On Feb. 20, the Internal Revenue Service (IRS) sent the United Church of Christ (UCC) national office a letter announcing the agency has launched an investigation because there is "reasonable belief" that the church violated the ban on partisan electioneering, based on a June 23, 2007, speech by Sen. Barack Obama (D-IL) at the church's 50th General Synod. The investigation has generated strong reactions, and as details emerge, it is clear that this case highlights the inherent weakness of the IRS's facts and circumstances test as a regulatory standard defining what is and is not partisan electioneering.

On Feb. 26, the United Church of Christ released a statement that denied any wrongdoing. UCC President Rev. John H. Thomas called the investigation "disturbing" and said it will likely have "a chilling effect on every religious community." The statement said Obama had been invited to speak a year before he became a candidate for president and that he spoke as a 20-year member of the UCC on the topic of the intersection of faith and public life. He was one of 60 speakers at the annual event, which was held at the civic center in Hartford, CT.

The IRS letter said the agency's concerns were based on articles on the Web that described Obama's speech to nearly 10,000 church members attending the event, and it noted that "40 Obama campaign workers staffed campaign tables outside the center to promote his campaign." The IRS did not mention a complaint filed with the IRS in August 2007 that said Obama did not speak as a non-candidate because he referred to his candidacy once during his 45-minute speech and pledged to sign a universal health care bill by the end of his first term. The identity of the person filing the complaint was redacted, and the complaint was anonymously sent to James Hutchins, who posted it on UCC Truths, a blog that is critical of the UCC denomination's leadership and positions. Hutchins said he did not file the complaint.

The IRS gave the UCC 15 days to respond to a list of specific questions and said the church has the right to request a meeting with IRS representatives "to discuss our concerns." There is no deadline on when the IRS must conclude its investigation.

The UCC statement listed several factors it said indicate there was no partisan campaigning at the event. These include the following facts:

• Obama was invited to speak in his capacity as a church member and elected official a year before he became a presidential candidate
• Before the speech, church officials warned the crowd that the event was not about the campaign and no signs, buttons, leaflets, or other campaign material would be allowed in the civic center
• Obama campaign volunteers were not allowed into the civic center, but set up outside, in public space where the UCC had no control
• There were 60 speakers at the Synod, including Obama, who addressed the intersection of faith with their vocation
• Obama has been a member of Trinity United Church of Christ in Chicago for over 20 years
• Church leaders got legal advice before the event

Strong Reactions

In addition to denying wrongdoing, the UCC criticized the IRS for failing to seek any information from them prior to launching the investigation. The Rev. Davida Foy Crabtree of the Connecticut Conference UCC wrote a letter to the editor of the Hartford Courant and said, "I believe the agency needs to change its process. A simple dialog with our leaders would have established that the facts contradict the complaint. Instead, given the facts in this case, by issuing this letter the agency risks encumbering the free practice of religion."

Others have been equally critical. The Hartford Courant reports that Hartford mayor Eddie Perez has asked Connecticut's congressional delegation to investigate an "intimidation tactic aimed at preventing churches and people of faith from hearing from public officials about the important issues of the day." Americans United for Separation of Church and State Executive Director Rev. Barry Lynn released a press statement saying, "We looked into the situation and did not see a violation of IRS rules. We saw no evidence of UCC officials seeking to appear to endorse his candidacy."

The Huffington Post's John Wilson posted an analysis on Feb. 28 with the headline "IRS Probe of Obama's Church Underscores Anxieties For Nonprofits". Wilson wrote, "What's at stake here is not just religious freedom, but the freedom of speech of all nonprofits. The danger is that when nonprofit groups are silenced, corporate America will be able to dominate even more thoroughly the public debate." Wilson noted that the threat of IRS enforcement has "already caused fearful reactions from nonprofit organizations," citing the example of the School of the Art Institute of Chicago, which banned a documentary about Obama from being shown in January.

But Wilson's biggest objections center around the apparent IRS interpretation of standards for appearances by candidates, noting that there were nearly 50 presidential candidates in the field in June when the speech occurred, and that to require the UCC or any nonprofit to invite all these candidates or none at all "would effectively mean that every nonprofit organization in the country is now banned from having any politician speak at an event at any time."

The UCC Truths blog argues that the entire speech was a campaign speech because Obama made one mention of being a candidate. One article on the blog says, "One could argue that Obama spoke of his work as a US Senator, not as a candidate. But in declaring himself a candidate, how does one deny that his take on the issues doesn't represent his presidential values? When Obama said he was a candidate, his whole speech became a candidate speech." It is not clear that the IRS interprets the law this way.

Finally, the Street Prophets blog said that although there "was no foul" in this case, "anyone who thought that having a single presidential candidate come to speak at a denominational convention wasn't going to draw some kind of fire had to be smoking the wacky tabacky."

IRS Revenue Ruling 2007-41, Candidate Appearances, and the Complaint

The IRS uses an undefined "facts and circumstances test" to enforce the ban on partisan intervention in elections by 501(c)(3) organizations. IRS Revenue Ruling 2007-41 was published last year to provide better guidance, but it leaves many questions unanswered. One section addresses candidate appearances at 501(c)(3)-sponsored events, including those where the candidate is appearing in a non-candidate capacity. It says, in part, "If the candidate is invited to speak, factors in determining whether the candidate's appearance results in political campaign intervention include the following:

• "Whether the individual is chosen to speak solely for reasons other than candidacy for public office;
• Whether the individual speaks only in a non-candidate capacity;
• Whether either the individual or any representative of the organization makes any mention of his or her candidacy or the election;
• Whether any campaign activity occurs in connection with the candidate's attendance;
• Whether the organization maintains a nonpartisan atmosphere on the premises or at the event where the candidate is present; and
• Whether the organization clearly indicates the capacity in which the candidate is appearing and does not mention the individual's political candidacy or the upcoming election in the communications announcing the candidate's attendance at the event."

The complaint against the UCC only addresses some of these factors and does not indicate factors that show the church took steps to ensure the speech was not a campaign event. For example, it says the UCC "selectively provided convention facilities for Sen. Obama to speak in support of his campaign" and "campaign activity occurred in connection with the speech." It even cites the UCC's disclaimer of any endorsement as an indication of partisanship, saying the UCC "referenced his candidacy" before the speech.

What Next

On Feb. 27, the UCC announced a legal fund to help defray the costs of the investigation, so that "money given for mission will not be needed to pay legal bills, instead of ministry needs." By March 3, a new UCC announcement said that that former Solicitor General Seth Waxman, now with the firm WilmerHale, will lead their legal defense and waive hourly fees. The legal fund had already raised $59,564, which the UCC said should be enough to cover other expenses relating to their defense. As a result, the fundraising effort has been suspended.