Behind the RPAC Curtain

Members of the NC Association of Realtors who make a contribution to the Realtors Political Action Committee [RPAC] are actually making contributions to two PACs. 70% of the contribution goes to the state PAC known as the NC Realtors PAC and 30% goes to the national PAC known as RPAC.

Find out more about RPAC in its own words by reading the RPAC FAQ for Federal Political Coordinators or a detailed Powerpoint presentation on RPAC Administration or a handy list of Acronyms & Terminology Commonly used in Government Affairs which includes items like these:

NAR’s RPAC Major Donor Levels (per year)
Golden R Member: $ 5,000
Crystal R Member: $ 2,500
Sterling R Member: $1,000
Hall of Fame: $25,000 in aggregate contributions to RPAC
President’s Circle: Individual direct contribution program where $2,000 is given directly to NAR designated congressional candidates from Major Donors.

That's what is known as bundling and explains how NAR and NCAR could claim credit for contributions in support of Richard Burr beyond expenditures shown in federal reports to the Federal Election Commission and the Internal Rrevenue Service.

To join the program, you must contribute a total of $2,000 in personal contributions, in addition to your RPAC contribution, each calendar year. You must be a RPAC Major Donor of Golden, Crystal, or Sterling R level to participate. President's Circle members receive bipartisan requests throughout the year from NAR to use their funds to make contributions to national political party committees and/or NAR-selected federal candidates.

Realtors Already Forced to Spend on PAC

$196,763.44 has been spent to date by the North Carolina Association of Realtors on administrative support for the NC Realtors PAC since the beginning of 2007 the first period for which the PAC started reporting these amounts to the State Board of Elections. This is not PAC contribution money. This is NCAR member dues spent supporting the PAC and amounts to about $5 per member. From the perspective of election law it is legal for a corporation to make reasonable in-kind contributions to the administration of its own PAC. However, the amount of dues represented by the spending on the PAC is not tax-deductible and I doubt that many members are aware of or approve of this spending from their dues.

Realtor PAC Contributions Decline

While the NC Association of Realtors PAC reported income of $335,000 for the first half of 2008 the number is misleading because NCAR has only recently started including the administrative costs it incurs on behalf of the PAC properly as in-kind contributions. For the first two quarters of 2008 that amount was $41,300 $70,263. When actual contributions are added up the amount for the first half 2008 is only $283,652 which is less than $333,814 for the comparable period in 2007 or $349,700 for the comparable period in 2006. Real NC Realtor PAC contributions peaked in 2006 and have been declining since and, the participation rate is only about 28% among NCAR members. This is one of the reasons why NCAR is now forcing contributions from its members.

NC RPAC Individual Contributions
Period	Half Year	Year Total
2005 S1	$282,621.19
S2	$243,643.29	$526,084.48
2006 S1	$349,699.87
S2	$233,477.41	$583,177.28
2007 S1	$333,814.40
S2	$173,901.66	$507,716.06
2008 S1	$283,652.47

FEC Fined Realtors $78,000 for Burr Campaigning

In a little noticed action in 2007 the National Association of Realtors was fined $78,000 by the Federal Election Commission for violations of election law including $282,500 spent on mailings and advertisements expressly advocating the election of Richard Burr for Senate in 2004. The FEC found that the National Association of Realtors 527 Fund failed to register and file disclosure reports as a Federal political committee and accepted contributions in violation of Federal limits and source prohibitions. In total the NAR 527 Fund spent $2.8 million advocating the election of 9 federal candidates in 2004 including Richard Burr, their favorite son Johnny Isakson, a Georgia realtor, and the disgraced Rick Renzi.

The campaigning for Richard Burr spurred the complaint and subsequent enforcement action. One North Carolina man, Thomas Strini, of Mint Hill, had filed two separate complaints, one in September 2004 attaching a copy of one Burr mailing and another in November attaching copies of five Burr mailings from the National Association of Realtors (NAR), some with the specific authorization of the North Carolina Association of Realtors (NCAR). The enforcement process dragged on for almost three years until June 2007.

