[*PG733]MORE HONORED IN THE BREACH:A HISTORICAL PERSPECTIVE OF THE PERMEABLE IRS PROHIBITION ON CAMPAIGNING BY CHURCHES
Abstract: Since 1954, there has been a prohibition on certain forms of intervention in political campaigns by entities exempt from taxation under section 501(c)(3) of the Internal Revenue Codeincluding most churches. This Article provides a historical perspective on the genesis of this prohibitionthe 1954 U.S. Senate campaign of its sponsor, Lyndon Baines Johnson, and the involvement of religious entities and other 501(c)(3) organizations in his political campaign. Although Johnson was not opposed to using churches to advance his own political interests, he did seek to prevent ideological, tax-exempt organizations from funding McCarthyite candidates including his opponent in the Democratic primary, Dudley Dougherty. The illumination of these motivations is done through the extensive use of President Johnsons personal papers and provides a more complete understanding of the contours of the prohibition.
Churches are exempt from federal income tax pursuant to the terms of section 501(c)(3) of the Internal Revenue Code, and the regulations promulgated thereunder. The Code provides that such an organization must be organized and operated exclusively for charitable purposes and contains an absolute prohibition specifying that such an organization may not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.1 This Article begins with examples illuminating the current state of affairs and how the prohibition is ignored in spirit and in substance. The Article will then describe the political context for enacting the prohibition in 1954a change that was single-handedly [*PG734]achieved by then Senator Lyndon Baines Johnson. As described in the Article, far from churches playing a significant role in Johnsons decision to enact the prohibition, Johnson himself sought religious alliances in his quest for re-election.2
To consider the current practices of churches in light of the prohibition, it would be helpful to consider how things might be different if the prohibition did not exist. Such a situation might be examined in the hamlet of Eatanswill, the fictional English town created by Charles Dickens in The Pickwick Papers.4 In Eatanswill, the town was ripped asunder by two competing political parties, the Blues and the Buffs, so that there existed, Blue shops and Buff shops, Blue inns and Buff innsthere was a Blue aisle and a Buff aisle in the very church itself.5 Given that churches have historically served as one of the foci of community activity and organization, one might imagine that the churches in Eatanswill engaged in certain political acts without having to worry about being constrained by anything resembling the parameters of the prohibition.
[*PG735] For instance, one Buff pastor thundered at his parish, Dont get the Blues, and warned that if the Blue candidate is elected, then were going to war. The pastor then introduced the out-going Buff prime minister who was campaigning on behalf of his wife, Buffy, a Buff candidate for parliament. From the pulpit, the Buff prime minister warned the congregation, If you want to keep the economy going, you have to vote for Buffy. Buffy herself pleaded to the congregants, I need you to ask people to vote for me. Then, the current cabinet member and Buff candidate for prime minister took the pulpit, after being introduced by the pastor as the next prime minister, and admonished the parishioners, Im asking not only for your votes, but your enthusiasm and dedication, for your willingness to go the extra mile. The service ended with a rousing hymn with the pastor substituting the Blue candidates name for Satan.
The Blue pastors were no less vociferous in denouncing the Buffs and supporting the Blues. One pastor effused, You vote for the Blue of your choice, but warned, Our country is going to pay a dear price if the Buff candidate for prime minister is elected. He then urged his congregants to kneel at bedtime and pray: The Lord is my shepherd, I shall not vote for Buffy. Another pastor, attempting not to be seen as being heavy handed, explained, Im not telling you who to vote for. Im telling you who you may not vote for. In a similar vein, one very prominent traveling minister attempted to strike a more bi-partisan note by explaining that he did not endorse candidates, but that with respect to the Blue candidate, Ive come as close to it, I guess, now as any time in my life because I think its extremely important.
Indeed, the churches of Eatanswill would prove critical to the campaigns, sometimes being the only stops that a candidate would make on the campaign trailand the failure of a candidate to stump from the pulpit would be severely criticized. Further, the churches would be used as a point for organizing campaigns and transporting the voters to the pollssometimes immediately after Sunday services. To assist in the organization efforts, church ministers and pastors would be called to No. 10 Downing Street to meet with the prime minister and coordinate their activities. One such activity involved a group boycott by various ministers of a newspaper that had endorsed the Blue candidate.
