IRS-Style Viewpoint Discrimination in Grand Rapids City Government?

'...government agencies are purposefully misusing tax laws'

The city attorney’s office in Grand Rapids appears to have targeted a nonprofit think tank for ideology-based viewpoint discrimination in what should have been a routine property tax matter. That conclusion was reinforced this week by recently obtained emails sent by the former head of the office.

At the center of the controversy was former Grand Rapids City Attorney Catherine Mish, who resigned from her job about a month before a state tax tribunal ruled in favor of the Acton Institute. The institute was in a dispute with the city over its status as a tax-exempt charitable organization.

Court filings and official emails show a pattern of hostility by the city attorney’s office that appears to be reserved for entities openly professing limited-government or conservative viewpoints. Michigan Capitol Confidential received the documents from the city in response to a Freedom of Information Act request.

The saga began when the city of Grand Rapids rejected the Acton Institute’s request for a tax exemption, in 2014, on property it had purchased in 2012 and then rehabbed for its new downtown headquarters. When the city rejected Acton’s appeal, the organization took its case to the Michigan Tax Tribunal, where it was vindicated in March 2016.

The apparent animosity by Mish’s office toward Acton’s philosophical orientation was evident throughout the two years during which the dispute dragged on. Acton describes itself as “dedicated to the study of free-market economics informed by religious faith and moral absolutes.”

In a March 6, 2014, email, Mish sent a 280-word explanation to a reporter at the statewide news site MLive in which she went into details of the legal aspects of the dispute. She described existing case law and speculated how the legal process might play out.

Two days later, the Rev. Robert Sirico, co-founder of the Acton Institute, sent an email to a Grand Rapids city commissioner asking for help in setting up a meeting with the city to get answers to questions the nonprofit had about its tax status — questions that were not being answered by the city.

“While representatives of the city (the city assessor and the city attorney) had time and felt free to speak to the press about this matter, neither had addressed anything to us, at our request,” Sirico wrote in his March 8, 2014, email. “This hardly seems fair or transparent.”

Mish was far less cooperative in dealing with Michigan Capitol Confidential than with the MLive reporter. An April 2014 email sent to this news site stated that "the city will not be responding to your questions, but only to your FOIA records requests, and only in the manner required by the FOIA statute. … The city does not serve as the legal counsel for the Mackinac Center. The Freedom of Information Act does not require the city to perform legal research for you, and we will not do so. If you want to understand 'the written definition of what constitutes a property-tax-exempt charity', as you stated in your FOIA … I suggest that you consult an attorney to provide you with that legal advice."

This favoring of one media outlet over another by the city attorney drew the interest of the Michigan Press Association, which used its monthly bulletin to highlight a Michigan Capitol Confidential article about Mish’s conduct.

Mish later sent an email from her work account to a private citizen that slurred the developmentally disabled daughter of an Acton staff member, calling the minor who had been the victim of an alleged rape a “crack and heroin whore.” At the time, the girl’s family was involved in an unrelated legal dispute with the city.

Mish wrote about the girl, “She wandered the streets of downtown Grand Rapids, acting as a prostitute in exchange for heroin, cocaine, alcohol and so forth. … The police finally found her after many days of her escapades in trading sex for drugs.” Later in the email, Mish questioned the girl’s upbringing.

The newly acquired emails add to existing evidence that officials in the Grand Rapids city attorney’s office may have been using tax law to carry out an ideology-based attack on an organization that did not share its views. A 12-page summary disposition dated Jan. 21, 2016 for a Michigan Tax Tribunal hearing, signed by assistant city attorneys Jessica Wood and Elliot Gruszka, contained the following inflammatory allegations:

    • “Petitioner is a public policy think-tank attempting to masquerade before this Tax Tribunal as a charitable and educational organization.”
    • “Acton Institute is a politically driven think tank that publishes right-wing libertarian, philosophical, and political propaganda tempered with extreme-right religious viewpoints.”
    • “A search of the Acton website and related blogs plainly reveals its anti-charity mission.”
    • “Ironically, and hypocritically, although the foundation of Acton’s entire underlying philosophy appears to be anti-charity, it now asks the city to exempt it from the payment of property taxes as a charitable organization.”
    • “Acton’s primary purpose appears to be to impart its political anti-charity wisdom to other groups in order to discourage them from providing traditional forms of charity. Its mission is couched in terms of libertarianism and economics—not in terms of providing charity.”
    • “Acton does not feed the hungry, help the homeless, fight for economic or social injustice, provide food or health care to those in need, or provide job training or skills. (Exs. 4 2, 3, 4, 5, 6, 7, and 8.) Nor does it educate people in a way that lessens the burden of government or fits into the scheme of general education pursuant to MCL 211.7n. In fact, Acton bluntly discourages traditional forms of charity without any direct interaction with those in need of charity. Acton imparts its politics to other organizations, but never directly interacts with those actually in need. Acton Institute is a libertarian publishing company set up as a nonprofit in order to create platforms on which to spread its political and philosophical message.”
    • “Contrary to its stated mission of personal economic accountability and morality, Petitioner is seeking to shift its tax burden to every other citizen and entity in the city of Grand Rapids by pretending to be something it is not: a charity and educational institute.”

Acton noted the hostile tone in a press release that read in part: “Particularly disappointing to Acton were briefs submitted by the city during this process that made factually inaccurate assertions and used incendiary, highly politicized language more suitable to a partisan political blog than a court of law." It continued, “Perhaps the most disturbing misrepresentation made by Grand Rapids in its court filings was that Acton was ‘ironically and hypocritically … anti-charity.’ In fact, Acton has always been a strong advocate of private charity, as any cursory examination of its publications or website would show.”

The apparent viewpoint discrimination committed by the office of the Grand Rapids city attorney may not be an isolated incident, according to the Center for Competitive Politics, a Virginia-based advocacy organization that works on First Amendment issues. In an email, CCP research fellow Scott Blackburn wrote: “This is just another example of an ongoing trend we are seeing across the country. From California to New York to the IRS in Washington, government agencies are purposefully misusing tax laws to target citizen groups for their political beliefs. Such actions are intended to intimidate donors, tie organizations up in expensive legal battles, and ultimately silence opposing viewpoints.”

CCP scholars are not the only ones to compare Mish’s conduct to the unresolved scandal involving the IRS official Lois Lerner, who resigned and invoked the Fifth Amendment protection against self-incrimination when it was revealed that the bureau she ran had targeted conservative nonprofits for inaction on tax-exemption requests.

"It’s hard not to notice the similarities between this apparent example of ideological viewpoint discrimination by government officials and the Internal Revenue Service effectively silencing hundreds of local tea party groups through inaction on tax exemption filings," said Jack McHugh, the legislative analyst for the Mackinac Center for Public Policy. "One can easily picture former IRS official Lois Lerner concurring with many of Mish’s opinions. Both incidents raise serious questions about the role of a supposedly neutral administrative state in a democratic society. 'Neutrality' is an increasingly untenable fiction."

The city of Grand Rapids has declined to comment on this story. Mish didn’t return emails seeking comment.

Sirico, the Acton Institute's president, is on the 49-member board of scholars of the Mackinac Center for Public Policy, the parent organization of Michigan Capitol Confidential.