"You really don't need people to do this. You just need control over the legislature and you need money, and we have both."
Subjects Inside: Article
Application Counts By
AVC Legislative Report, CRS Reports,
Convention of State, Compact for America, COS, CFA--Which States are Which?, The Historic Record of COS, COS, CFA Laws, COS Articles, CRS Reports on COS/CFA, COS, CFA Financial Records, CFA Financials, COS Financials, COS/CFA Financial Conclusions, John
Birch Society, Con-Con, Runaway
Convention, Who Called the Convention, Congressional
Vote on a "Runaway" Convention, "Obey
the Constitution, Only Two More States", Illegal Rescissions, The Phony Burger Letter, The
Madison Letter, Fotheringham Exchange, JBS Articles, Sibley
Lawsuit, General Interest, Article V.org,
Robert Natelson, History
of Article V, Counting the Applications, The Numeric Count History, Congressional Decision of May 5, 1789,
Development of Article V, The Committee of the Whole, The Committee of Detail, August 30, September 10, Committee of Style, September 15, Official Government Documents,
History of FOAVC, Founders,
Page, 14th Amendment, The Electoral Process, Packets,
Definitions, Numeric, (Applications grouped by numeric count as required by the Constitution),
Same Subject (Applications grouped by amendment subject, not required by the Constitution for a convention call).
"Journalists" who have "investigated" the financial
records of Compact for America or Convention of States have done so with obvious political motives. Their focus therefore has been on a single aspect of
the financial records of these organizations--an alleged source of funding. The obvious political slant of the "reporting" has been to attempt to link a source of funding from
specific wealthy individuals with a specific political agenda to either COS or CFA. None of these
investigations have produced any documented evidence proving a direct funding link from the wealthy individuals to these organizations.
Instead, lacking documented proof
these "journalists" rely on implication suggesting because
Convention of States or Compact for America has purportedly received
financial support from these
individuals (based on unsubstantiated reports by other "journalists") or
because a particular individual is a member of an organization which
donated money to CFA or COS the purpose of the COS or CFA is somehow
of these "journalistic" investigations have uncovered any indication of any
violation of law on the part of Convention of States or Compact for
America or even proven the wealthy individuals named at the heart of
the "investigation" have, in any provable, documented way influenced either COS or CFA. In short, from a evidentiary point of view these "journalists" have proved nothing.
FOAVC has conducted a more detailed examination of the
finances of Convention of States and Compact for America. We have
avoided any specific political agenda and based our investigation on documented evidence letting the evidence speak for itself. In short, we have investigated, then concluded, not the other way around. This detailed examination has resulted in raising
several questions regarding the financial records of both Compact for
America and Convention of States that have been missed by other "journalists." We believe the documented evidence we have examined will be of great interest to the American people. This information is not for the 30 second sound byte crowd who expect to be spoon fed their information however.
documented evidence has been publicly available for some time. However
it has never been presented in such as manner as to expose the full
impact of the evidence. Explaining
this evidence in the fullest detail in order to explain its significance
requires a great deal of depth and detail. It also requires a great
deal of time to compile. Such is the
nature of financial and other records related to these organizations.
consequence, our admittedly long and detailed investigation may only
interest a few individuals willing to wade through the extensive detail
of these investigations. For those not so inclined we suggest they
immediately go to our summary page
and read the brief summation of our investigation regarding COS/CFA
finances and other actions and then have the rest of a pleasant day.
Because we believe the public has a right to know as soon as possible
FOAVC is publishing its
investigation of Compact for America at this time rather than wait
until both investigations are complete. While similar in nature due to
relevant laws relating to both organizations, there is nothing to
suggest because anomalies have arisen regarding regarding Compact for
America that such anomalies will be found with Convention of States.
Each organization is examined based on its own evidence. Our
Convention of States therefore continues and will be published at a
It is entirely possible as a result of our investigation questions we presently have regarding COS will be answered. FOAVC will not answer any inquires regarding its investigation of Convention of States until
it is completed and published. As a result, all pages related to the
COS investigation will only have a message indicating the page is
"under construction" together with a link back to this page.
Page 5 D--COS, CFA Financial Records
"You really don't need people to do this. You just need control over the legislature and you need money, and we have both."
