ILAG post for Cross.
A nonprofit organization given a $5 million grant from the Ohio legislature posted a public call to vote for the state representative who procured the grant. Such an endorsement is an apparent violation of federal tax law.
The Indian Lake Advocacy Group was granted 501c3 nonprofit status from the Internal Revenue Service on Aug. 5, 2022, and has never handled more than $50,000 a year, according to its federal tax filing. Yet it was given the $5 million grant in the latest state budget courtesy of state Rep. Jon Cross, R-Findlay, who has received more than $18,000 in campaign contributions from ILAG’s chairman, Bud Christman, since 2022.
“Support Jon Cross,” read the post on the ILAG website. “Vote for Jon Cross in the Primary Election on March 19th so he can continue his efforts to secure $5,000,000 for Lake Dredging.” ILAG removed the item from its website after June 28.
Federal law and IRS regulations clearly prohibit such activity.
“Under the Internal Revenue Code, all section 501(c)(3) organizations 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 public office,” the IRS says.
“Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.”
Cross’ generous benefactor
Christman, who owns a marine shop near the lake in north central Ohio, is a major supporter of Cross, who engineered the earmark for ILAG in the state budget. Ohio campaign finance records show Christman held a June 16, 2022, fundraiser for Cross that cost $8234.89 and gave Cross another $5,000 on that date.
State Rep. Jon Cross, R-Findlay
He gave Cross another $5,000 on Sept. 29, 2023.
Cross, who joined Democrats in backing the current Ohio House speaker, Jason Stephens, lost his reelection bid in March by a 66-34 percent margin.
No track record
ILAG and its members support the dredging and weed clearance in Indian Lake in Logan County, Ohio. Created in the 1800s as a feeder lake to the Miami & Erie Canal, the lake is home to a state park run by the Ohio Department of Natural Resources (ODNR).
In recent years, however, Indian Lake has been hit by infestations of invasive weeds that have limited boating and other activities. ODNR has led weed-removal efforts.
The agency has also coordinated dredging in various parts of the lake.
As Cross took credit for procuring the $5 million for dredging, he didn’t explain why he directed the money to a nonprofit group with no track record instead of relying on ODNR, which is already doing the dredging and weed clearance at Indian Lake.
Because ILAG hasn’t raised at least $50,000 in any tax year, it was not required to file detailed tax returns that show how and where it spent the money it raised. So, right now any state or federal agency evaluating its spending would have no way of knowing how it handles its money. If ILAG receives and spends the $5 million, it will have to include greater details in reports to the state and its annual tax filings.
Checks & Balances Project asked the state Office of Budget and Management about how much documentation the recipient of a state grant must provide before and after receiving the grant. It didn’t respond.
C&BP also asked Cross and ILAG for their comments about their activities. They didn’t respond. If they do respond, we will add their comments here.
Ray Locker is the executive director for Checks & Balances Project, an investigative watchdog blog holding government officials, lobbyists, and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.
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