[*PG736] One might imagine that the world of Eatanswill is far removed from our own, yet the followingamong many other instances6were reported during the 2000 election cycle:7
As these examples indicate, there is arguably widespread non-compliance with the prohibition and certainly no groundswell of public support for it. Further, these instances merely represent political activity by churches that was actually reported. One surmises that many other instances occurred which escaped the scrutiny of the press. One also surmises that this level of activity indicates a certain slackness of enforcement of the prohibition by the Internal Revenue Service.28 An examination of the history of the prohibition indicates that it was passed in 1954 with little thought by Congress, or even by its sponsor, the Democrat Minority Leader (soon to be Majority [*PG740]Leader), Senator Lyndon Baines Johnson, concerning its effect on churches. In any event, the prohibition was not the product of a change in public opinion, but instead appears to have been proposed by Johnson as a way to squelch certain unsavory campaign tactics targeted at him by a few tax-exempt entities.
On July 2, 1954, Senator Lyndon Johnson was recognized from the Senate floor and the following colloquy occurred:
Mr. JOHNSON of Texas: Mr. President, I have an amendment at the desk, which I should like to have stated.
The PRESIDING OFFICER: The Secretary will state the amendment.
The CHIEF CLERK: On page 117 of the House bill, in section 501(c)(3), it is proposed to strike out individuals, and and insert individual, and strike out influence legislation. And insert influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office.
Mr. JOHNSON of Texas: Mr. President, this amendment seeks to extend the provisions of section 501 of the House bill, denying tax-exempt status to not only those people who influence legislation but also to those who intervene in any political campaign on behalf of any candidate for any public office. I have discussed the matter with the chairman of the committee, the minority ranking member of the committee, and several other members of the committee, and I understand that the amendment is acceptable to them. I hope the chairman will take it to conference, and that it will be included in the final bill which Congress passes.30
Following that short colloquy, the amendment, unchanged in its verbiage, eventually became part of the Internal Revenue Code of 1954. Subsequently, it proved to have a profound effect on how thousands [*PG741]of tax-exempt organizationsincluding churchesdealt with issues relating to political campaigns.31 Although not subject to debate and cryptic in its origins,32 it is possible to piece together a plausible genesis of the prohibition.
For tax practitioners, 1954 marks the seminal year of the creation of the modern Internal Revenue Code. For Lyndon Baines Johnson, freshman senator from Texas, it marked his first attempt at seeking re-election after a very closeand questionablecontest in 1948 which earned him the unflattering sobriquet of Landslide Lyndon.33 Johnson won the state-wide race by the exceedingly slim total of 87 votesless than one hundredth of one percent of the total votes cast.34 This margin of victory was supplied by the machinations of the notorious Duke of Duval County, George Parr, and the infamous Box 13 (the contents of which were later destroyed in a fire) that at the last second mysteriously generated 200 extra votes for Johnson and only one extra for his opponent, Governor Coke Stevenson.35 This election continued to haunt Johnson when he next ran for re-election in 1954.36
[*PG742] In 1954, Texas was basically a one-party state dominated by the Democrat Party, so that the primary election scheduled on July 24, 1954, to choose the Democrat candidate became the de facto general election.37 Johnson drew as his opponent in the primary the relatively young and unknown thirty-year-old, first-term state representative from Beeville, Dudley Dougherty.38 This young man from Beeville, as Johnson called him in correspondence,39 projected the persona of [*PG743]a rabid, fire-breathing anti-communist. In a long, hand-written letter that he sent to Johnson after his defeat, Dougherty ruefully acknowledged, I had a rather unhappy role to play, that of ultraconservative.40 Dougherty also had a religious role to play: he was Catholic and Johnson was protestant.
The year 1954 saw McCarthyism at its height and Texas was no exception to its allure.41 The extremely popular Governor, Allan Shivers, espoused McCarthys anti-communist views and ran a Red Scare-style gubernatorial campaign.42 Other imposing figures, such as the right-wing Dallas millionaire, H.L. Hunt, had geared up a conservative tax-exempt organization, Facts Forum, which produced radio and television programs as well as books and other literature espousing a hard anti-communist line that frequently crossed over into what some viewed as attacks on elements in the Democrat Party.43 Facts Forum, however, was not the only prominent tax-exempt organization trumpeting McCarthyism: the Committee for Constitutional Government (CCG) also joined the fray and in a seven-year period distributed over 82 million pieces of literature, made over 100,000 radio transcriptions, sent 350,000 telegrams, and issued thousands of news releases.44 CCG was adamantly opposed to Johnsons election and vociferously supported Doughertyand Johnson suspected that Facts Forum, in spite of its pledge not to involve itself in political campaigns, was clandestinely in support of Dougherty, as well.
