Commentary: Grover Norquist finds political gridlock pays off nicely

Dan Morain of the Sacramento Bee. (Sacramento Bee/MCT)
Dan Morain of the Sacramento Bee. (Sacramento Bee/MCT)

Gridlock has been good for Grover Norquist.

Norquist is the Beltway denizen who promotes the gimmicky anti-tax pledge signed by most Republican members of Congress, major Republican presidential candidates other than Jon Huntsman, and all but two Republican California legislators.

Norquist can claim credit for helping to block tax hikes in California and in Washington this year, earning him the distinction of being denounced by Gov. Jerry Brown and Senate Majority Leader Harry Reid.

Frustrated at the GOP's unwillingness to compromise on President Barack Obama's jobs bill, Reid declared last week that Republicans "are being led like puppets by Grover Norquist."

Importantly, Norquist's notoriety is paying off the old-fashioned way.

The anti-tax zealot finally got around to filing the 2010 tax return for Americans for Tax Reform, the main tax-exempt nonprofit corporation he controls. It reflects no economic slowdown in his world.

In an Internal Revenue Service filing dated Oct. 26, Norquist's Americans for Tax Reform reported receiving $12.39 million in contributions last year. That was three times the amount that Americans for Tax Reform raised in 2009, and more than Norquist's organization reported rising in the three prior years combined.

Why care about Norquist ? He's one of the nation's most influential conservatives. But while his influence rises, the law allows him to shield basic details about his operation.

Now, a year after the 2010 election, Norquist's tax return shows that Americans for Tax Reform's biggest single vendor last year was Mentzer Media Services, a political advertising firm in Maryland. Norquist paid Mentzer $3.6 million to run ads attacking Democrats and supporting Republicans in last year's congressional races.

Mentzer is a go-to firm for conservative politicos, having waged many high-profile campaigns, taking a hand in the 2004 Swift Boat Veterans for Truth ads smearing Sen. John Kerry, a decorated Vietnam War veteran.

Mentzer has been involved in several California campaigns, too, among them the California Chamber of Commerce's ad last year that swung wildly at candidate Brown, seeking to tie him to job losses and tax increases over the past 35 years.

Norquist does not reveal the identities of his donors. Congress has failed to require disclosure by operators of politically active nonprofit corporations, those known by the Internal Revenue Service code section governing them, 501(c)(4).

However, a few details about some of Norquist's past donors are known. In 2007, for example, Norquist received $25,000 from a foundation controlled by oil billionaires Charles and David Koch of Kansas. That makes sense. The Koches bankroll many conservative causes and campaigns.

Then there are less-than-flattering details about money Norquist took from Indian tribes represented by then super-lobbyist "Casino Jack" Abramoff, an old friend from their College Republican days.

A 2006 U.S. Senate report on the Abramoff scandal detailed how the Mississippi Band of Choctaw Indians, an Abramoff client, gave $325,000 to Americans for Tax Reform in 1999.

Americans for Tax Reform donated $300,000 to a 1999 campaign to oppose the lottery in Alabama. The Mississippi tribal casino operator opposed the Alabama lottery because it worried about competition.

Abramoff was convicted of fraud and tax evasion in 2006, eons ago in Washington time. He is out of prison and speaking about his new book.

Norquist emerged unscathed and is living well, collecting $212,598 in compensation last year from Americans for Tax Reform and a related nonprofit.

Norquist, who would not talk with me, issued a statement through his spokesman listing six reasons why his donations increased in 2010: President Obama, Reid, Nancy Pelosi, and so on.

Norquist fancies himself to be a funny guy who does stand-up, and is a bit of a celebrity, appearing last week in good-natured debate with comedian Bill Maher.

He famously has said he doesn't seek to abolish government. "I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub." He tweeted last month that his staff threw him a birthday party, No. 55.

"Cake had a bathtub decoration. Someday."

Norquist would never acknowledge it, but he benefits mightily from the government he disdains. Like operators of all nonprofits, he pays no federal or state taxes on Americans for Tax Reform's revenue.

Nonprofits don't receive direct government aid. But their tax-exempt status confers a benefit not much different from an ethanol subsidy or a welfare check. Norquist couldn't operate without his entitlement.

"We are subsidizing these organizations," UC Davis law school professor Evelyn Lewis, an expert on nonprofits, said.

There is discussion of legislation in Congress to require politically active nonprofits to disclose donors. Republican partisans have made heaviest use of them in recent campaigns, though Democrats are trying to catch up. Don't hold your breath for more disclosure.

The Internal Revenue Service apparently is reviewing regulations regarding the amount of time that nonprofits like Americans for Tax Reform can devote to campaigns. Change won't come any time soon.

In Washington, Norquist and Americans for Tax Reform are registered lobbyists and get involved in all manner of tax and spending legislation. Given weak disclosure requirements, the public has no clue whether industries that benefit from his stands fund his organization.

Norquist is not registered to lobby in California, but demonstrated his clout in May when he met with Republican legislators here and urged them to block a vote on Brown's $10 billion tax package. Brown called him "highly undemocratic."

By this time next year, Americans for Tax Reform will have filed its tax return showing its 2011 revenue, and we'll know whether gridlock was good for Grover Norquist once more.

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