Associated Press -- Group Says Teachers Union Avoided Taxes

9/4/2003 - The Associated Press broke the story of Landmark's criminal complaints to the IRS and the Justice Department over the unreported political activities of the National Education Association (NEA).

WASHINGTON - A conservative law firm Thursday asked the government for a criminal investigation of the largest teachers union to determine whether the organization evaded paying taxes on money spent for political activities.

Landmark Legal Foundation said it reviewed thousands of pages of National Education Association records documenting political activities that should have triggered tax payments.

The complaints to the Internal Revenue Service and Justice Department alleged the union spent tens of millions of dollars, from member tax-exempt dues, on political expenditures and other activities that were not reported as required.

Richard Wilkof, an NEA attorney, said, "In the past, what Landmark has done is make gross representations of fact and lifted statements badly out of context. We feel there was nothing wrong with our activities in the past and we continue to feel that way."

Landmark, in 2000, sought an IRS audit of the tax-exempt union but Wilkof said none was conducted.

Mark Levin, president of the Herndon, Va., law firm, said, "The complaints we filed today show, in meticulous detail, how the nation's largest, most powerful and most political union has flagrantly ignored its tax obligations."

Under the tax code, unions cannot use dues money to influence the election or defeat of any candidate. Contributions to candidates and parties are supposed to be made by separate political action committees.

The complaints quoted from a newspaper article this year that said Randall J. Moody, the NEA's federal policy manager, told political workshops at the union's 2003 convention: "Politics move our policy. We work through UniServ."

UniServ is NEA's network of representatives who provide services to the local affiliates. Wilkof denied Landmark's contention that UniServ is really a network of political operatives, and said that Moody denies making the comment about UniServ.

Patti Reid, a spokeswoman for the IRS criminal division, said she could not comment on the complaint.