Richard Burr’s 2004 campaign for Senate received much support from the National Association of Realtors and the North Carolina Association of Realtors. It was quite overt and drew some media attention at the time but little, if any, follow-up. Since 2004 the realtor association leaders have crowed about their support for Burr and his support for legislation favoring realtors such as a bill to prevent banks from getting into the real estate brokerage business. Burr’s wife is a Winston-Salem realtor. In addition to the NAR 527 Fund spending of $2.8 million, the NAR Political Action Committee, known as RPAC, spent $3.75 million on 2004 federal campaigns and the NAR also boasts to members of bundled individual contributions direct to campaigns. RPAC is consistently a top spender in federal and state campaigns. Anecdotally, NAR and NCAR provided about $1,000,000 in combined support of Richard Burr’s 2004 campaign. RPAC alone spent $578,748.02 in independent expenditures on the Burr campaign.

Political Fundraising is a Drag

Some NC Realtors will do anything for political money and influence. Anything. Check out this NC fundraiser for RPAC, the Realtors Political Action Committee:

Realtors drop Bucks on Bash

The NC Realtors Association dropped a bucket of bucks on a bash for legislators in June according to lobbying reports. $19,820 plus $556 previously spent on invitations works out to $170 a head in legislative lobbying largess. It's more than the $15,809 NC Homebuilders spent on a similar event and, if attendance estimates are actual, less than the $200 per head spent by Homebuilders. Since the start of the year NCAR lobbying reports have declared $51,422 spent on 8 registered lobbyists though only 7 registered lobbyists at any one time.

Disgruntled Realtors Fight Back

Thursday, July 25th, 2008
Audio Report by Chris Fitzsimon [Click here to listen]

SBOE Realtor Complaint

Under the Dome has the scoop at the News & Observer on a complaint by a Realtor about the NC Association of Realtors to the State Board of Elections made in a letter sent Wednesday. The letter makes reference to the deductibility of fees used for political purposes.

Wayne Fulkner, business editor at the Wilmington Star News writes about Realtors raising lobbying funds. Realtors both for and against the transfer tax are not happy with the mandatory dues assessment.

Denise Dakoulis, an agent with Re/Max Coastal in Wilmington, isn't so much concerned with the state association's positions on the issues as the idea that the assessment is mandatory.

Jack Betts of the Charlotte Observer writes at This Old State that Realtors are upset over anti-tax campaign and gives a shout out to Stop The NC Home Ticks.

Big Sister is Watching You

Afraid of NSA's domestic spying sweeping up personal data? You ought to be afraid of NAR sweeping up personal data:
National Association of Realtors advances plan for property database

Meeting in May in Washington, D.C., the National Association of REALTORS® Board of Directors took a major strategic leap authorizing the association to work with a technology company to create a broker-controlled national repository or “library” of property data that would provide members-only access to detailed information on all properties in the United States.
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“We want to…arm our members with the most comprehensive information imaginable, literally for every property in the U.S.

NCAR Using Bootlegged Software?

In response to the recent furor over its mandatory dues assessment for its Issues Mobilization Fund the North Carolina Association of Realtors (NCAR) posted a release today on the NCAR website:
NCAR Leaders Explain Assessment, Dues Increase
The release contained links to two documents in Microsoft Word format:
Issues Mobilization Fund Fact Sheet
Frequently Asked Questions

The file properties for both documents indicate that the Author is Steve Tuttle and that the Company is NCCBI. NCCBI is the acronym for North Carolina Citizens for Business and Industry known since 2007 as the North Carolina Chamber. According to published reports Tuttle left NCCBI in 2005. The file properties also indicate that the software version is Microsoft Word 97-2003 and the title boxes contain the following text:

Contributing to this issue: EDWARD MARTIN, Regional Business Reports (Charlotte); CLINT JOHNSON, Regional Business Reports (Triad); CHARLENE H. NELSON, Regional Business Reports (Hickory); SETH EFFRON, Regional Business Reports (Triangle); LAWRENCE BIVINS

The similar information appears in the file properties of a document on the Union County Home Builders Association website since July 7, 2006, an article by Donald Jud, an NCAR consultant, against impact fees entitled Reject Special New Home Taxes

Edward Martin, an award winning journalist, is a Senior Editor of Business North Carolina, owned by Red Hand Media. Seth Effron is Deputy Press Secretary for Governor Mike Easley. He has a long and distinguished career, having worked at the Fayetteville Times, the Greensboro News & Record, started "The Insider" and ran "State Government Radio" before joining Easley's staff. Why these names, and the other names, are attached to an NCAR document is a wonder. With all their millions you'd think that NCAR could afford some licensed up-to-date software.

