim that every church in America could be affected by the ruling in the Branch Ministries case is pure hyperbole.

ACLJ attorneys have also accused Americans United of targeting politically conservative churches. The facts show otherwise: Under Americans United's Project Fair Play, the organization has reported houses of worship to the IRS for endorsing Democrats, Republicans and third-party candidates.

What's next for the Branch Ministries case? The appeal will advance to the federal court of appeals for the District of Columbia in Washington. From there, the case could end up at the U.S. Supreme Court, although the high court would not be obligated to hear it. The entire process could take several years.

AU's Lynn said the organization will continue to track the legal controversy through the courts and weigh in with legal briefs when that is appropriate.

Back in New York, there have been dramatic changes at the Church at Pierce Creek. In fact, it no longer exists. The building sits empty, and Little has moved his congregation into a historic church in downtown Binghamton. The building, formerly a United Methodist church, had been slated for the wrecking ball until Little's congregation bought it at a bargain price and renovated it last year. With the new building came a new name: the Landmark Church.

Little told Church & State that the timing of the move was serendipitous. As for the name change, he said the church changed it since Pierce Creek is a geographical feature near the old location. The word "landmark," he said, was chosen because the church is considered a historic landmark.

The Landmark Church does not hold 501(c)(3) tax-exempt status, and Little vows to "never place a church under 501(c)(3) again." Landmark Church, he said, is organized as a "free religious association." Little said he is not sure if this different status allows the church to engage in partisan politicking and said as far as he knows no church with this status has tested the IRS on the question.

Washington attorney Milton Cerny, the former head of the Exempt Organizations Ruling Area at the IRS, said churches claiming this type of status are still required to abide by the regulations imposed on 501(c)(3) organizations. (Cerny does consulting work for Americans United and last year drafted a memo to churches warning them against distributing biased voter guides.)

"The Church at Pierce Creek case is one of the most important legal controversies we've had to deal with," AU's Lynn says. "Americans United intends to stay involved in this issue to make certain that America's democratic process and our houses of worship aren't corrupted by sleazy politics."