FAMILY COALITION

The Family Coalition (FC) is Richard Bermans most mysterious group, and appears to exist solely to funnel money to other Berman nonprofits. The only activities FC has reported to the Internal Revenue Service in its past three years of filings are grants to Bermans Enterprise Freedom Action Committee (EFAC) and Employment Policies Institute (EmPI). These grants were meant to support anti-health care reform efforts. FC was incorporated as 501(c)6 organization, a trade association, in 2001. FC claims in its recent tax filings that the groups purpose is direct and indirect advocacy regarding family consumer issues.1 The only way it appears to participate in such advocacy, however, is by directing large grants to other nonprofit organizations run by Berman. In its 2009 and 2010 tax filings, FC told the IRS it had received all of its contributions from a single donor, though it isnt known whether the money came from the same donor both years.2 Berman serves as president and executive director of FC.3 FC was essentially inactive in 2011, but in 2010, FC paid Berman and Company, Inc. (BCI) $118,000, an amount equal to 6.4 percent of FCs expenses that year.4 In 2009, FC directed $2 million to EFAC. On its 2009 tax return form, the only activity FC described itself as pursuing was participating in the health care debate because it affected the choices available to employees and their families.5 To accomplish this goal, FC said its board had elected to contribute a grant to an organization already active in the health care debate, the Enterprise Freedom Action Committee. The grant was said to support the production and distribution of advocacy materials relating to health care legislation. FC donated to EFAC in two separate $1 million grants in December 2009. The two grants accounted for 99.73% of the expenses FC reported that year.6 In 2010, FC directed $500,000 to EFAC and $1.24 million to EmPI. In its 2010 tax filing, FC said that it continued efforts to engage in the healthcare debate as relates to choices available to employees and their families.7 The organization said it participated via grants to organizations already active in the healthcare debate, the Enterprise Freedom Coalition and Employment Policies Institute Foundation. On the same day in July 2010, FC directed $500,000 grants to EFAC and EmPI. In early November 2010, FC directed over $740,000 to EmPI. The three grants accounted for 93.5 percent of the expenses FC reported that year.8 A previous version of FC was cited as proof Bermans non-profits serve a for-profit purpose. In documents filed with the IRS in 2005, FC wrote that it had previously been named both the Consumer Freedom Coalition (CFC) and the Family Entertainment Coalition.9 Bermans Center for Consumer Freedom (CCF) told the IRS in 2003 that CFC was a related

1 2

Family Coalition, IRS Form 990, Initial Return 2010, filed November 10, 2011. Family Coalition, IRS Form 990, Initial Return 2009, filed November 11, 2010; Family Coalition, IRS Form 990, Initial Return 2010, filed November 10, 2011. 3 Family Coalition, IRS Form 990, Initial Return 2011, filed November 12, 2012 4 Id; Family Coalition, IRS Form 990, Initial Return 2010, filed November 10, 2011. 5 Family Coalition, IRS Form 990, Initial Return 2009, filed November 11, 2010. 6 Id. 7 Family Coalition, IRS Form 990, Initial Return 2010, filed November 10, 2011. 8 Id. 9 Family Coalition, IRS Form 990-EZ, Initial Return 2004, filed August 15, 2004.

organization and CCF directs CFCs mission at the public level.10 In 2004, Citizens for Responsibility and Ethics in Washington (CREW) filed an IRS complaint against CCF arguing, among other things, that CCF engaged in substantial non-exempt activities.11 In the IRS complaint, CREW noted that CFC is a trade association and pointed to CCFs direction of CFCs mission as CCFs most telling admission of its for-profit purpose because by definition, a trade association exists to benefit the interests of a particular industry.12

10 11

Center for Consumer Freedom, IRS Form 990, Initial Return 2002, filed November 20, 2003. Complaint filed with the Internal Revenue Service by Citizens for Responsibility and Ethics in Washington against the Center for Consumer Freedom, November 16, 2004 (CREW IRS Complaint), available at http://www.citizensforethics.org/page/-/PDFs/Legal/Letters/IRS/2004-1116%20CREW%20CCF%20IRS%20complaint.pdf?nocdn=1. 12 Id., at 19.