MLS v IRS

The NC Association of Realtors may be in violation of IRS rules by failing to notify members that the amounts of annual dues and mandatory assessment going towards the Issues Mobilization Fund, lobbying and other political activities are NOT tax deductible. An email to Raleigh area NCAR members actually claims the opposite:

This assessment has been reduced to $50.00 if paid by September 30th and is $70.00 after that date but is due no later the due date of our regular local and state Board dues by the end of 2008. If we do not pay the assessment, we will be subject to losing our membership in NCAR and NAR and therefore our local Board and TMLS. This assessment is tax deductible as a business expense as it is not an RPAC contribution but a dues assessment. Our 2009 dues will also increase by $25.00 for our January billing.

[Emphasis added.]

NCAR is a 501(c)(6) organization. From the IRS:
Political Campaign and Lobbying Activities of IRC 501(c)(4), (c)(5), and (c)(6) Organizations
Page 6 of the PDF (or L-4 in the document) is pretty clear about non-deductibility.

Dues or contributions to IRC 501(c)(4), (c)(5), and (c)(6) organizations may be deductible as business expenses under IRC 162.
Political campaign activity:
• Amounts paid for intervention or participation in any political campaign may not be deducted as a business expense. IRC 162(e)(2)(A).
Lobbying:
• Amounts paid for direct legislative lobbying expenses at the federal and state (but not the local) level may not be deducted as a business expense.
• Grass roots lobbying expenditures also are not deductible.
• Amounts paid for contact with certain federal officials would not be deductible under IRC 162(e).

Amounts paid to an IRC 501(c) organization that are specifically for political campaign activities or lobbying, would not be deductible under IRC 162.

If a substantial part of the activities of the IRC 501(c) organization consists of political campaign activities or lobbying, a deduction under IRC 162 is allowed only for the portion of dues or other payments to the organization that the taxpayer can clearly establish was not for political campaign or lobbying activities. Reg. 1.162-20(c)(3).

NCAR Foreclosing on Members?

This story has grown legs and is running, not walking. Update: stories being added as the appear online.

The News & Observer:
Realtors upset over paying for lobbying
The News & Observer: Print Edition Update:
Tax fight strains Realtors group
Associated Press:
NC Realtors demand more dues from members
Associated Press: Extended article:
NC Realtors demand more dues from members
Winston-Salem Journal:
Realtors association wants to raise dues
WUNC Isaac Hunter's Tavern:
De-listed?
Wilmington Star:
Realtors mobilize with special assessment
Independent Weekly:
Realtors rankled over political spending

What's it all about? Get it straight from the horse's mouth. This is material being circulated by NCAR about the special assessment to unhappy members:
NCAR Assessment FAQ
NCAR Assessment Actions by the NCAR Board of Directors
NCAR Dues Assessment Letter to Members
NCAR Dues Assessment Press Release

Then read the livid comments by members at:
NCAR Exposed, It's Members Rally to Stop Assessment

Realtors Balk at Funding Fight

WRAL TV News: Realtors balk at funding transfer tax fight

Realtors Ticked Off by NCAR

It's not just us. Even realtors are mad at the NC Association of Realtors for its political swagger.

North Carolina Agents get "hosed" by the NCAR

This is a developing story that hasn't even begun to hit the fan. Stay tuned. There's lot's of information to share. What's all the fuss? NCAR spent too much attacking local governments and state legislators. Now its lobbying leaders want to be bailed out by realtor members.

Builders drop Bucks on Bash

NC Home Builders dropped a bucket of bucks on a bash for legislators in June according to lobbying reports. $15,808 works out to $200 a head in lobbying largess.