This story has been updated.
When Jecorey Arthur announced his candidacy for Louisville Metro Council in early December, Simmons College of Kentucky was behind him in more ways than one. The nonprofit Bible college’s logo filled the backdrop where he stood, and the school also supported the campaign by reaching out to media and streaming the event live on its Facebook page.
After the announcement, Arthur posed for photographs with Kevin Cosby, the school’s influential president and senior pastor of St. Stephen Baptist Church. In the photos, sent to media by the college’s public relations director, Cosby smiles brightly with an arm around the candidate’s shoulder.
But experts say their relationship, in the context of Arthur’s political campaign, could run afoul of tax and campaign finance laws. Internal Revenue Service rules prevent religious organizations such as Simmons, which is affiliated with St. Stephen Baptist Church in Louisville’s California neighborhood, from “intervening” in political campaigns. And Kentucky campaign finance laws prohibit candidates from accepting donations directly from corporations, including nonprofits such as Simmons.
With the campaign announcement, Simmons appeared to provide in-kind support to Arthur, a Democrat running to represent District 4. Arthur, who teaches percussion at the college, is also the music education manager at WUOL, which like WFPL is part of Louisville Public Media.
Arthur declined to speak with WFPL and did not respond to questions provided by email.
Other candidates in the crowded District 4 race have noticed Simmons' support of Arthur. Aletha Fields, a teacher and Democratic candidate, said she felt it was unfair that all candidates didn’t have the opportunity to receive support from one of the state’s two historically-black colleges.
“The value is that Simmons can open doors for people and make accessible full community support,” Fields said.
Simmons’ alleged contributions took several forms.
Its public relations director sent out at least three press releases using her college email address alerting media to Arthur’s campaign announcement. The school provided the venue and some of the equipment for that announcement. It livestreamed the event on its Facebook page and promoted Arthur as a candidate both there and on Twitter.
Experts interviewed by WFPL agreed all of those actions amount to in-kind donations.
Jennifer Bird-Pollan, a tax law professor at the University of Kentucky, said the donations were inappropriate because of Simmons’ nonprofit status.
“All of it is prohibited,” she said. “Whether you disclose it or not, it's prohibited.”
Arthur did not disclose those donations to the Kentucky Registry of Election Finance. The deadline for filing a report for the fourth quarter of 2019 was Jan. 8.
A lawyer for Simmons, Chris Sanders, said the private college’s Administration Building is generally available for free for public announcements and he denied providing anything to Arthur.
“We don’t endorse candidates, and we don’t provide campaign support,” Sanders wrote in an email. “We haven’t made a financial contribution to [Arthur’s] campaign. We also haven’t provided him property use, staff time, equipment use, or any other in-kind support.”
Sanders did not specifically respond to detailed questions from WFPL, including inquiries about whether Arthur paid for the services used for his campaign announcement.
Simmons did not make President Kevin Cosby available for comment.
IRS Violations
Three experts contacted by WFPL said Simmons’ apparent support of Arthur could technically put its tax-exempt status at risk, but this is unlikely because the IRS does not typically take action on these types of infractions.
Marc Owens, former director of the exempt organizations department at the IRS, explained how he would assess the appropriateness of Simmons’ actions. For example, he said he might look more into the photographs of Arthur and Cosby, which could give the impression of the college president endorsing a specific candidate. This would be allowed if Cosby were acting privately. But the photographs in question were taken on Simmons campus and distributed by a college employee highlighting Cosby’s role as the school’s president — a role in which he is not allowed to endorse anyone.
“The question is, are there photographs of the same person with his arm around other candidates or not? You know, I mean, is that the way they deal with candidates?” Owens said.
WFPL has not found any such photos with the other six candidates for District 4. Five of them reached by WFPL said they had not been invited to speak at Simmons, nor offered any services Simmons gave Arthur: public relations, facilities or promotion.
There are six other candidates for District 4, all Democrats: Adam Caperton, Aletha Fields, Darryl Young Jr., Dennisha Rivers, Robert LeVertis Bell and Ron Bolton. The primary election will be on May 19, 2020.
District 4 encompasses Louisville’s central business district as well as parts of the Russell and California neighborhoods, which are predominantly black and low-income. Simmons and St. Stephen are in District 6.
Bell, who was recently endorsed by the Louisville chapter of the Democratic Socialists of America, was not surprised by Cosby’s endorsement. He said Cosby has a significant interest in that district in particular.
“As a political player in the city, whether he’s a church leader or a Bible college leader, it’s very important to him to have a stake in the government,” he said. “It makes all the sense in the world.”
Former IRS official Marc Owens described Simmons’ efforts for Arthur as “extraordinary.” He said this type of behavior is not what usually happens when a school or religious organization is trying to introduce all qualified candidates to its members.
“It's almost human nature, if someone is affiliated or friendly with you, to say nice things about them or to, you know, do something helpful for them,” he said. “The problem is that Congress has written a law and that law says that should not happen, at least as far as elections go.”
The Internal Revenue Code strictly prohibits tax-exempt nonprofits from engaging in political campaign activity, a category that includes offenses ranging from endorsing candidates to donating to their campaigns.
Bird-Pollan of the University of Kentucky said Simmons’ categorization with the IRS as a religious organization gives it more cover from enforcement than it would have if it were registered as a university.
