IRS ASKED TO INTERVENE IN ANWR DISPUTE

IRS Asked to Intervene in ANWR Dispute

By Judy Sarasohn
Thursday, October 25, 2001; Page A29

The Kaktovik Inupiat Corp. and the Native Village of Kaktovik, which support oil drilling on their lands in Alaska, are not happy that the Alaska Wilderness League has been lobbying Congress and encouraging grass-roots lobbying against oil and gas drilling in the Arctic National Wildlife Refuge. So rather than slugging it out on Capitol Hill, the Inupiat Eskimos have gone to the Internal Revenue Service.

The corporation and village say local Inupiat own the surface rights to 92,000 acres within the refuge. So they filed a complaint with the IRS this week, asking the agency to investigate whether the league has been illegally lobbying.

The league is a 501(c)(3) tax-exempt charitable organization, whose ability to lobby is limited under the tax law. Because the group made a "501(h) election" under the law, it may spend up to 20 percent of its revenue on lobbying without jeopardizing its tax-exempt status.

"They've been attacking our stance. We've got to get the IRS to check the league out, that the tax we pay is used right," said Fenton Rexford, president of the Kaktovik Inupiat Corp.

In the complaint, Rexford and village president Isaac Akootchook charge the league "spends nearly all of its time and expends most of its resources on both direct lobbying and grassroots lobbying in clear violation of the requirement that AWL be operated exclusively for educational purposes."

The complaint says that AWL spent almost $15,000 to bring six members of Congress and staffers to Alaska "on a lobbying junket," and that the group urged people to write their lawmakers to bar oil exploration in the Arctic.

"The quality of life for my people depends on continued natural resources development," said Eve Ahlers, chairman of the board for Kaktovik Inupiat Corp.

AWL's executive director, Cindy Shogan, said the group is a charitable organization "that works to educate the public about the values of Alaska's wilderness" and operates within the law.

The group works closely with the Gwich'in Athabascan, who live in 15 villages in Alaska and Canada and oppose drilling in ANWR.

"We have a right to represent the interests of our members who oppose oil and gas drilling in the Arctic National Wildlife Refuge so long as our legislative advocacy activities stay within specified IRS limits," said Shogan, adding that she has not seen the complaint.

The Kaktovik corporation, she said, "either has been misinformed by its friends in the oil industry about the law or it has deliberately distorted the facts in a cynical attempt to intimidate America's conservation groups from working to protect our nation's last great wilderness."

Liz Towne, a lawyer for the Alliance for Justice, which educates nonprofits on how to operate within the tax laws, said it appears the tax complaint against AWL is "being used as a tool of harassment," as has happened with other nonprofits.