--State Representative Chris Taylor quoting a statement made to her at 2013 ALEC summit
FOAVC Is Publishing the COS/CFA Financial Records Because:
- COS/CFA propose a new form of government for America based on the
principle of government by the few rather than consent of the many. Our right to vote is being taken by COS/CFA not given away by consent of the people.
form of government, which has a name--tyranny--removes our right to vote by enactment of state laws which deny us the right to vote (as intended by the Founders, affirmed by the Supreme Court and specified in federal law) on delegate selection and convention agenda. Neither
COS/CFA nor any state legislature which has thus far "signed on" to
COS/CFA inspired law has conducted as much as a public opinion poll, let alone a
public vote, on whether we agree with this new form COS/CFA
government. The implications for this new form of COS/CFA government demand the closest
inspection of all possible information. This includes not only examination of the COS/CFA political
record but the financial records as well.
Both Convention of States and Compact for American claim tax exempt status
Both COS and CFA claim tax exempt status as 501(c)(4) social welfare organizations. Since
COS/CFA are tax exempt organizations, the income taxes these groups would otherwise
pay means other American citizens must pay higher incomes
taxes in order to make up the difference. We are therefore paying the tax bill allowing COS/CFA to remove our right to vote.
Under these circumstances FOAVC believes the American people are
entirely justified in knowing every financial detail about COS/CFA permitted by public law.
- The American
people are footing the tax bill for these two organizations as they go
about removing our right to vote. We deserve to know what we are paying for.
On several occasions our investigation of the federal
income tax returns of Convention of States and Compact for American has
revealed apparent discrepancies between what these organizations have (or in some cases have not)
reported in their income tax forms and what is required by federal
income tax law. FOAVC does not suggest these discrepancies prove any
deliberate wrongdoing on the part of these organizations or even prove
violation of federal income tax law. FOAVC does believe these discrepancies
raise questions which merit investigation. FOAVC believes these questions should be reported to the
- FOAVC has questions regarding apparent discrepancies between the tax records of COS/CFA and federal income tax law.
Follow the money is not only a popular movie phrase
but a piece of good piece of political advice in evaluating political
organizations. FOAVC is therefore publishing all available financial records of
Convention of States and Compact for America permitted by public law so the American people know:
- FOAVC believes the American people are entitled to know all the facts regarding COS/CFA.
- who is financing Convention of States Project and Compact for America
- how much money is being spent on these groups by other groups
- who benefits financially within COS/CFA, i.e., how much money are the insiders getting
- how much money is being spent on the political campaigns of COS/CFA
- do the financial records of COS/CFA present possible "red flags" for these 501(c)(3) and 501(c)(4) organizations?
- Are other laws effecting COS/CFA being violated?
The Standards of Federal Tax Law
According to the IRS, "To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earning may inure to any private shareholder or individual. In addition, it may not be an action organization,
i.e., it may not attempt to influence legislation as a substantial part
of its activities and it may not participate in any campaign activity
for or against political candidates." According to the IRS ,"To
be tax-exempt as a social welfare organization described in Internal
Revenue Code (IRC) section 501(c)(4), an organization must not be
organized for profit and must be operated exclusively to promote social
welfare." The IRS further states that a 501(c)(4) organization, "must operate
primarily to further the common good and general welfare of the people
of the community."
IRS regulations also require that tax-exempt organizations may not be
organized for illegal purposes or for purposes which do not promote the
general public good.
Under federal law if an organization violates the federal tax law
granting 501(c)(3) tax exempt status, the group is automatically denied
their status as a 501(c)(4) organization. As prescribed by law penalties for violation of
501(c)(3) or 501(c)(4) tax law can include:
- payment of part or all back taxes owed that have otherwise have been exempt;
- additional fines and penalties and;
- possible fines and/or prison terms levied against members within the organization.
Threat of Retaliation by Convention of States
In his email response to FOAVC's
request for their public federal income tax records, attorney Robert
Kelly, legal representative for
Convention of States threatened FOAVC with unspecified legal action
should FOAVC sully the
"good name" of Convention of States in publishing the financial records
of Convention of States. According to the 2015 tax return the legal firm employed by COS at that time received one million dollars
in legal fees or nearly one-fifth of its total operating budget for the
year. FOAVC is unaware of any past or current legal action against
Convention of States, its officers or its members. Under federal law 501(c)(3) and 501(c)(4) organizations must
make available IRS tax forms designated as "Open to Public Inspection" to members of the public
upon request however that request is
phrased or worded. Whether any organization which seems intent on seizing control of the federal amendatory process and depriving the American people of their right to vote can have a "good
name" is a subject open to debate.