While religious organizations aren’t banned from engaging in political speech — for example, saying they oppose abortion — there is a “blanket prohibition” on churches or universities endorsing specific candidates or parties.
Both Arthur and Cosby are members of the American Descendants of Slavery, or ADOS, movement, which Arthur is using as his political platform. Simmons plans to launch an ADOS Center in the near future.
Unlike schools, Bird-Pollan said some churches intentionally engage in “explicit political activity.”
“It's a little bit of, like, a challenge to the IRS, like, go ahead, come on ... and tell us we can't do this,” she said.
Bird-Pollan said many believe churches and religious organizations could successfully challenge the political intervention rule at the Supreme Court by arguing it is a form of religious expression.
“So rather than challenge the organizations that are engaged in the behavior, (the) government’s sort of looking the other way,” she said.
That means Simmons isn’t likely to be penalized, even though Bird-Pollan said she thinks the school is clearly violating the law.
Chip Watkins, a tax lawyer based in Washington, D.C., said it would be difficult to determine the value of the goods and services provided by Simmons.
And he doesn’t think the resource-strapped IRS would take action, especially considering the relatively low value of what was provided. Take, for example, the emails from public relations director Krystal Goodner using her Simmons email address.
“I would have advised against it,” Watkins said. “Because it does, you know, at least raise an inference that the school is somehow supporting his candidacy.”
The IRS says employees or members of 501(c)3 nonprofits are allowed to participate in political campaigns, as long as their actions are not done in an official capacity. That is why experts said Goodner using a school email address, although it may have been outside of normal work hours, and Cosby being photographed embracing the candidate at the school where he is president are questionable acts in this context.
Although supporting a candidate for political office does technically break IRS rules for maintaining tax exempt-status, Watkins said a more likely penalty would be a 10 percent tax on the amount the school spent. In this case, that wouldn’t be much.
While a significant penalty for Simmons under tax laws might be improbable, the risk to candidate Jecorey Arthur of campaign finance violations is higher.
Campaign Finance Violations
Kentucky statute requires campaigns to make detailed reports to the Kentucky Registry of Election Finance regarding “all money, loans, or other things of value, received from any source.” It says incomplete or inaccurate reports could be considered perjury.
“Well, it's really about disclosure,” said John Steffen, the executive director of the Kentucky Registry of Election Finance. “The public has a right to know, you know, who their candidates receive contributions from.”
Campaigns are expected to put a fair-market value on the goods or services they receive. So if a candidate receives the use of space and audio-visual equipment for free, the value of renting those items is how much the donation is worth.
There’s a 30-day period in which candidates can return or pay for improper donations without penalty. In Arthur’s case, that period is over.
Steffen said failing to disclose donations could also have consequences. He declined to comment on Arthur’s campaign specifically.
In general, the Registry has a few options for dealing with mis-reporting. Steffen said his agency can conduct investigations, and refer cases of intentional misconduct to the Attorney General for potential criminal action.
But Steffen said most of the infractions his office sees are mistakes or late filings, in which case civil action by his office is more likely.
If KREF finds a corporation has donated to a political candidate, both the corporation and the campaign could be penalized up to $5,000 apiece. That means if there were a formal complaint about contributions from Simmons to Arthur, that could trigger an investigation leading to penalties for both.
Kentucky law also requires candidates to file a letter of intent before accepting contributions or spending on the campaign. Arthur announced his candidacy with Simmons' help in early December and began soliciting donations online around Jan. 6. He filed a letter of intent with the state on Jan. 8.
Other Risks
Simmons could risk its accreditation if its accrediting body determines the institution broke Kentucky or federal laws.
The school was first accredited by the Association For Biblical Higher Education in 2014. In 2019, the body’s Commission on Accreditation extended its accreditation for one year. That period will expire on Feb. 28. A fact sheet available online indicates that Simmons is in good standing.
A representative for the Association said the organization would not comment on how legal violations might affect Simmons’ accreditation.
According to the Commission’s accreditation standards, institutions must adhere to elements of “institutional integrity,” including “Integrity in financial matters and in compliance with applicable legal and governmental regulations.”
The future of the school’s accreditation and tax-exempt status and of the candidate’s campaign could be clear in the absence of legal intervention by state or federal agencies.
But law professor Bird-Pollan said many questions remain. And the chief one is who is most likely to enforce.
“It does seem like we see more enforcement of election law kinds of things and campaign finance kinds of things than we do of political activity on the part of nonprofits,” she said.
In her view, the party at greatest risk is the candidate who appeared to accept in-kind donations from a nonprofit corporation and failed to disclose them.
Correction: An earlier version of this story stated Arthur used Simmons' sound equipment for his announcement.
Update Saturday 1/18/20 1:00p.m.: In a statement sent to WFPL Friday evening, Arthur said he had asked Simmons to delete the social media posts promoting his campaign, and would update his campaign finance reports by Monday. He also said that he provided the sound equipment for his announcement, and that some of that equipment is owned by Louisville Public Media.
“This race is about the diverse people of this district and the issues they face daily," Arthur wrote. "I have working relationships citywide and my unique experience makes me the most qualified for the task at hand! I look forward to a competitive race!”
In a statement, Louisville Public Media President Stephen George said the company’s policy prohibits the use of LPM equipment for personal matters. “We are investigating Friday’s disclosure by an employee that our equipment was used without our consent and in violation of our policy,” he wrote.