[*PG744] As derisively noted by Johnson, it seemed that most of Doughertys support came from outside of the State.45 Indeed, although unsuccessful in securing endorsements from Texas newspapers and periodicals, Dougherty did receive an endorsement from the notorious anti-semite, Robert H. Williams, the publisher of the Williams Intelligence Summary from Santa Ana, California.46 Under the headline, The Fighters are Winning in the Primaries; Two Potential McCarthies Throw Hats in the Ring, Williams describes Dougherty as a Young St. George in Texas who is fighting the powerfully entrenched arch-New Dealer, Lyndon Johnson . . . one of the most hated of all Texans in office.47 Dougherty was also the beneficiary of the mass-mailing of a story by Willis Ballinger under the auspices of the Washington, D.C.-based group, Human Events, which endorsed him as the young David against Johnsons Goliath.48
[*PG745] Johnsonworried about the conservative tenor of the Texas electorate which might throw enough support behind his opponent to, if not actually defeat him, then at least garner sufficient votes to tarnish his chances with respect to subsequent electionsprivately took Dougherty very seriously,49 while at the same time projecting a public image that attempted to marginalize him and his supporters as much as possible.50 Many of Johnsons tactics consisted of the typical parry-and-thrust of campaigning whereby his supporters engaged in such activities as challenging Doughertys attendance record in the legislature, soliciting support from prominent conservatives, and seeking evidence of special favors received by Dougherty.51 Johnson also had his staffers and others keep close tabs on Doughertys campaign appearances and the work of his supporters and to report back on his progress.52
However, other tactics were of a different character which reflected a more aggressive campaigning style and indicated that Johnson was willing to pursue a number of different tactics to rout his opponent. Dougherty, in a letter written to Johnson after his defeat, explained, in a sardonic manner, his use of vigorous artillery against [*PG746]Johnson [s]ince some of your people put out a little poison as always happens in campaigns and since others were kind enough to wire tap my home.53 Given the source, this accusation must be discounted. Another associate of Doughertys, Igor Cassini,54 complained about being kicked off the air by the National Broadcasting Company (NBC) after he conducted a favorable television interview with Dougherty and Coke Stevenson.55 Johnson was very thin-skinned with respect to Stevensons involvement in the campaign,56 which helps to [*PG747]explain why, after the incident, Cassini wrote a letter to Richard Berlin, the president of the Hearst Corporation, seeking his commiseration by explaining, [u]nfortunately, this got me into trouble with NBC, because the Washington office received a call from Sen. Johnsons office, saying that they wanted to sue me (or so they said), and they threw the show off the air in order to appease the senator. Im sure Senator Johnson didnt request this, but you know how jittery they can be in broadcasting stations.57 In an earlier memorandum to Johnson, one of his aides reported that he had spoken to Frank Russell of NBC who had ordered a transcript of the interview and that, [i]f the tape shows any thing like what was reported Cassini will not be carried after this Sunday.58 The memorandum concluded with Russells observation that he would keep Senator Johnson completely out of it, and that whatever is done would be done purely by the network.59
[*PG748] Robert L. Clark, a Dallas attorney and Johnson confidante,60 was associated in activities directly concerning church involvement in the political campaign. He sent a copy of a typed letter to Senator Johnsons office a few days prior to the July 24 primary that was signed by Rev. Lewis L. Shoptaw and addressed Dear Fellow Minister:
I regret having to write you and other good pastors a letter concerning politics. I do not think that under ordinary circumstances any Minister of the Gospel should take part in any political campaign, but I feel compelled to do this because I think you feel as I do, that we must always be alert and viligant [sic] in any issue which seeks to combine Church and State.
I want to call your attention to the fact that there definitely is a campaign being waged against our fine Texas Senator Lyndon B. Johnson on religious grounds.
Lyndon Johnson is protestant. His opponent belongs to the Roman Catholic faith. I have no criticism as to his opponents religious belief but I am very much alarmed at the fact that religious politics are being used against Senator Johnson.
An impartial state-wide poll indicates that the Roman Catholic Mexican vote has been organized against him. In small communities in North, Central and South Texas, where German, Czechs and Polish citizens reside, an overwhelming vote against Senator Johnson is indicated in this very thorough poll.
