As students and local
governments are forced to tighten their belts to help the state weather
a financial crisis, Arnold Watch would expect Governor Schwarzenegger
to be doing his part to move the state toward fiscal stability.
Instead, it appears that the Gov is using accounting schemes and
convoluted committee organizations to avoid paying taxes on his
political war chest and skirt required campaign disclosures.
FTCR sent a complaint letter yesterday to the IRS, asking it to
investigate the activities of Arnold’s "California Recovery Team" (CRT)
and revoke its tax-exempt status.
"It appears that CRT has adopted Section 501(c)(4) tax-exempt status
merely as a tax shelter for its primarily partisan activities. By
exploiting such tax-exempt status, CRT may retain large sums of money
in support of Governor Schwarzenegger and earn tax-free interest income
that would otherwise be taxable if it were a political organization.
Furthermore, CRT also will be able to avoid publicly disclosing the
source of its contributors, some of whom may have contributed up to
$500,000 to obtain access to the Governor at one of his fundraising
dinners," according to FTCR’s complaint.
"Governor Schwarzenegger has so closely aligned his personal political
success with the success of CRT’s efforts, that one is hard pressed to
distinguish between support for CRT and support for Governor
Schwarzenegger himself," concludes the complaint. "We believe CRT
demonstrates the characteristics of a political organization and should
be treated accordingly."