In the interest of full disclosure we are publishing all email communications between FOAVC and Convention of States
and Compact for America. The emails are published in delivery order, oldest to newest. To
accomplish this, we have reformatted the original email messages by
combining portions of pages of the
various emails in order to join the various texts together for ease of
reading. FOAVC has not edited any text from the emails. A pdf copy of the emails is also provided.
CFA -- Nick Dranias Emails
CFA -- Chip DeMoss Emails
COS -- Robert Kelly Emails
FOAVC Response to the COS Threat
Upon examining the COS tax
forms FOAVC became aware of the millions of dollars COS has at its
disposal. It became aware of the massive amount of money paid a few
individuals in COS. Naturally these individuals wish to protect that
income and therefore would react to any perceived threat to that
income. FOAVC became aware of the massive financial
resources of political groups
backing COS (in excess of a billion dollars). FOAVC became aware of the one million dollars paid in
legal fees to its legal advisers (one fifth of the COS reported
income for the tax year 2015). FOAVC is aware of the perceived political power this 30,000 volunteer organization (approximately 600 people
per state) believes it possesses over the American public. FOAVC is also aware COS claims to have over two million volunteers but has produced no evidence to support this claim.
FOAVC does not take threats lightly. In response to this COS threat, FOAVC will report only the financial
facts of public record as stated by COS/CFA in their tax forms together with such other
factually based information as relates to the subject being reported.
As with all information FOAVC publishes, the information provided will be fully referenced. FOAVC will
then present conclusions or raise questions which can be reasonably surmised from these
facts of public record such as comparing statements made by
COS/CFA in their public records with appropriate federal tax law,
or requirements all of which is public record. We also reserve the
right to examine other documents provided by COS/CFA in light of other
laws such as applicable state law. In short we will report
the facts and remain well within the parameters of reporting permitted
FOAVC believes the information it is providing as well as its conclusions are well within the safe harbor afforded it by defamation laws.
These laws, which vary from state to state, establish the legal
standards under which a defamation suit may be instigated. Plaintiffs
who are unable to satisfy these standards of law have no basis for a
suit. The most important legal standard is the
truth. Truth is considered an absolute defense in a defamation lawsuit.
It need hardly be said in
publishing public tax forms created by COS/CFA and
comparing that information with public tax law FOAVC is obviously
publishing the truth.
This equally applies to the publication of other COS/CFA information
and comparing that to other relevant public record or law.
Another standard of defamation is whether COS/CFA are what
is termed "public figures" under defamation law.
According to the Supreme Court, public figures must prove deliberate
malice, that is a reckless disregard of the truth, in order to
successfully sue for defamation. The expression, "reckless disregard of
the truth" in simplest terms means a plaintiff, in order to be
successful in any suit, must prove the alleged defamatory material was published with malice, that is, published by a defendant who knew the information was false and published it anyway. The public figure standard thus sets a
higher bar for a plaintiff to satisfy in order to be successful in a
FOAVC believes both Convention of States and Compact
for America fall under the legal definition of "public figure" as defined by
the courts which involves public figures voluntarily thrusting themselves into the vortex of public debate. Both organizations (including their officers and members) have
clearly voluntarily "thrust" themselves into the "vortex of public debate."
Both organizations have a political agenda which involves proposed
amendments to the United States Constitution by
an Article V Convention (or as COS phrases it, "a convention of
states"). The Constitution is a public document affecting all
Americans. Alterations to the text of the Constitution by means of
are within the realm of public debate. Both
organizations have either favored or helped create public laws
convention for proposing amendments, one of the two methods of
amendment proposal described in the Constitution. The affect of public
laws are also unquestionably
within the realm of
public debate. Finally, comparing documented records of COS/CFA
obtained from the organizations themselves with relevant documented
public policy concerning statements made in those documents clearly is
not a "reckless disregard for the truth."
indisputable COS/CFA have "voluntarily drawn attention to
themselves as a fulcrum to create public discussion."
