IRS Asked To Investigate Questionable Donation To Cain Campaign

More trouble for the Cain campaign arising out of the in-kind donations from a non-profit corporation run by the man who would go on to manage his campaign:

There are more potential legal headaches for Herman Cain’s presidential campaign: The Internal Revenue Service is being asked to investigate allegations that the Cain campaign’s chief of staff improperly used $40,000 of funds from a tax exempt non-profit to pay for private jets, travel and computers for Cain’s presidential campaign.

In a written complaint being filed today, the Center for Media and Democracy — a Madison, Wisconsin based watchdog group — charges that leaked financial records show that Block used a non profit group, called Prosperity USA,  to improperly pay Cain campaign expenses. If verified, the group says Prosperity USA – which was founded by Cain’s chief of staff Mark Block — should be stripped of its tax exempt status.

“A charity founded by Mr. Block appears to have fronted tens of thousands of dollars to a political  campaign that was led by Mr. Block … This requires an investigation by the IRS into the charity’s activities and expenditures,” said Lisa Graves, the executive director of the Media and Democracy Group in an eleven page letter to IRS Commissioner Douglas Shulman.

The Cain campaign did not immediately respond to a request for comment Monday morning. The campaign’s lawyer last week told NBC News that the Cain campaign takes the allegations “very seriously” and had hired an outside counsel to review the issue … The Center for Media and Democracy’s  letter is the second legal complaint in four days triggered by the publication of Prosperity USA internal financial records by a blogger, Dan Bice, who writes for the Milwaukee Journal Sentinel.  The IRS will investigate such complaints, but the probes – which can result in fines and a denial of tax exempt status – can often take years before they are resolved.  (On Friday, the Citizens for Ethics and Responsibility filed a complaint alleging election law violations with the Federal Election Commission.)

It seems unlikely that this is going to have an impact on the race. Most people don’t seem to care about the legal technicalities of campaign finance laws, and we’re not going to get any kind of resolution of this matter while this campaign is active. Nonetheless, I consider this to be far more serious than decade old sexual harassment allegations.

FILED UNDER: Campaign 2012, Democracy, US Politics, , , , , , , ,
Doug Mataconis
About Doug Mataconis
Doug Mataconis held a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed far too young in July 2021.


  1. Jerry Trent says:

    I am given to understand the the Herman Cain campaign staff has embezzled money, some $40,000.00.

    Please investigate this.