I am not asking you to do anything politically but I am very humbly warning you that this under-cover attack on a fine Christian Senator does exist. I hope that you will regard this letter as entirely confidential and may the Good Lord Bless you for the fine work you are carrying on for protestant Christianity.61
Clark included a hand-written message at the bottom of the letter stating, [a]round 6500 of these mailed to clergy other than Catholics over the State for delivery July 21. I hope you like it.62
[*PG749] On another front, Johnson sought a rapprochement with the Archbishop of Texas, Robert E. Lucey. This action was probably motivated, in part, by the prominence of Doughertys family with respect to the Catholic Church in Texas.63 Johnsons staff member, Jake Pickle, sent a memorandum to Johnson, informing him that Pickle had contacted Dan Quill, a close acquaintance of Archbishop Lucey, and asked him to have a session with Archbishop Lucey to establish the specific relationship we might enjoy with Archbishop Lucey at this time.64 Pickle reported that Quill thought Archbishop Lucey was Lyndons friend.65 Pickle then relayed that he told Quill to stay close to him and find out, and added, I understand that Archbishop Lucey has, at least, said some kind things to Dougherty, primarily on his wetback stand.66 Johnson, in response to this memorandum, sent a [*PG750]letter to Quill asking, I wish you would talk to Archbishop Lucey and see how he feels about the situation without involving yourself and let me know right away.67
This overture bore fruit, as relayed by Pickle who contacted several people close to the Archbishop and received word back that he [*PG751]was for Senator Johnson for a number of reasons. Most of all, I think he believes you have done a good job and are a credit to the State.68 Pickle then urged Johnson to please write him a nice letter telling him that you have heard . . . about the considerate things he said about you and your work as Senator from Texas and you appreciate it very much. Tell him it was a distinctive honor to hear this from a man of his position and influence.69
Johnsons campaign also launched another religiously-tinged attack with respect to the endorsement by Williams in his Intelligence Summary. Dougherty denied any involvement with Williams and speculated that his unsolicited support might even be designed to hurt me.70 This observation turned out to be prophetic. Staffer George Reedy made contact with Herman Edelsberg, the Director of the Anti-Defamation League of Bnai Birth, who sent him a number of materials exposing Williamss anti-Semitic activities as a dispenser of hate literature.71 Another Johnson staffer, James Rowe,72 also contacted Edelsberg,73 who indicated:
[I]f agreeable to the Senator he, Edelsberg, will draft a letter which will be sent to one or two of the leading people in each community in TexasAnti-Defamation League peopleand probably there will be more than 2 going to places like Dallas and Houston.
The letter will say that Mr. Dougherty has invoked the aid of Mr. Williams, who is Anti-Semitic, and that these facts should be known to the Jews in Texas. It will not mention [*PG752]Senator Johnson. Edelsberg is a wise politician and he knows what to say.
This letter will go out if and when you say OK, and not before.74
In the margin are the scrawled letters, OK.75
All of these activities show that Johnson was worried about making a favorable showing in the campaign and would seek the support of all Texans in attempting to strengthen his support. Ultimately, he succeeded in spectacular fashion. Johnson received 883,000 votes to Doughertys 354,000, winning a decisive 71.37 percent victory over the young man from Beeville.76 Dougherty, shortly after the primary, informed Johnson in a letter that in spite of the true landslide for Johnson, he was pleased at the 350,000 that I, an unknown young man of thirty, a Catholic in a Protestant state, could receive.77 Later, as the bruises from the lop-sided election settled in, Dougherty wrote another letter to Johnson pledging, I am not going to go after you again and I doubt if I will ever get into politics much again.78 True to his word, Dougherty never ran again for public office.
With this backdrop concerning the political events unfolding during the first half of 1954 and Johnsons mental outlook regarding the upcoming election, one can better understand the motivations surrounding Johnsons amendment to the Code preventing interven[*PG753]tion in a political campaign by tax-exempt entities. Two tax-exempt organizations, in particular, drew his attention during the campaign: Facts Forum and CCG. It is apparent from both inter- and intra-office correspondence that both these organizations figured prominently in his decision to enact the prohibition.