Indeed, were it not for Convention of
States and Compact for America backing or creating state laws intended to remove the people's right
to directly vote on delegate selection for a convention the issue would not exist. The fact is not only are COS/CFA in the vortex of public debate, they created the vortex in the first place.
Moreover blatant efforts of Convention of States to seek
applications and favorable laws regulating a convention to achieve their political goals or Compact for
seeking a "compact" with the same intent clearly thrust these
organizations "into the
vortex of the public issue and engage the public's attention in an
attempt to influence its outcome."
Members of COS and CFA have testified at countless public hearings of
various state legislatures identifying themselves as
representatives of their respective groups with the stated intent of
decisions on applications or state laws. (Examples: CFA_Arizona; COS_Illinois; Nevada; Ohio; Utah). There is no malice
in discussing public records of these organizations or examining them in
light of other public records or public policies. Therefore any threat of retaliation
by COS made against FOAVC for examination of their
public records and making comments on those public records is
COS is not the only organization that can hire lawyers. "Examination of
public records, particularly those obtained as a result of a voluntary decision
on the part of the party which results in the creation of public
records subject to public examination as required by law, is not
actionable. The law
created by Congress (and by the states) requiring inspection of public
records was done
with the intent of permitting the general public the opportunity to be
aware of matters of public policy. Public inspection laws carry with
implied immunity from legal
retaliation by those who, for whatever purpose, seek to deny the public
the right of inspection of records designated as "public records" thus
preventing the public access to the
information contained within those public records. Were denial possible
when otherwise required by law, such a action
would have a
chilling effect on the First Amendment right of the people to know how
functions and thus able to make informed decisions regarding that
government. Efforts to curtail this right can be actionable against
those parties who either threaten or attempt to coerce a member of the
public from exercising this right. This is certainly true in the
case of anyone acting in the capacity of what can be broadly termed,
"journalistic reporting" whose purpose is to report information
contained in public records to the general public and thus bring to
their collective attention matters which might otherwise go unnoticed."
The obvious reluctance of these
organizations, particularly Convention of States, to permit public inspection of their
financial records as permitted by law, clearly reflects their political
viewpoint: exclusion of the American people entirely from the COS agenda which is to
assume control of the federal amendatory process and advance their
political goals. Whether reporting the facts of public
the "good name" of Convention of States is up to the
people to decide. The public
records FOAVC presents have been available on the
Internet or obtainable on request since 2010 when COS was formed. Frankly, any allegation by Convention of States
report by FOAVC on the finances of that group is the single factor which will affect the "good name"
COS is ludicrous.
COS/CFA Internet Traffic Records
If Internet traffic is any indication, the American people appear to have already decided about COS/CFA. According to a March, 2017 market analysis by
SimilarWeb, an Internet marketing site, support for
Convention of States wained markedly in the six months previous (Click image left to enlarge). SimilarWeb
tracks monthly traffic for an Internet site and ranks sites according
to their traffic globally, by country and by subject category.
SimilarWeb provides a six month chart showing traffic trends for a
site. Generally the information is used for advertising purposes but the figures
serve equally well to judge the success of a political site. The
figures may also be used to support or refute certain claims made by an
Internet site such as the claim by COS it has two million volunteers meaning two or more million visits to its site.
According to the March, 2017 analysis Convention of States has a global
ranking of 356,979 among the over one billion global Internet sites
and is trending downward. In 80,818,367 United States websites
Convention of States is ranked 87,769 and trending downward. In the category of law and government websites, COS ranks 6,517
among all Internet sites related to law and government and is
Internet traffic to the COS site
has dropped precipitously in the last six months. According to the SimilarWeb report,
in October 2016, the Convention of States site had
400,000 visitors a month. By March, 2017 the number of visitors to the
COS site had dropped to just over 109,000 visitors a month. This translates to a drop in traffic to the COS website of nearly 73 percent. SimilarWeb
does not state why the COS website site has lost nearly three fourths of
its Internet traffic.
The most likely answer is the American public has
rejected the political proposition of COS control the amendatory process
rather than by the American people. Possibly contents of COS tax forms already reported by other websites may have
played a part in this decision by the American people.
