A political action group opposing Portland Mayor Ethan Strimling’s re-election has removed an online video featuring the head of the state’s largest nonprofit affordable housing organization, after the ad was criticized as a potential violation of federal tax laws.
Unite Portland posted a video to Facebook on Monday featuring Dana Totman, president and CEO of Avesta Housing, a 501(c)(3) tax-exempt nonprofit that is prohibited under federal law from participating in campaigns for or against people seeking elective office. Unite Portland, which was officially formed to oppose Strimling but not support any one candidate, has produced three other videos, including one that features former city councilors Jon Hinck and Dory Waxman, who also represents Unite Portland.
Dana Totman, president and CEO of Avesta Housing Press Herald file photo
The minute-long ad, which was no longer accessible Wednesday, featured Totman speaking directly into a camera, with additional footage of him walking into what appears to be Avesta’s Portland offices and shots of him working at a computer in an office.
“I’m the president and CEO of Avesta Housing,” Totman said. “And I have been spending the better part of my life creating affordable housing for people in need. So I know firsthand that Portland’s housing market is in crisis.”
Totman’s comments focus exclusively on the housing shortage in Portland and the need for the city to band together to solve it. He does not name any candidates or make explicit statements for or against any of the four people in the race. But he does call for a “fresh approach.”
“Our mayor, our business community, our councilors, our administration and our activists must unite together to do better,” he says at the end. “We need to stand together as a city to keep the pressure on in Augusta and in Washington. We’re not going to fix this problem through conflict or fighting. We need a fresh approach to create the affordable housing that this city so desperately needs.”
Avesta Housing took in nearly $9.3 million in revenue in 2017 and had nearly $41.2 million worth of assets, according to its most recent tax filing. The nonprofit has helped create three housing projects for chronically homeless men and women in Portland, and it regularly receives subsidies in the form of affordable housing tax breaks and local housing trust funds from the city. For example, Avesta received over $380,000 in city funding to build the 37-unit Oak Street Lofts, and received affordable housing tax breaks for the development of the 60-unit Pearl Place I and 57-unit 409 Cumberland projects, according to the city.
Shortly after the video featuring Totman was posted, it was declared illegal on social media by Steven Biel, the president and founder of Progressive Portland, a nonprofit that has endorsed Strimling for mayor and has helped him raise money.
Progressive Portland is also a tax-exempt nonprofit but is registered as a 501(c)(4) organization, which applies to social welfare organizations and provides more freedom to participate in political issues and elections. Nonprofits registered as 501(c)(3) groups are typically charitable organizations and cannot engage in political activity.
In an email to a reporter, Biel, who describes himself as a supporter of Avesta, called it a “flagrant” violation of the tax law and he publicly urged the PAC to remove the video.
“501(c)(3)s can’t touch elections with a 10-foot pole,” Biel posted on Twitter. “The reason this isn’t more well known is because 501(c)(3)s are almost never so recklessly arrogant as to test the line.”
According to Internal Revenue Service guidelines posted online, 501c(3) organizations like Avesta Housing are “absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective office.” However, nonprofits can participate in voter education as long as it’s done in a nonpartisan manner.
In an email Wednesday, Totman defended his participation in the ad as appropriate, saying he was simply advocating for more affordable housing. He said he asked that the ad be removed because of harassment.
“As a longtime affordable housing advocate, I present on the matter and discuss the challenges and opportunities in housing on a daily basis and will continue to take opportunities to share this message far and wide,” he wrote. “Avesta Housing takes no position on political candidates, nor was the use of this video on a Facebook page meant to imply an endorsement of any kind. The video contained the message of a housing advocate imploring leaders in Maine to do more for people in need of affordable housing.
“While I believe that the message in the video is appropriate, I have asked Unite Portland to remove it for now because of the harassment I have received from a community member in response to my message,” Totman wrote.
Leonard Cole, a Cape Elizabeth attorney who specializes in nonprofit organizations, said Wednesday that he would need to conduct further research before determining whether there was a violation. But he said he would be “very concerned” about the ad, given that the video says it was paid for by the PAC.
Cole noted that Totman’s comments are about housing, not a political candidate. And it’s not clear whether Totman was exercising his First Amendment rights to free speech, or if he was speaking on behalf of the nonprofit organization he works for.
“It’s ambiguous as to whether he was speaking on behalf of Avesta Housing or speaking in his personal capacity,” Cole said. “That’s what it hinges on.”
Violations of the tax law can cause a nonprofit to lose its tax-exempt status and possible pay back taxes, according to the IRS guidelines.
However, even if it was determined to be a violation, Cole said he wouldn’t expect any enforcement action from the IRS. He noted that some churches across the U.S. designate a Sunday service to speak in support of or opposition to political candidates. “You don’t see churches losing their tax-exempt status,” he said.
Waxman, who leads Unite Portland, said Wednesday that she was not aware the ad had been removed. She said she would need to speak with the campaign’s social media coordinator to figure out why.
Waxman stressed that Totman was speaking as an individual, not on behalf of the organization.
“He’s a concerned person in Portland who is concerned about housing,” Waxman said. “His voice is important.”
It’s currently unclear who is funding Unite Portland. Waxman has said that information will be disclosed on the quarterly campaign finance report that will be filed at City Hall on Oct. 7.
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