Miller's Self-Dealing At Advance America Escalates

POCKETS QUARTER-MILLION DOLLARS

An analysis of the latest tax return available for Advance America uncovers more self-dealing by the founder of the "nonprofit" to the tune of nearly $250,000. The organization's 2005 Form 990 tax return reveals Eric Miller received a compensation package worth $106,546, while the organization paid another $134,800 to Miller's law firm, Miller Waters Martin & Hall, for legal services. The quarter-million dollars paid directly to Miller or his law firm represented more than one-third of the nonprofit's expenditures for the year. But the self-dealing doesn't end there.

Miller's law firm continues to share office space with Advance America. According to the nonprofit's tax returns, Miller's law firm paid rent for the space between January 1, 2005 and March 31, 2005 only. Advance America leased the space the remaining 9 months of the year at a cost of nearly $58,000. In an unusual arrangement, the tax return discloses that the organization's employee services are sometimes shared with Miller's law firm. We are assured the firm reimburses the organization for those expenses. The return also assures us the organization is reimbursed for expenses the law firm incurs during the 9 months of the year it is paying the rent. However, the return did not denote any sums the organization derived from reimbursed expenses during the year.

Miller and his law firm may benefit further at the expense of the organization. Advance America, for example, shelled out nearly $10,000 in 2005 for employee parking, even though the staff size for the organization is very small. This raises an issue of whether Advance America is paying the parking expenses of the employees of Miller's law firm. The organization also paid out over $6,000 in automobile expenses. The tax returns show that the organization paid another $44,000 in undisclosed consulting fees.

As AI has detailed the activities of Advance America in the past, it has two primary purposes. It lobbies the Indiana legislature on a variety of social issues and some tax issues. As the organization describes it: "Matters relating to issues which affect all rights guaranteed by the Constitution to families, individuals, churches, and any of their related matters." It also compiles legislative voting records and voter guides based upon the narrow issues upon which the group focuses and distributes these to hundreds of thousands of Indiana voters every two years in an effort to influence the outcome of the election. I challenge anyone to come forward with any legitimate nonprofit purpose Advance America fulfills, which begs the question of why isn't anyone doing anything about this blatant abuse of our nonprofit tax laws.

While Miller will send out e-mail alerts soliciting tax-deductible contributions from his supporters throughout each legislative session, advertising the fact his organization will spend over $160,000 in lobbying expenditures, Advance America reports but a small fraction of that figure as lobbying expenses. In 2005, the group claimed lobbying expenditures of just $33,170, including $16,742 in grassroots lobbying expenses and $16,427 in direct lobbying expenses. According to reports Advance America filed with the Indiana Lobby Registration Commission in 2005, it expended only $28,000 for lobbying.

State legislative efforts which would force public advocacy groups like Advance America to report all of its lobbying expenditures, including those he attributes to grassroots lobbying, have been fiercely opposed by Miller and his organization. This is how Miller mischaracterized the legislation in a recent legislative update to his supporters:

Bills would make it against the law for anyone including a church or private citizen to spend $500 to “inform the general public” about an issue or “urge the general public to take any action” concerning a legislative issue unless they register with the state as a lobbyist! This means a pastor and church would be breaking the law if they spoke out on abortion, homosexuality, gambling, or some other Biblical issue in the church or in the community; or urged people to contact their Representative or Senator and someone accused them of spending over $500. This could include staff time, cost of any publication or information distributed in the church. The Legislature should not be passing bills that interfere with the right of a pastor and church to speak out on Biblical issues; or the right of an individual to speak out publicly on an issue important to them, or to urge individuals to contact their legislators.

Miller craftily twisted the bill's true target--Advance America--and made it appear that it would unduly burden churches. Churches are granted tax-exempt status as religious organizations. While they can lobby the legislature, like other nonprofit organizations, they must do so within federal IRS guidelines. If churches and other nonprofit organizations are diverting tax-exempt contributions to lobby our legislature rather than use them for religious purposes, the public has a right to know how much money is being spent to influence government decision-makers. In Advance America's case, it is clear the organization is spending far more of its annual revenues on lobbying than what either its tax returns or lobbying reports reveal. Any effort to report more of those expenditures could jeopardize Advance America's tax-exempt status, as well it should. Miller's opposition to the legislation is nothing more than an effort to hide the extent of his public influence peddling for his favorite social causes.

So who contributes to Advance America? That's a good question. IRS rules do not require nonprofit organizations like Miller's to identify their contributors. The tax return tells us that a single contributor kicked in nearly 20% of the organization's total revenues for 2005 with a $137,000 contribution. It gathered more than 60% of its revenues from a couple of dozen contributors. One gave $40,000, another contributed $33,000 and at least 13 contributors donated $5,000. A look at the contributors to Miller's unsuccessful 2004 GOP gubernatorial bid may shed light on who some of those people are. RV magnate Mahlon Miller, for example, contributed more than a half-million dollars to Miller's campaign, which represented over 60% of the total funds he raised during his campaign. Miller returned the favor by lobbying for a tax break for the RV industry last year.

If you would like to review AI's analysis of Advance America's 2004 tax return, please click here.