In any event FOAVC cannot
be blamed for any affect on the "good name" of COS due to
discussion of their finances because whatever effect such reports may
have had occurred long before this FOAVC report, as indicated by the
date at the bottom of this page, was released. More recent SimilarWeb reports (May, 2017) show the COS site has essentially remained unchanged. As
such any changes in global ranking, United States ranking and law and
government sites ranking is explained, not by an increase in
popularity, but for other reasons such as a drop in total Internet
CFA and COS reports have been modified by FOAVC to the extent of
inserting hand written text showing the month and year of the graph for
purposes of readability).
Internet traffic for Compact for America (May, 2017) while showing
a one month increase in traffic, remains minimal. CFA has a global
ranking of 1,834,885, a United States ranking of 485,161 and ranking in
"News and Media" of 64,032. SimilarWeb apparently does not believe the CFA website has anything to do with law and government.
The COS/CFA Tax Forms--Introduction
As anyone knows who has done his federal income tax return, federal tax law is complex.
This complexity is equally true for tax exempt
organizations such as Convention
of States and Compact for America. The tax forms of COS and CFA were prepared by professional tax preparers who obviously
are expected to know and understand the federal tax law. Federal
tax law is clear however: regardless of whoever fills out the income tax
forms, the person or organization whose taxes are being reported is
responsible for the content of the form. The IRS has a tax form for everything and requires
anyone filing an income tax return of any description complete all required forms fully, correctly and truthfully. Failure
to do this may violate federal income tax law. Whether a violation has
occurred is determined by an investigation conducted by the Internal
Revenue Service. Despite whatever assertions of inapplicability
Convention of States or Compact for America may make regarding federal
income tax, the requirements of the law equally apply them as with any
other American citizen or organization filing federal income tax.
FOAVC claims no special expertise regarding federal income tax law. Like the average American earning $21.62 an hour ($865.00 a week), the average hourly wage according to the April 18, 2017 Bureau of Labor Statistics report,
FOAVC reads the IRS publications and takes the information contained
therein at face value. One thing is clear from reading those
publications: if someone makes a claim involving federal income tax the
IRS requires specific
forms to be submitted in order to substantiate the claim. The IRS
appears to have a form for everything and specific procedures for
processing claims that require submission of specific forms in order to
Under federal law if these processes are not followed or forms not
submitted, the claim is
FOAVC believes it is entirely proper to raise questions about the
records of COS/CFA if for no other reason that, in some instances,
the statements by COS/CFA and the federal tax exemption laws appear at odds. As tax law is difficult to understand,
appropriate in order to explain details of the law, FOAVC has
copies of IRS online publications, website information or tax forms
direct quotes from the IRS about income tax law. We
emphasize raising questions or making comments regarding
expenditures, tax forms
and so forth of COS/CFA does not suggest or imply either organization has
violated federal income tax law. Only an investigation by the Internal Revenue Service can determine that fact.
Nevertheless based on the emails reprinted above it is apparent
these organizations do not want anyone "poking
around" in what they obviously believe is their private business. These
chose to operate under federal tax laws granting them certain tax
advantages in the form of tax exemptions. Part of the price for taking
advantage of those tax
benefits is the requirement to provide
public tax records on request together with other limitations imposed
on them by federal tax law, such as requiring these organizations
present their public information in a prescribed manner. The tax laws
place requirements on
CFA/COS which, when compared to the statements of COS/CFA, raise
questions. The privilege of tax
exemption carries with
it the risk of public inquiry and investigation. If CFA or COS
desired absolute privacy regarding their tax records they
should have elected to remain private organizations and paid their
taxes like everyone else.
FOAVC believes anyone examining
public record who concludes that record presents impropriety are duty bound
citizens to report this belief to the proper
authorities for investigation. Many federal and state government organizations provide easily accessible contacts a citizen may
use bring matters of concern to the attention of the government authority
concerned with that public record. The
Internal Revenue Service, for
example, encourages reporting by citizens
who believe tax improprieties (called "referrals" by the IRS) have
occurred to report these concerns to the IRS (click on image left to
enlarge). The IRS provides several forms which the public may use
to report income tax concerns to the Internal Revenue Service. In the
case of 501(c)(3) and 501(c)(4) tax exempt organizations reporting of
such concerns is accomplished by submitting Form 13909 (click
on image right to enlarge) to the appropriate Internal Revenue Service office shown on the form. The form may be emailed, faxed or mailed to the IRS.
