Skip to Main Content
 

Marc Owens and Trevor Potter Quoted On Campaign Finance

October 5, 2012, Slate

Marcus S. Owens and Trevor Potter are quoted in the Slate article "James Bopp Jr. Gets Creative," which asks the question:  How does the conservative maestro of campaign finance fund his legal work?  

Excerpt taken from the article.

As James Bennet tells us in his excellent Atlantic piece, Bopp is the legal mind behind the Supreme Court's Citizens United decision and another influential 2007 ruling, which together helped weaken disclosure requirements for political giving and ushered in the unlimited corporate and union donations of the Super PAC era.

Here's a riff on Bopp that Bennet didn't touch on: his unusual relationship with the James Madison Center for Free Speech, a nonprofit organization he co-founded in 1997. As a charity, the organization doesn't really exist, outside of a few tax records in an IRS file cabinet. In reality, Bopp is the Madison Center, and vice versa, and for more than 15 years, the Indiana-based charity has helped fund Bopp's influential litigation by channeling tax-exempt, mostly anonymous donations to his for-profit law firm.

The arrangement stands out in the world of legal advocacy groups, tax experts told me, and raises questions about compliance with the IRS rules governing charitable organizations. "The relationship between this organization and Bopp's law firm is such that there really is no charity," said Marcus Owens, formerly a top official at the IRS responsible for overseeing tax-exempt groups. "I've never heard of this sort of captive charity/foundation funding of a particular law firm before."

While it's not unusual for nonprofits to consistently work with one independent contractor, as Bopp's firm is classified in the group's tax filings, Owens and other experts said that it's well outside the norm for all of a nonprofit's funding to accrue to one company—and that the arrangement raises questions about IRS rules governing "private benefit." Since it's almost impossible to determine where the purportedly independent Madison Center ends and Bopp's law firm begins, the extraordinary overlap might suggest that a primary purpose of Bopp's organization is to fund Bopp's private, for-profit law firm.

To understand the potential problem, it's helpful to look at the Campaign Legal Center, which is linked to attorney Trevor Potter, whom Bennet describes as Bopp's ideological rival. (Note: Both Potter and Marcus Owens work at the Washington, D.C., firm Caplin and Drysdale.) The Campaign Legal Center has the more familiar trappings of a typical nonprofit; it employs at least five paid staffers aside from Potter, maintains significant financial reserves year-to-year, and occupies offices distinct from Potter's own. And while Potter litigates for the group and serves as its "general counsel," the same position Bopp nominally holds with the Madison Center, tax records show Potter receiving a fixed salary from year to year. The sum paid to Bopp's firm, by contrast, balloons and contracts in proportion to the revenue the Madison Center receives.

For the complete article, please go to Slate's website.

________________________________________________

About Caplin & Drysdale
Having celebrated our 50th Anniversary in 2014, Caplin & Drysdale continues to be a leading provider of tax, tax controversy, and litigation legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills - combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment - make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:

-Bankruptcy
-Business, Investment & Transactional Tax
-Complex Litigation
-Corporate Law
-Employee Benefits
-Exempt Organizations
-International Tax
-Political Law
-Private Client
-Tax Controversies
-Tax Litigation
-White Collar Defense

For more information, please visit us at www.caplindrysdale.com.

Washington, DC Office:
One Thomas Circle, NW
Suite 1100
Washington, DC 20005
202.862.5000
        New York, NY Office:
600 Lexington Avenue
21st Floor 
New York, NY 10022
212.379.6000

___________________________

Disclaimer
This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.

© 2017 Caplin & Drysdale, Chartered
All Rights Reserved.

Related Professionals

Related Practices