Hatching a Plan

The Hatch Act has been a topic of conversation in these parts over the past few months, and the Lincoln Republicans think they have a candidate in Democrat State Representative Mary Ann Shallcross Smith. Furthermore:

The Lincoln Republican Town Committee also issued statements around Shallcross-Smith’s campaign with specifics regarding the use of her 501 (c) (3) organizations to obtain a win in the election on November 4th. Michael Napolitano, Chairman of the Lincoln Republican Town Committee offered up several key points supported by IRS tax law that gave the Shallcross- Smith campaign an unfair and unallowable advantage in the race. Said Napolitano, “She utilized her Kids Klub location as campaign headquarters and executed a phone bank to call local voters from inside Kids Klub. Individuals have come forward informing us that they received a telephone call with the child care number on their caller ID asking for a vote for their candidate. In addition, she had campaign signs on the property of the 501 (c) 3 non-profit facility. …
Nonprofit 501(c)(3) organizations are forbidden from engaging in any political activity in support or opposition of a candidate for public office. The Internal Revenue Code states that 501(c)(3) organizations must “not participate in, or intervene in (including publishing or distribution of statements), any political campaign on behalf of any candidate for public office.” A 501(c)(3) organization that violates this rule may lose its tax-exempt status and face other financial penalties. The IRS has noted a large amount of 501 (c) 3 violations over the past few years. “The law does not allow charities to participate in political campaigns,” said IRS Commissioner Mark W. Everson. “While the vast majority of charities, including churches, did not engage in politicking, our examinations substantiated a disturbing amount of political intervention in the 2004 electoral cycle.

Of course, pretending that the right hand doesn’t know what the left hand is doing (when in reality the two are washing each other) is a habitual practice in Rhode Island.
Full press release in the extended entry.

The Lincoln Republican Town Committee this week, reinforced the complaint filed by the State Republican party last month that had filed a formal request for an immediate investigation into the likely Hatch Act violations of six Democrat candidates for the Rhode Island General Assembly, which included Mary Ann Shallcross-Smith. Mary Ann Shallcross-Smith is the President of Kids Klub, a 501 (c) (3) that takes in both state and federal money.
The Committee further stated that Shallcross-Smith may be ineligible to serve in State or Local office because of the Hatch Act, 5 U.S.C. § 1501 et seq., which prohibits “State or local officer[s] or employee[s from] … be[ing] a candidate for elective office.” § 1502(a). “State or local officer or employee” is defined by the act as “an individual employed by a State or local agency whose principal employment is in connection with an activity which is financed in whole or in part by loans or grants made by the United States or a Federal agency….” § 1501(4). The Hatch Act, by its own terms, applies to officers and employees of a “State or local agency,” Shallcross-Smith works for a day care provider. Therefore, under 42 U.S.C. § 9851(a) private entities taking federal money are considered state or local agencies for purposes of the Hatch Act’s limitations on political activity. § 9851(a) states: “Any agency which assumes responsibility for planning, developing, and coordinating federal programs and receives assistance under this sub chapter shall be deemed to be a State or local agency.” This sweeps a private day care provider into the Hatch Act and § 9851(a) effectively modifies § 1501(4).
The Lincoln Republican Town Committee also issued statements around Shallcross-Smith’s campaign with specifics regarding the use of her 501 (c) (3) organizations to obtain a win in the election on November 4th. Michael Napolitano, Chairman of the Lincoln Republican Town Committee offered up several key points supported by IRS tax law that gave the Shallcross- Smith campaign an unfair and unallowable advantage in the race. Said Napolitano, “She utilized her Kids Klub location as campaign headquarters and executed a phone bank to call local voters from inside Kids Klub. Individuals have come forward informing us that they received a telephone call with the child care number on their caller ID asking for a vote for their candidate. In addition, she had campaign signs on the property of the 501 (c) 3 non-profit facility. The property is located at 462 Smithfield Avenue in Pawtucket. A Toyota Rav 4 registered to Kids Klub, with a DACARE license plate was observed being utilized by Shallcross-Smith while canvassing the neighborhoods.”
Nonprofit 501(c)(3) organizations are forbidden from engaging in any political activity in support or opposition of a candidate for public office. The Internal Revenue Code states that 501(c)(3) organizations must “not participate in, or intervene in (including publishing or distribution of statements), any political campaign on behalf of any candidate for public office.” A 501(c)(3) organization that violates this rule may lose its tax-exempt status and face other financial penalties. The IRS has noted a large amount of 501 (c) 3 violations over the past few years. “The law does not allow charities to participate in political campaigns,” said IRS Commissioner Mark W. Everson. “While the vast majority of charities, including churches, did not engage in politicking, our examinations substantiated a disturbing amount of political intervention in the 2004 electoral cycle.
The Lincoln Republican Town Committee also believes that several employees of the Kids Klub may have worked on the Shallcross-Smith campaign. Said Napolitano, “Although employees of a 501 (c) 3 may choose to do campaign work during their non-employment time, I believe in this instance that was not always the case. Ms. Shallcross-Smith appears to have utilized employees during business hours to perform campaign related tasks including the issuance of press releases with dates and times on them.”
Said Napolitano, “There are also many other issues with respect to IRS tax code that can clearly be questioned. These include but are not limited to the make-up of the board of Kids Klub, and the appearance of a private benefit or inurement. There is also the issue of an Ethics Complaint filed in 1995 regarding Shallcross-Smith’s business involvement with the Town of Lincoln School system while she served on the School Committee. This complaint was later mysteriously withdrawn by the individual who filed it; however the allegations listed within it follow a clear pattern.”
Said Napolitano, “It is clear that this candidate may not have done her homework before she entered the race for State Representative. In addition, many of our campaign volunteers observed her well within the 50 foot range of the entrance to the Lonsdale School polling place on Election Day. At one point the Lincoln Police department came and asked her to move. When they left she moved back well within the 50 feet. We also have reports of other polling location violations including her staff going into a location to solicit votes. She also violated campaign finance laws as she took a $5000 loan from her husband, which is on her campaign finance reports. The maximum allowed under Rhode Island law is $1000.” Further information can be viewed on the Lincoln Republican Town Committee’s web site at www.lincolnrepublicans.com

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Tom from the LC
Tom from the LC
12 years ago

She’s also the one who claims that she only stays at her $1M house in Little Compton 12 days a year and spends the rest of her time in Lincoln. How many people running a day care operation only spend 12 days a year in a $1M home and use the address of that home for things like tax returns?
Very shaky indeed.
Unfortunately, I don’t believe the IRS has the power to remove her from office, but I bet losing her 503 status would hurt quite a bit.

Michael Napolitano
Michael Napolitano
12 years ago

In addition she also took a $5,000 loan for her campaign from her spouse, which is in violation of campaign finance laws. I called the state Board of Elections and they verified this fact. You can only loan large amounts to yourself, you can’t take a loan from even your own spouse. This can be viewed at this link:
https://secure.ricampaignfinance.com/ExportDocs/547-RICF2-85640-b97377bb-fa6f-4ea5-8f08-8e322d87b0df.pdf

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