The IRS investigates all referrals sent to it. As prescribed by federal law the
results of these investigations are
confidential. Referrals may be submitted anonymously. Anyone reporting a referral
to the Internal Revenue Service
who provides their name and address will receive a letter of
receipt of the referral but no further information as to the outcome of
the referral. Referrals
regarding tax exempt organizations often are accompanied with throughly
researched and detailed supplements providing the IRS extensive
information about the activities of the organization in question. An
example of a supplement sent the IRS in a referral complaint can be read by clicking on the image left. The example is the only
one FOAVC could find posted on the
Internet and was furnished for illustrative purposes only. FOAVC has no position regarding the information contained within the example supplement.
FOAVC has reprinted all tax information sent to them by CFA and COS.
For purposes of discussion we present extracted
pages from the tax forms or other information in which we may highlight
certain information provided in the tax returns. We have also reached
out to other Internet resources clearly identified in
the information we present. In some instances the material sent us by
CFA and COS is duplicated by these other sources. FOAVC believes in the
case of financial information cross checks are important.
Statements in Rebuttal
Naturally FOAVC invites Compact for America and Convention of States to
respond to our inquiry of their financial records. FOAVC will publish
any response from these organizations on a separate page of this site.
However, such responses must be to the standards established by FOAVC
on its website. To be blunt, neither
CFA or COS has demonstrated any consistent track record regarding
accurate, referenced information. As we have demonstrated elsewhere on this site many of the
political statements made by COS/CFA are easily refuted by public
record raising questions of consistency and accuracy. In
addition, both organizations have ignored public record when such
record contradicts or disproves their political agenda. Such
conveniences are unacceptable to FOAVC particularly in discussing
finances and federal tax law or other laws.
Therefore FOAVC will only publish responses by COS/CFA if they are fully referenced.
We define "fully referenced" as providing documented evidence which
prove the statement made in rebuttal is factually accurate. FOAVC
reminds both organizations that in its original email requesting "all"
public tax records be sent to it, both organizations stated that the
records sent were complete.
Thus, production of "new" tax
records must therefore be viewed skeptically. If it is asserted in
example, that a particular tax form was submitted to the IRS where the
information provided by COS/CFA appears to indicate otherwise, that
form must be produced, permission granted to publish it, together with
all financial evidence related to that tax form including proof the
form or information in question was actually supplied to the Internal
Revenue Service or other appropriate governmental unit.
Further an explanation
as to why the form was not produced when first requested must accompany
the form with the clear understanding this explanation will be
published. If it is asserted a
particular part of the tax code favors or explains an action of the
organization, that code must be cited, quoted and sourced meaning
providing a source whereby the public can examine the reference
independently. A generalized reference, such as referring to an entire
section of the IRS code with the obvious expectation that FOAVC (or the
spend hours sifting through pages of regulation, (with the obvious
expectation few will do this), is unacceptable. The source must be precise and able to be immediately located. If a
ruling permits the action in question, that specific
ruling must be provided, cited and sourced.
Unreferenced, undocumented statements, such as emails stating FOAVC is
incorrect which provide no evidentiary proof, statements made by volunteers online or repeating statements
already asserted in public that do not provide documented evidence,
will not be published. FOAVC will not accept editorial columns,
Facebook or any other social media opinions or statements or excerpts
from the website
of either organization as evidential proof. Such opinions are clearly
political in nature and have nothing to do with the financial or tax
records of either organization. Nor will we accept a generalized link to the organization's website as a whole. We also expect in making its
rebuttal COS/CFA will publish our investigation (in
full) on their website for the purposes of full disclosure. Failure to
do this will cause us to remove any page published on our
site regarding an COS/CFA rebuttal or not publish the rebuttal in the first place.
Access to Tax Records of Compact for America and Convention of States
The tax information for Compact for America and Convention of States
are presented in separate introduction pages. Links to the individual
tax years for each organization are provided on that introduction page.
Concerns and questions associated with the information contained in
that year's tax return will be addressed on the individual tax return
page or on the introduction page. The
introduction pages for each organization can be reached by clicking
either of the following links:
Page Last Updated: 20 AUGUST 2017