![\"david-brock\"](\"http:\/\/www.thecitizensaudit.com\/wp-content\/uploads\/2016\/09\/David-Brock-1024x666.jpg?ab89ad\")
<\/p>\nAndrew Kerr
\nThe Citizen Audit<\/p>\n
<\/p>\n
David Brock, recently described by Politico<\/a> as \u201cthe Democrats\u2019 dark-arts master,\u201d has some explaining to do.<\/p>\n His organization, Media Matters for America, has failed to report to the IRS over $1 million in sublet rental income from 2010 to 2014.<\/p>\n David Brock and his allies are most likely pocketing that money for themselves.<\/p>\n The 13 organizations are documented in a previous report<\/a>.<\/p>\n Media Matters holds the lease to the 6th floor of 455 Massachusetts Avenue NW in Washington D.C, and the other organizations sublease space from Media Matters.<\/p>\n For example, here\u2019s a rent payment American Bridge 21st Century made to Media Matters<\/a> in 2014.<\/p>\n There\u2019s nothing wrong with over a dozen organizations sharing office space, but there\u2019s a lot wrong with how Media Matters fails to report\u00a0their sublet rental income to the IRS.<\/p>\n Audited\u00a0financial statements for Media Matters from 2007 to 2014 can be found in the Massachusetts non-profit document search database<\/a>\u00a0using the following credentials:<\/p>\n <\/p>\n In comparison to Media Matter\u2019s IRS form 990 annual returns, these financial statements provide\u00a0much<\/em> more insight into how Media Matters operates.<\/p>\n By comparing these two sets of documents, we discovered how David Brock and his allies are\u00a0pocketing sublet rental income.<\/p>\n This report will focus on fiscal year 2014. Media Matters is claiming two separate values for occupancy expenses in 2014.<\/p>\n To the IRS, Media Matters is claiming:<\/p>\n In their financial statements, Media Matters is claiming:<\/p>\n <\/p>\n Media Matters reported to the IRS<\/a> in 2014 that their \u00a0occupancy expenses were\u00a0$924,454.<\/p>\n IRS instructions<\/a>\u00a0state \u201cDo not net any rental income received from leasing or subletting rented space<\/strong> against the amount reported on line 16 for occupancy expenses.\u201d<\/p>\n <\/p>\n However, Media Matters\u2019 2014 financial statements show that the reported occupancy expenses of $924,454\u00a0includ<\/em><\/strong>es\u00a0<\/strong><\/em>net of sublease income of approximately $290,000.<\/p>\n This means\u00a0that Media Matters broke IRS guidelines.<\/p>\n Already, this uncovers a\u00a0massive discrepancy.<\/p>\n Only one of these can be\u00a0true.<\/p>\n Well, Media Matters didn\u2019t report any sublet rental income to the IRS in 2014.<\/p>\n The IRS provides two options<\/a> in regard to reporting sublet rental income.<\/p>\n As we can see below, Media Matters reported $0 in both fields in their 2014 IRS form 990<\/a>.<\/p>\n <\/p>\n This is the most likely scenario:<\/p>\n Why is this the most likely scenario?<\/p>\n $1,214,454\u00a0<\/strong>is an unrealistic amount for occupancy expenses in the building Media Matters operates out of.<\/p>\n 455 Massachusetts Avenue NW is a 12 floor, 242,366 square feet<\/a> office building. \u00a0This amounts to an average of 20,197 square feet per floor.<\/p>\n General Services Administration, a government organization, signed a 10 year lease<\/a> in 2009 for the entire 5th floor<\/em> of 455 Massachusetts avenue (22,432 square feet).<\/p>\n GSA\u2019s lease for the 5th floor is\u00a0$942,021\u00a0<\/strong>per year. The lease agreement makes no mention of an escalation clause, and includes<\/strong> operating expenses and real estate taxes.<\/p>\n Also in 2009, Media Matters signed a 10 year lease for the entire 6th floor<\/em> of 455 Massachusetts Avenue NW.\u00a0However, they claim to spend a lot more in rent than GSA.<\/p>\n Furthermore, Media Matters specifies that\u00a0this amount\u00a0does not\u00a0<\/em><\/strong>include operating expenses and real estate taxes.<\/p>\n <\/p>\n It just doesn\u2019t make sense. Media Matters pays over $270,000<\/strong>\u00a0more\u00a0<\/strong>than GSA, despite the fact\u00a0that both organizations own the same amount of floor space, and Media Matters\u2019 lease\u00a0doesn\u2019t\u00a0<\/strong>include operating expenses and real estate taxes.<\/p>\n Media Matters is paying\u00a0so much more<\/em>, yet getting so much less<\/em> than GSA.<\/p>\n It doesn\u2019t add up.