Hunt started the tax-exempt organization Facts Forum in 1951 as a platform dedicated to the dissemination of his conservative views,79 which he disingenuously labeled as constructive.80 Hunt, through this organization, soon acquired a stature which his opponents viewed with alarm.81 Beginning with a periodical, Hunt quickly expanded the activities of Facts Forum to include giving large dinner parties featuring speakers warning of the evils of communism, both at home and abroad, and broadcasting radio and television programs that eventually reached 5 million viewers a week.82 These programs prominently featured such speakers as Senator Joseph McCarthy.83 However, Hunt attempted to distance Facts Forum from any criticism that it was something other than an entity concerned with educating the public on different policy issues. In an article entitled, Background on Facts Forum, Hunt wrote that Facts Forum would remain strictly non-partisan and had pledged not to take part in any political campaigns nor to support any candidate for office.84 Indeed, Hunt bragged that Facts Forum was so successful in its impartiality toward the political parties, and toward differing philosophies, that it went through the bitterly contested election campaign of 1952 with practically no criticism from any source whatsoever.85
[*PG754] Johnson, among others,86 had a different view.87 There exist numerous reports prepared for Johnson by Robert Clark that indicate an extensive investigation concerning various individuals working for Dougherty that might be linked to Facts Forum. For example, there is a dossier prepared by Clark on a B. Hayden Freeman, who is described as a young boy about 1416 years old, a student of Greenhill School, a private Dallas prep school. Young Freeman works after school at Facts Forum and for H.L. Hunt personally as a propagandist. He lives with his mother, who is a widow, Mrs. Elizabeth Freeman, 4005 Bryn Mawr.88 Clark reports on conversations with the neighbors, and with Freemans mother where he posed as a friend of Dudley T. Dougherty and she volunteered the information that her son Hayden worked every day after school for Facts Forum and H.L. Hunt but could not be reached today because he had gone to Houston to attend the Joe McCarthy speaking at the San Jacinto Battleground, but was expected back in Dallas tonight.89 Clark also investigated the boys deceased father and the mothers places of employment. The report ends by describing how Hunt became interested in Freeman and that his present political affiliations (if any), are under investigation.90
[*PG755] Freeman was the President of Texas Youth for America and had printed a widely disseminated letter under its banner critical of Johnson.91 Apparently, it was believed that the information for these at[*PG756]tacks had been supplied by Hunt.92 As a follow-up to these reports, a Senate staffer, Booth Mooney, had a blunt talk with Hunt confidante, H.L. Williford.93 Concerning the Ballinger article disseminated by Human Events, Williford disclaimed all knowledge and stated it positively was not being distributed by anyone connected with Facts Forum or the Hunt organization.94 Williford acknowledged that Freeman formerly did some work for Facts Forum after school, but he claimed that Freeman was immediately discharged after a letter distributed by Texas Youth for America came to their attention.95 Williford also denied involvement with certain other individuals and activities associated with supporting Dougherty and asserted very strongly that Hunt would not contribute in any way to Doughertys campaign.96 Mooney, for his part, remained skeptical of Willifords protestations of innocence97 but thought the frank discussionwhereby Mooney relayed that Johnson did not believe the reports circulating but could not keep wondering at their persistence,might serve as a restraining influence on Hunt.98
[*PG757] As discussed, Hunts Texas-based outfit was not the only tax-exempt entity causing problems for Johnson. Among the veritable plethora of national organizations taking potshots at Johnson during the campaign, the most nettlesome of these out-of-state interlopers appears to have been CCG.99 CCG was founded in 1937 by Frank Gannett, owner of one of the largest newspaper chains in the country.100 Like Facts Forum, it was supposedly created as a nonpartisan entity designed to educate the public on various policy issues. Directed by Gannett, its long-time executive secretary was Dr. Edward Rumely,101 described by an internal report for Johnson as the guiding genius of CCG.102 Apparently, a large proportion of CCGs funds was raised in Texas, although Rumely declined to reveal its major contributors when hauled before a congressional committee.103
Prior to its involvement in Doughertys campaign, CCG had developed somewhat of a track record for skirting the line between nonpolitical issue education and intervention in the political campaigns of particular candidates. Early on, CCG advocated against Roosevelts court reform bill of 1937 and then, later, against the road to dictatorship when Roosevelt sought a third term in office.104 Gannett claimed that this activity was not political because the organization [*PG758]did not come out explicitly against Roosevelt as a candidate.105 Similarly, in 1944, when Roosevelt sought a fourth term, millions of pamphlets were sent out urging a coalition against the New Deal Nazis in 1944. This time, Rumely denied that the mailings were political.106 Generally, however, CCG tried to abstain from intervening in a political campaign.107
From Johnsons files, it is apparent that at one time a separate Senate-office file was kept on CCG,108 and that CCG was perceived as the model for Doughertys organization.109 Johnson viewed the involvement of CCG as a serious problem.110 One internal report described it as the wealthiest and most powerful of the extreme right-wing groups in the United States. It publishes a fantastic amount of literature which is distributed all over the United States.111 Of course, CCG had widely disseminated the Ballinger article critical of the senator through its organ, Spotlight,112 which Johnson found strongly ob[*PG759]jectionable.113 Further, it had come to Johnsons attention that CCGs mailing list coincided with the mailing list for Representative Ralph Waldo Gwinn.114 Upon further investigation, a staffer reported to Johnson that it was not at all unusual that Representative Ralph Waldo Gwinn should be using one of the Committees mailing lists. He is notorious for putting the Committees material in the [Congressional] Record and then mailing it out by the ton under his frank. It is supposedly a matter of common knowledge that he has actually turned bundles of his franks over to the [CCG] to use as they see fit.115 Gwinn also was not shy about this connection and used it in defense of Richard Nixon when old stories about his slush fund that was maintained from various interested donors were resurrected during the 1954 Congressional campaigns.116
Perhaps most infuriating to Johnson was that CCG was raising funds from corporate contributors and then using those funds to [*PG760]wage war against his campaign.117 This tactic, too, was apparently typical of CCG which had raised funds from corporate donors for years, in apparent violation of the Corrupt Practices Act, with little fear of reprisal because of the lax enforcement of the law.118 On May 27, 1954, Johnson received a letter from J.R. Parten, the Chairman of the Board of the Federal Reserve Bank of Dallas,119 who included a fund raising letter from Sumner Gerard, a trustee for CCG, which stated the following:
We appeal to you and to other long-time friends to help bring about the immediately needed seed money fund of $30,000 to $50,000. . . .
