Ever since Ralph Nader announced his independent candidacy for president last month, both friends and critics have wondered why he is running -- and where the great gadfly will obtain the enormous resources needed for a national campaign. Already there is evidence that his organization may be cutting financial corners and skirting the dubious edge of federal election and tax laws.
The Nader 2004 campaign is presently headquartered at 1400 16th Street in Washington -- a modern, downtown office building where it shares a suite with an outfit called Citizen Works. That group describes itself as "a nonprofit, nonpartisan, 501(c)(3) tax-exempt organization founded by Ralph Nader in April 2001 to advance justice by strengthening citizen participation in power."
In other words, his presidential campaign is occupying the same premises as one of his nonprofit groups. Finding the Nader campaign office isn't easy, although campaigns usually seek to encourage easy access for volunteers and journalists. While the campaign quickly put up an official Web site, it lists no telephone number and no street address for the national headquarters. Only a post office box and an e-mail address are posted on the site. (By contrast, telephone numbers and addresses are easily found on John Kerry's Web site.) Reached at the unpublished telephone number for the Nader presidential headquarters, a campaign worker said the campaign is located in the same offices as Citizen Works.
Sharing space with Citizen Works must be a convenient arrangement for Theresa Amato, the campaign manager of Nader 2004. Having assumed command of Nader's presidential bid -- just as she did four years ago -- Amato is now listed as "on leave" from her position as president of Citizen Works, which she helped to found three years ago. Nader himself is both the founder and a donor to Citizen Works.
As a relatively new entity in the Nader public-interest conglomerate, Citizen Works is not to be confused with Public Citizen, the famous advocacy institution that Nader founded in 1971. Long headed by his associate Joan Claybrook, Public Citizen has seen its funding drop precipitously in recent years due to public anger about Nader's role in the 2000 presidential election -- although he hasn't held any official role at Public Citizen since 1980. Like many former Nader allies, Public Citizen's leaders have privately pleaded with him to give up his presidential pretensions.
Lee Drutman, the communications director of Citizen Works, seemed surprised that anyone knew about the shared office space. "Well, where did you get that information?" he asked. "Officially, I have no comment on that."
Theresa Amato insists that the explanation is simple, straightforward and perfectly legal: "We're a subletter -- we're one of many subletters from Citizen Works." She said that Nader's exploratory committee began to sublet space from Citizen Works last October. "We didn't know we were having a campaign until Ralph announced," said Amato. She also said that the rental agreement is for "fair market value," and that it was approved by the Citizen Works board as well as the building's landlord. But the campaign is currently looking for space elsewhere, she noted.
Is the presence of Nader's fledgling campaign in the offices of his tax-exempt nonprofit a possible violation of federal tax laws? The Internal Revenue Service provides bluntly worded guidelines on the proper political conduct of tax-exempt organizations such as Citizen Works: "Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office ... Violation of this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise tax."
Public-interest and good-government groups like those long associated with Nader tend to take a dim view of groups that blur those guidelines. Last year, for example, Public Citizen joined in an amicus brief filed with the U.S. Supreme Court by Common Cause, the Center for Responsive Politics and several other organizations, in a case captioned FEC vs. Beaumont. They urged the high court to overturn an appeals court ruling that would permit nonprofit corporations to make contributions to candidates for federal office. The brief warned that any relaxation in those rules will "undermine the effectiveness of campaign contribution limits and will open yet another loophole for special interest money to distort the electoral process."
Charles Lewis, executive director of the Center for Public Integrity and author of "The Buying of the President 2004," notes that presidential candidates have frequently used "nonprofit incubators where they do their planning, as places to perch before they begin a campaign." As Lewis noted, such relationships can easily cross lines of legality and propriety -- as has been alleged most recently against Al Sharpton, who is accused of misusing his nonprofit National Action Network for prohibited political purposes.
"It's not appropriate for a 501(c)(3) operation to be warehousing a presidential candidacy," said Lewis. "If there's an arms-length transaction -- meaning a payment process and a lease that actually exists -- then perhaps it is legal. But whether it's legal or not legal, it looks questionable, particularly for a candidate and a group devoted to good government. It's questionable at best. You know, it's the old 'I Love Lucy' line: They've got some explaining to do."