JAMES TARANTO: Not-for-Profit Propaganda What is the California Endowment?
http://online.wsj.com/article/SB10001424127887324188604578543540608029314.html?mod=WSJ_Opinion_MIDDLETopOpinion
A reader received a curious item in the mail the other day: A four-page advertising brochure touting ObamaCare. “Obamacare is working,” the cover announces: “NOW IT’S UP TO YOU.” Below that exhortation is a photo of the president grinning as broadly as a Pepsodent pitchman.
The purpose of the ad is not just to promote ObamaCare but to urge California’s lawmakers to “finish the job for the millions of Californians who won’t be covered, many because of their immigration status.” The ad features photos of two other politicians, Assembly Speaker John Perez and United Farm Workers co-founder Dolores Huerta, with quotes supporting the goal.
There’s a tear-off postpaid card with an already-checked check box alongside the attestation “I believe everyone should have access to affordable, preventive health care” and room for the recipient to fill in his personal information. At the bottom of the card–a nice touch–is a line of seven faces: six young people and one old dude. The group is so ethnically diverse, it even includes a kid from Cheron.
The return address identifies the sender as “The California Endowment.” What is the California Endowment? At its website, one can glean the answer from an overview of its history and activities, as well as its 428-page tax filing for the fiscal year ending March 31, 2012.
The endowment is a nonprofit corporation, exempt from taxation under Section 501(c)(3) of the tax code. That means that its contributions as well as most of its operations are untaxed. But if you’d like to make a contribution, you’re out of luck: “Thank you for the generous offer, but we do not accept donations,” the website announces.
They hardly need to. The tax filing lists the endowment’s total assets as of the end of the fiscal year as $3,660,548,295. Its net investment income for the year was more than $160 million. If you took in that kind of money, you’d pay a federal income tax of 15% (20% effective this year), or $24 million ($32 million), and lefties would scream that you should be paying more like 40%. As a 501(c)(3), the endowment paid an excise tax of 1%, or around $1.7 million.
Where did all that money come from? “The California Endowment was established in 1996 as a result of Blue Cross of California’s creation of its for-profit subsidiary, WellPoint Health Networks,” the website explains. In other words, it’s a tax-free arm of the health-insurance industry. Although the endowment is, according to its website, “independently governed and operated,” it’s not hard to see how WellPoint and other private insurers have an interest in promoting more government insurance subsidies.
The reader who forwarded us the brochure commented: “Maybe the IRS should look at these folks.” We doubt it would do much good. When you have billions of dollars, you can easily afford to pay lawyers to look over something like this and make sure it won’t run afoul of the regulatory restrictions that govern political activity by nonprofits.
How do they get away with it? The Obama picture looks like something from a totalitarian cult of personality, but now that he is safely re-elected, he is not a candidate for office. Neither, it turns out, is Speaker Perez, who is currently serving his third term in the Assembly, is prohibited by California law from seeking another term, and has not launched a campaign for another office in 2014. Further, the brochure makes no reference to any specific legislation, only to the general goal of providing “everyone” with “access” to “affordable health care.”
This column does not think the Internal Revenue Service should take a punitive approach to the endowment’s propagandizing for semi-socialized medicine. (Similarly, our colleagues on The Wall Street Journal editorial page were critical of the IRS’s 2004 investigation of the NAACP.)
But it does underscore why the IRS’s abuse of grassroots conservative groups is so galling. ObamaCare was enacted in 2010 against overwhelming public opposition. This energized the Tea Party, which helped turn the 2010 elections into a referendum in which ObamaCare was resoundingly defeated.
Obama’s re-election was another referendum on ObamaCare. That one he narrowly won–but as it turns out, the IRS was cheating on his behalf. The California Endowment’s pro-ObamaCare propaganda may be unobjectionable in itself, but the government’s systematic suppression of dissent lends another layer of illegitimacy to this monstrous law.
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