If you give now, or add to your past support in the form of subscriptions to SPOTLIGHT, a legitimate corporate expense, you will help greatly. Or, if you prefer, make personal or corporate check payable to the Constitution and Free Enterprise Foundation, Inc., which has U.S. Treasury ruling of deductibility and is chartered to safeguard constitutional liberty and economic freedom.120
Also included was a subscription form for Spotlight describing the periodical as a way to aid your non-partisan, educational campaign on fair taxation, sound anti-recession remedies, and safeguarding constitutional liberties and economic freedom.121 Parten commented in his letter that he was sending the enclosures to Johnson in order for him [*PG761]to review them with a view to taking any appropriate action in the interest of sound governmental practice.122 Parten further added:
The pecularities [sic] that quickly meet the eye are: (1) That it is an appeal for contributions; (2) that Mr. Gerard says If you give now or add to your past support in the form of subscriptions to SPOTLIGHT, a legitimate corporate expense, you will help greatly; and (3) the enclosed issue of SPOTLIGHT presents what is entitled the Texas Story by Willis Ballinger, and this article devotes one and a half full pages to a violent attack on you, and for the clear purpose of advancing the candidacy of Dudley T. Dougherty, your opponent in the Democratic Primary in Texas. . . .
Since when did it become legal and legitimate to expend corporate funds for political purposes? I wonder if Mr. Gerard did not mean to convey the idea that such contributions may be considered both legitimate corporate expense and income tax exempt.123
In response, on June 3, 1954, Johnson sent a letter to Parten, thanking him for the enclosures relating to CCG and remarking, I myself am wondering whether contributions to an organization so actively engaged in politics can be classed as a legitimate corporate expense and I am having this question explored by experts.124 Indeed, Johnson had Gerald Siegel, counsel to the Senate Democratic Policy Committee, look into the issue.125
On June 15, 1954, Siegel submitted a memorandum to Johnson concerning whether the Ballinger article circulated by CCG, which also listed Doughertys address and urged readers to communicate with him, violated Section 243(e) of the Texas Election Code, which prohibited purely charitable entities, subject to criminal sanctions, from intervening in political activities.126 Siegel explained to Johnson [*PG762]that this statute served as a prophylactic measure to prevent corporations from indirectly participating in political activities through donations to charities which would then use the contributions to further the corporations political agendas.127 Although he noted that CCG has openly solicited corporate contributions to its organization for so-called educational purposes and may be viewed as trying to influence a senatorial election by aiding the candidacy of Dougherty and attempting to defeat your candidacy, nonetheless Siegel concluded that CCG probably cannot be viewed as having violated Section 243(e) because it can argue that it is simply educating the Texas voters on policy issuessuch efforts to influence legislation being sanctioned under Section 101(6) of the Internal Revenue Code as long as they are not a substantial part of CCGs activities.128
In addition to ascertaining whether CCG had violated any statutes, Johnson also contacted several of his influential friends to pursue other avenues of running CCG to ground. On June 17, 1954, his friend, Thomas G. Corcoran, a long-time political insider,129 had a telephone conference with Gerard concerning the Ballinger story. Shortly thereafter, Gerard sent Corcoran a letter, informing him that Gerard had spoken to Dr. Rumely who explained that the article was used . . . because your friend, Mr. Lyndon Johnson, took no definite [*PG763]stand on certain current issues, but [b]eyond that, there was no thought of messing up in Texas politics.130 Sumner further added that Dr. Rumely now promises to cause to be printed as a Spotlight article any statement or article Mr. Johnson would like to make, provided it be along the lines the Committee is moving . . . .131 Apparently, Johnson was not inclined to accept this magnanimous offer to be enlisted as a CCG mouthpiece.
