Louisiana Family Forum Isn’t A Charity; It’s A Tax Shelter For The State’s Most Powerful Lobbyist

The Louisiana Family Forum is the most powerful and successful lobbying organization in a state brimming with lobbyists and special interests, and Gene Mills, its President, is arguably Louisiana’s single most powerful registered lobbyist.

Mills would likely not dispute this characterization. In a recent video statement to supporters, he claimed that 2014 was his organization’s most successful year ever, boasting that, during a debate about a bill pertaining to surrogacy, he presented the bill’s author with a list of “non-negotiable” demands that “were required in order for his bill to move forward.”

“The author,” Mills said, “blocked nine of those ten repairs and found out that when the LFF says, ‘It’s not negotiable, well, it’s not negotiable.'”

“LFF blocked bad bills, advanced good ones, and amended dozens of others to remove their threats,” Mills said. (emphasis added).

Even though he has never been elected to public office, Mills talks like someone who believes he controls the legislature, someone who thinks he possesses the same type of veto authority as the Governor, and it’s not puffery: He does.  

Every year, Mills releases a “legislative scorecard,” ranking legislators based on their support for his agenda. Those who support him the most are awarded with trophies at a lavish annual banquet attended by the Governor and members of the media. He published this year’s scorecard a few days ago.

This year, the top prizes went to legislators who voted against taking billions in already available federal funds to expand Medicaid for hundreds of thousands of uninsured Louisiana families; supported a law allowing the “open carry” of guns in bars; opposed protections for gay and lesbian citizens in workplace and housing discrimination cases; rejected the repeal of an unconstitutional, dead letter statute mandating the teaching of creationism in the pubic school (not to be confused with the LSEA, this law was actually already struck down by the United States Supreme Court nearly 30 years ago); and agreed to prohibit the sale of alcoholic ice cream, among other things. 

Because that, to Gene Mills and the Louisiana Family Forum, is the proper litmus test for an “outstanding family advocate.”      

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I’ve written this story before, once in 2011 and again in 2012, but after Mills’s banner year, I thought it’d be appropriate to return to the topic.

You see, the Louisiana Family Forum may be led by a lobbyist and it may be commonly thought of as a lobbying organization, but for the purposes of the Internal Revenue Service, it is actually a tax-exempt, tax-deductible, 501(c)(3) “educational” charity. The Louisiana Family Forum doesn’t pay taxes, and if you donate to them, you can take a cut from your taxes as well. 

However, because 501(c)(3) organizations are severely limited in the amount of lobbying activities they can conduct, a few years ago, Gene Mills formed another organization, a 501(c)(4) called Louisiana Family Forum Action. It may sound technical and confusing, but it’s actually pretty simple: 501(c)(3) organizations, named after the chapter in the tax code, are what most of us understand as charities. They go out in the world and do good things: They feed the hungry, care for the sick, provide resources for people victimized by disaster or violence, and research cures for diseases, among other things.

In exchange for this, not only do we exempt these organizations from paying taxes, we also incentivize donations by making them tax-deductible. 501(c)(3) organizations are supposed to provide a charity, and no matter how ignorant some of our lawmakers may be, “educating lawmakers” isn’t the proper mission of what most of us would consider to be a real charity. Instead, that’s just the definition of “lobbying.” 

But we also recognize that not all lobbyists are created equal: Some lobby for legislation that lines the pockets of their clients, and others lobby for legislation related to social welfare and justice, religious freedom, and equal rights. And that’s why the tax code allows social welfare organizations to incorporate under 501(c)(4). 501(c)(4) organizations are also tax-exempt. However, unlike traditional charities, they are allowed to engage in lobbying, and, to a certain extent, they are even allowed to endorse candidates, provided that their campaign activities are related to their “exempt” purpose. But there’s another important distinction between 501(c)(3) organizations, like the Louisiana Family Forum, and 501(c)(4) organizations, like the Louisiana Family Forum Action: Donations for lobbying, campaigning, electioneering, and influencing legislation are not tax-deductible.

The reason for this is very simple: We want to incentivize and encourage donations to legitimate charities that provide services to the public, but we do not want to create a system by which wealthy donors can receive tax deductions for influencing legislation, no matter how meritorious that legislation may be.

Suffice it to say, it is significantly easier for a tax-deductible organization to attract donations. Just ask Gene Mills and the Louisiana Family Forum. 

Throughout the last several years, the Louisiana Family Forum has quietly funneled hundreds of thousands of dollars in tax-deductible donations to prop up its lobbying arm, the Louisiana Family Forum Action, packaging the exchanges as “grants.”

Consider this from 2011:

As an example, according to the Louisiana Family Forum Action’s 990 reports from 2011, the organization spent $190,983 on educational programing and lobbying. 

Where did it receive that funding? Well, the report doesn’t say. However, it does provide a line item for program revenue:

This is from Louisiana Family Forum’s 990 report that same year:

It’s not mentioned on the LFFA’s 990 reports, but it is as clear as day here on the LFF’s report: $151,616 of the $151,617 (99.9%) of the action organization’s program revenue came directly from moving tax-deductible donations collected by the LFF into its coffers. 

This is not a minor issue. It strongly suggests that, without the incentive of a tax deduction, the state’s most powerful lobbyist would struggle to fund his own salary and his organization’s operations.

There is a reason to believe that Mills is no longer attempting to pretend as if he can continue this charade. In his most recent filing from 2012, he discloses that Louisiana Family Forum Action is basically dormant: 

And this, in many ways, is even more of a cause for concern, because it suggests that Mills is, once again, housing all of his lobbying activities under the umbrella and auspices of a 501(c)(3). Again, you just can’t do that. (It also shows how dependent the Louisiana Family Forum truly is on tax-deductible donations. The LFFA, after all, was only able to attract $2,600 in donations in all of 2012). 

As of 2012, despite all of the evidence to the contrary, the Louisiana Family Forum reported to the IRS that the vast and overwhelming majority of its work is related to “abstinence” education. 

It’s a joke. If 80% of the organization’s work was about promoting sexual abstinence education, why would their homepage look like this?

In fact, the word “abstinence” doesn’t appear at all on their website, only on the forms they submitted to the IRS.

A couple of weeks ago, I met Harvard Law Professor Lawrence Lessig, a man generally considered to be the nation’s leading expert in campaign corruption, and I told him about what I had uncovered about the Louisiana Family Forum’s accounting gimmicks. Professor Lessig wrote an entire book about the ways in which money, particularly corporate money, has sullied and poisoned American elections and the legislative process. A few days after I met him, he plugged my research on Twitter, with a hashtag that echoes, almost exactly, what he said to me in person:

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To some, it may seem ironic that an organization ostensibly dedicated to promoting “Judeo-Christian family values” would ever abuse the tax code, but the evidence should seem obvious enough to those who care to look at it. After all, other than lobby the legislature, grade lawmakers, and throw an annual awards banquet, what- exactly- does Gene Mills do that could even remotely qualify as “charity”? Even if you support and endorse his entire agenda, you have to admit: The Louisiana Family Forum functionally operates as a lobbying organization; it’s definitely not an educational non-profit, and it’d be generous to consider them a legitimate “social welfare” organization.

It’s a tax shelter. And it just celebrated its most successful year in company history.