FOR IMMEDIATE RELEASE: April 10, 2000
CONTACT: Dan Rene, 703-847-3088 or drene@nlpc.org
WASHINGTON, DC -- Today the National Legal and Policy Center (NLPC) filed a formal Complaint with the Federal Election Commission (FEC) against Grassroots.com, League of Women Voters (LWV), League of Women Voters Education Fund, Democracy Network (DNET) and the Center for Government Studies.
The Complaint concerns the website Grassroots.com, which was started as a non-profit venture in 1996 by the LWV and other non-profit groups, but which is now a commercial venture with a valuation of as much as $30 million. Among the investors are Knight-Ridder Ventures, the venture capital firm of Knight-Ridder, Inc., and AIG Devloped Markets Private Equity Fund.
The Complaint alleges violations of the Federal Election Campaign Act in the form of corporate contributions to candidates for federal office. The website offers candidates for federal office an array of assistance, including space on the website, email links, candidate advertising, fundraising solicitation services, and volunteer solicitation services. Corporate contributions to federal candidates is illegal.
The Complaint alleges bad faith by the LWV and the other groups when they represented the website as "non-profit" when they sought an Advisory Opinion for the Federal Election Commission in 1999. The FEC responded positively to the LWV's question as to whether it was legal to provide information on federal candidates and campaigns through the website.
NLPC President Peter Flaherty said "I was surprised when the FEC allowed
Grassroots.com to provide candidate information when at the same time it
was cracking down on other non-profit groups for doing the same thing.
But there is no defense for this ‘bait and switch.' It is clearly illegal
for Grassroots.com to get a favorable Advisory Opinion as a non-profit,
and then turn around and become a privately held, commercial operation."
Flaherty continued, "The League of Women Voters is not only guilty
of violating the law, but of hypocrisy. The League is one of the most vocal
proponents of what they call campaign finance reform. Here they are, however,
doing what is already illegal, and doing what they would further restrict
anyone else from doing."
National Legal and Policy Center is a nonpartisan, nonprofit foundation promoting ethics and accountability in government through research, education and legal action. In 1993, NLPC successfully sued Hillary Rodham Clinton's health care task force. NLPC currently sponsors the Organized Labor Accountability Project and the Legal Services Accountability Project.
NLPC's FEC Complaint against Groots.com, et al.
Grassroots.com's Internal Email Responding to NLPC's Complaint
NLPC's Formal Request for Investigation
of Improper Contact with FEC by Grassroots.com