Also at this time, Johnson apparently spoke to Massachusetts Representative John W. McCormack, a long-time ally,132 who was then the House Democratic Whip.133 McCormack, on June 18, 1954, sent a copy of the Ballinger article and the Sumner Gerard CCG fundraising letter (which Parten had sent to Johnson) to T. Coleman Andrews, the Commissioner of the Internal Revenue Service. In a cover letter, McCormack informed the Commissioner:
There has very recently come to my attention an unusual document being distributed by the Committee for Constitutional Government, Inc. which is apparently an organization, or affiliated with an organizationthe Constitution and Free Enterprise Foundation, Inc.claiming exemption from Federal income taxes under section 101(6) of the Internal Revenue Code. I am enclosing photostatic copies of some documents from which you can see that the committee is going very far in the direction of intervention in support of a political candidacy.
The Committee for Constitutional Government urges contributions from its readers, both individual and corporate, pointing out that such contributions may be deducted from their Federal income tax. As a member of the House Ways and Means Committee for many years, this document strikes me as both amusing and shocking. I cannot recall of any other similar flagrant engagement in political affairs by a tax-exempt organization.
[*PG764] Would you please furnish me with a report as to whether the Committee for Constitutional Government and its affiliated Foundation are exempt organizations under section 101(6) and whether in your opinion the activities reflected in the attached documents are properly and legally engaged in by such an exempt organization.
Your prompt consideration of this matter and answer to this letter, if possible, within the next ten days will be appreciated.134
On June 28, 1954, the Commissioner responded to McCormacks letter, noting that he, too, found the CCG documents no less amusing and shocking and that the Service was taking appropriate steps to see just what is the effect of the activities of these organizations under the internal revenue laws and what, if anything, can be done about their present status in relation to exemption privileges.135
Apparently, under existing law, there was very little that could be done. The House Special Committee to Investigate Tax-Exempt Foundations was winding down its operations without having made any apparent headway. In Johnsons files is a copy of a statement dated June 2, 1954, made before this committee by Norman A. Sugarman, the Assistant Commissioner of Internal Revenue. This lengthy statement describes the history of the tax provisions limiting political activities by tax-exempt entities and, specifically, propaganda activities carried out by educational organizations. It describes the history of the 1934 amendment concerning these matters and explains that the Committee reports:
show that as first proposed, the 1934 amendment to the statutes read and no substantial part of the activities of which is participation in partisan politics or in carrying on propaganda, or otherwise attempting to influence legislation. [*PG765]The words participation in partisan politics were stricken from the bill, as enacted.136
The statement also notes that as a current condition to exemption, no substantial part of an entitys activities is carrying on propaganda, or otherwise attempting, to influence legislation. A handwritten transcription of this requirement is contained in notes, presumably made by a Johnson staffer, accompanying the copy of the statement. The staffer also wrote down the cites for the various cases discussed in the statement concerning the activities of educational entities.
On July 2, 1954, the House Special Committee to Investigate Tax-Exempt Foundations ended its deliberations.137 That same day, Johnson offered his amendment on the Senate floor, banning such tax-exempt entities, including all 501(c)(3) organizations, from participating in a political campaign by supporting a political candidate.138 The next days front page of the Washington Post carried an article that described the amendment as one that would withdraw tax-free status from any foundations or other organizations that attempt to influence legislation or dabble in politics in behalf of any candidate for public office.139 This article, with its broad language concerning other organizations and influence legislation, apparently generated some worry and consternation among various Johnson supportersincluding, most importantly, labor unionswhich feared they were caught in the prohibitions dragnet and could no longer support various candidates for public office. Johnson once again tapped the Democratic Senate Policy Committee counsel Siegel for a clarifying memorandum which he obligingly issued that same day:
SUBJECT: Amendment to the Tax Bill respecting political activities of tax-exempt organizations.
The amendment which you offered and which the Senate adopted to extend the limitations on the activities of tax-exempt organizations under section 501 of the bill (formerly section 101(6)) to prevent intervention in behalf of the po[*PG766]litical candidacy of anyone running for public office, will have no effect upon labor organizations. Unions, or organizations affiliated with unions such as the CIO Political Action Committee, are not tax-exempt organizations under section 501 and will not in any way be affected by the amendment.
I noted in the Washington Post this morning that their statement about the amendment was incorrect. They gave the impression that your amendment included a prohibition on activities influencing legislation. That provision is already in the law and the only addition, of course, made by your amendment would be to deny tax-exempt status to such so-called charitable or educational organizations if they participate or intervene in any political campaign on behalf of any candidate.
