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What We Know About Americans for Prosperity's Operations in New Hampshire

Casey McDermott, NHPR

As Americans for Prosperity's footprint grows in the New Hampshire, a lot of information about its finances remains shielded from the public. Here's a breakdown of the group's origins here, where it fits (or doesn't fit) into state election laws, and what reporting requirements it does have to follow.

Filings from the Secretary of State's office trace the roots of Americans for Prosperity in New Hampshire to an earlier group that formed here in 1999.

See related story: For This Group, All Politics is Local 

How long has Americans for Prosperity been active in New Hampshire?

Americans for Prosperity’s New Hampshire chapter launched publicly in 2008.  

But its roots in the Granite State stretch back even farther — to a group called “Citizens for a Sound Economy Educational Foundation,” which registered as a corporation with the Secretary of State in 1999. 

As reported by the Center for Public Integrity, “Citizens for a Sound Economy” was founded in 1984 by the same Charles and David Koch — often just referred to as the “Koch brothers” — who later helped to found Americans for Prosperity.

In New Hampshire, "Citizens for a Sound Economy Educational Foundation" officially changed its name to “Americans for Prosperity Foundation” in 2004, according to state records.

On a later filing, AFP Foundation said its purpose was to “to educate consumers, business owners, and the general public about the value and operation or an open market-oriented economy that is free of government interference.”

In 2008, a second group — just “Americans For Prosperity” — registered as a separate but related corporation in New Hampshire. As registered, this one was focused on “educating and mobilizing citizens interested in understanding and helping to solve America’s most pressing policy problems.”

Americans for Prosperity officially launched in New Hampshire in 2008, these filings show, as a "separate, but related, organization" to the existing "Americans for Prosperity Foundation."

What’s the difference between these two organizations?

“Americans for Prosperity Foundation” is registered as a 501(c)(3) nonprofit with the IRS. As explained by Open Secrets: 501(c)3 groups “operate for religious, charitable, scientific or educational purposes” and “are not supposed to engage in any political activities, though some voter registration activities are permitted.” The Red Cross and the Sierra Club Foundation are two other examples of this kind of nonprofit.

Meanwhile, “Americans for Prosperity” is a 501(c)(4) nonprofit. And, according to Open Secrets, these groups are allowed to get involved in political activities — “as long as these activities do not become their primary purpose.” But the IRS hasn’t defined what, exactly, counts as “primary." Right now, Open Secrets reports, “the current de facto rule [for what counts as primary] is 49.9 percent of overall expenditures, a limit that some groups have found easy to circumvent.” Other examples of 501(c)(4) groups include NARAL Pro-Choice America and Planned Parenthood Action Fund.

What do we know about the political activity of either group?

Neither Americans for Prosperity or the foundation is registered as a political committee with the Secretary of State. And that’s because, under the state’s current campaign finance laws, they don’t have to.

Here's an excerpt of the state's campaign finance laws, defining what counts as a "political committee."

The state's definition of a  political committee includes “any organization of 2 or more persons that promotes the success or defeat of a candidate or candidates or measure or measures" — but in this case, “measure” means “any constitutional amendment or question which is submitted or intended to be submitted to a popular vote at an election,” and not necessarily a bill that’s up for a vote in the legislature.

Under the same state election law, a 501(c)(4) organization like AFP “may disclose, but shall not be required to disclose in its itemized statement of receipts, the identity of its donors.”

Even though AFP routinely encourages its members to contact specific legislators about specific pieces of legislation, New Hampshire’s attorney who handles for election law says that doesn’t necessarily mean they would need to report their activities to the state.

“Encouraging people to call specific legislators does not necessarily implicate the definition of a political ad if it’s strictly speaking about legislation or matters of public importance, not the success or defeat of a political party or candidate,” says Assistant Attorney General Brian Buanamano.

Do they have to follow any other requirements?

Both Americans for Prosperity and the foundation are registered with the state’s corporation division.

Both are also registered as active charities with the state’s charitable trusts unit. Terry Knowles, who oversees that unit, says AFP doesn't have to file any separate documentation with the state outside of the standard annual reports (“form 990s”) that charities are required to file with the IRS.

AFP's State Director Greg Moore is also registered as a lobbyist with the New Hampshire Secretary of State. In that role, he files quarterly reports that outline the fees he’s being paid related to lobbying efforts and what expenses the group has spent in that arena.

Has anyone ever challenged the group’s classification in New Hampshire?

The attorney general’s office has received three complaints related to AFP, according to Buanamano.

One complaint, filed in 2012, had to do with the group not being registered as a political committee. Another, also filed in 2012, came from someone who said they were receiving calls from AFP despite being on the “do not call” list. A third complaint was filed in 2014, also related to AFP not being registered as a political committee.

Buanamano, who wasn’t overseeing election matters at the time the complaints were filed, said the state hasn’t taken any enforcement actions against AFP in any of those cases.