The amendment will not have any effect on such organizations as Facts Forum either unless they go beyond their present activities and specifically intervene in political campaigns on behalf of public office candidates. So far as I know they have never done this but have confined themselves entirely to discussions of political issues.140
The apparent instigator for this memorandum was probably the powerful CIO Political Action Committee,141 since it is the only entity specifically mentioned. One might surmise that this hastily written memorandum was duly shown to it and other concerned parties to calm any fears that might have been raised by the inaccurate newspaper article.
As a coda to Johnsons amendment, it appears thatjust as Booth Mooneys discussion with Hunts right-hand man, Williford, appears to have had the salutary effect of causing Facts Forum to back down from its possible opposition to Johnsonall of this frenetic activity by Johnsons office also put CCG on the defensive and forced it into an abrupt volte face. On July 9, 1954, Sumner sent another letter to Corcoran enclosing correspondence from Dr. Rumely and a Spotlight article that Sumner hoped would give Corcoran some satisfac[*PG767]tion.142 Dr. Rumelys letter discusses the new Spotlight article which praises Johnsons reaffirmation of the Monroe Doctrine by his March 28, 1954 resolution asserting that proper steps should be taken to prevent any interference by the international Communist movement in the affairs of the States of the Western Hemisphere. The article highlights the great value of statements like those made by Johnson and ends with the hope that, along with the Lodge Resolution of 1912, the Johnson Resolution of 1954 be made living instruments, as fully implemented as need be.143 Dr. Rumely notes that, with respect to this article, CCG had a special mailing planned for 18,000 top level leaders in Texas, a new list of the most influential civic and business leaders there as well as a mailing to the usual mailing list of 60,000.144 Dr. Rumely does not explain why the mass mailing of the Ballinger anti-Johnson article occurred after this historic March 28 resolution. One might surmise that this new article might have been in reaction to pressure placed by Johnsons office, and that CCG frantically searched through Johnsons record for some recent legislative action that it could support. In any event, the article signaled the final surrender of the conservative forces which had opposed Johnson during his primary campaign. Not a peep would be heard from them during the general election.
There is no evidence that a religious element played a significant part in Johnsons decision to ban certain tax-exempt entitiesincluding churchesfrom intervening in support of a political candidate.146 Rather, Johnson saw a cabal of national conservative forces, led by tax-exempt educational entities fueled by corporate donations, arrayed against him and wanted to put a stop to the meddling of these foreign interloperschief among these being CCG. By the end of his campaign, Johnson had effectively cowed these organizations, with CCG in particular offering a propitiatory tribute to him in its own house organ. Further, Johnson also wanted to stomp out a potential threat in his own back yard that might arise in the guise of H.L. Hunts Facts Forum. Even though Siegels memorandum makes clear that Facts Forum, as it was then operating, would not be affected by the prohibition, Hunt never again sought to cross Johnson through the organization.147 Finally, Johnson was still smarting from the innuendo surrounding the 1948 election; and Coke Stevensons support for Dougherty and continued airing of charges in the national media from that prior election simply added to the already volatile mixture that led to the enactment of the prohibition.
Although the involvement of churches in political campaigns did not spur Johnsons amendment, such involvement did figure in his actual candidacy. One might discount the claim, made in the heat of the campaign, that religious politics are being used against Senator [*PG769]Johnson. Clearly, however, there was a religious element to the 1954 election. Certainly, Johnson did not disdain to use religion as a wedge when it suited his purposes or to neutralize certain religious elements that might prove to be potentially hostile. Further, Dougherty was very much aware that his Catholicism would be an impediment to winning office in Texas, a predominantly Protestant state, and was quite proud of the showing he was able to make in spite of such a perceived disability.148 It appears that Dougherty was one of the first Catholics to run for state-wide office in the State of Texas, and that a lesson that may be drawn today from his quixotic campaign is the impossibility of unraveling the interweaving of politics and religion.
In the face of lackluster opposition by the Internal Revenue Service, the Democrats and Republicansharkening back to the Buffs and the Bluescontinue to use the literal bully pulpits of the churches to preach to the party faithful. Lyndon Johnson, as the sponsor of the amendment that made such conduct problematic, clearly had no compunction against using such tactics to advance his own political candidacy. When he pushed through the prohibition, he was not acting in response to any public outcry against such activities. Indeed, there is no indication of any concern expressed regarding such politicking. Little has changed since that timeexcept now some churches feel compelled to pay lip service to Johnsons prohibition, one that is increasingly becoming more honored in the breach than the observance.149