<\/p>\n Unless Media Matters can produce a\u00a0lease agreement for our review, it\u2019s safe to assume that\u00a0their lease is comparable to GSA\u2019s at around\u00a0$924,000\u00a0<\/strong>per year.<\/p>\n It appears that Media Matters is being truthful to the IRS when it claims it\u2019s 2014 occupancy expenses were\u00a0$924,454.<\/strong><\/p>\n But Media Matters is lying\u00a0to the IRS when they claim to collect\u00a0$0<\/strong> in sublet rent income in 2014.<\/p>\n Make no mistake, Media Matters is receiving rental payments. Here\u2019s a rent payment from American Bridge 21st Century to Media Matters<\/a> in 2014.<\/p>\n Media Matters is artificially increasing occupancy expenses\u00a0in it\u2019s financial statements, then \u2018buying down\u2019 by netting sublet rent income.<\/p>\n But IRS instructions prohibit organizations from \u2018buying down\u2019 occupancy expenses by netting sublet rent income.<\/p>\n The truth is,\u00a0David Brock and his allies are most likely pocketing the sublet rent income for their own personal use.<\/strong><\/p>\n Every year since 2010, Media Matters has reported $0 to the IRS in sublet rent income.<\/p>\n But Media Matters reports a significant amount of sublet rent income in their\u00a0financial statements:<\/p>\n Total:\u00a0$1,052,500\u00a0<\/strong>in sublet rent income hidden from the IRS.<\/p>\n See for yourself\u00a0by comparing Media Matters\u2019 IRS form 990s<\/a> and their financial statements found in Massachusetts non-profit document search database<\/a>.<\/p>\n American Bridge 21st Century sublet office space<\/a> from the American College of Preventative Medicine in early 2014.<\/p>\n The ACPM operates out of the 2nd floor of 455 Massachusetts Avenue NW, and collected $8,920 in sublet rent payments from American Bridge in 2014.<\/p>\n <\/p>\n In it\u2019s 2014 IRS form 990<\/a>, the ACPM demonstrates how to correctly report sublet rental income:<\/p>\n <\/p>\n This\u00a0is the final nail in the coffin for Media Matters. They have no wiggle room left. It should be clear now that Media Matters is lying to the IRS by failing to report sublet rent income.<\/p>\n This situation is strikingly similar to how Al Capone was convicted of income tax evasion<\/a>.<\/p>\n Al Capone was hiding income from the IRS. Media Matters is hiding income from the IRS.<\/p>\n It\u2019s that simple.<\/p>\nMEDIA MATTERS SHARES OFFICE SPACE WITH 13 SEPARATE ORGANIZATIONS<\/h4>\n
FINANCIAL STATEMENTS FOR MEDIA MATTERS<\/h4>\n
![\"media-matters-massachusetts\"](\"http:\/\/www.thecitizensaudit.com\/wp-content\/uploads\/2016\/12\/Media-Matters-Massachusetts.jpg?ab89ad\")
<\/p>\nHERE\u2019S WHAT\u2019S HAPPENING<\/h4>\n
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HERE\u2019S HOW<\/h4>\n
![\"media-matters-2014-occupancy\"](\"http:\/\/www.thecitizensaudit.com\/wp-content\/uploads\/2016\/12\/Media-Matters-2014-Occupancy.jpg?ab89ad\")
<\/p>\n![\"net-of-sublease-income-2014\"](\"http:\/\/www.thecitizensaudit.com\/wp-content\/uploads\/2016\/12\/Net-of-Sublease-Income-2014.jpg?ab89ad\")
<\/p>\n\n
WHAT HAPPENED TO THE $290,000 IN SUBLET RENT INCOME?<\/h4>\n
\n
![\"media-matters-reported-rental-income\"](\"http:\/\/www.thecitizensaudit.com\/wp-content\/uploads\/2016\/12\/Media-Matters-Reported-Rental-Income.jpg?ab89ad\")
<\/p>\nHOW MUCH DID MEDIA MATTERS REALLY PAY FOR OCCUPANCY?<\/h4>\n
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\n![\"media-matters-operating-lease\"](\"http:\/\/www.thecitizensaudit.com\/wp-content\/uploads\/2016\/12\/Media-Matters-Operating-Lease.jpg?ab89ad\")
<\/p>\n![\"media-matters-future-payments-2010\"](\"http:\/\/www.thecitizensaudit.com\/wp-content\/uploads\/2016\/12\/Media-Matters-Future-Payments-2010.jpg?ab89ad\")
<\/p>\nMEDIA MATTERS IS PAYING A LOT MORE THAN GSA FOR RENT, DESPITE THE FACT THEY OPERATE IN THE SAME BUILDING AND LEASE THE SAME AMOUNT OF FLOOR SPACE<\/h4>\n
WHAT IS MEDIA MATTERS DOING WITH THE SUBLET RENT INCOME?<\/h4>\n
HOW MUCH HAS DAVID BROCK\u00a0AND HIS ALLIES POCKETED THROUGH THIS SCHEME?<\/h4>\n
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HOW DO WE KNOW FOR SURE MEDIA MATTERS IS BEING DISHONEST IN ITS IRS FORM 990S?<\/h4>\n
![\"american-college-rent-payment\"](\"http:\/\/www.thecitizensaudit.com\/wp-content\/uploads\/2016\/12\/American-College-Rent-Payment.jpg?ab89ad\")
<\/p>\n![\"correct-sublet-income-reporting\"](\"http:\/\/www.thecitizensaudit.com\/wp-content\/uploads\/2016\/12\/Correct-Sublet-Income-Reporting.jpg?ab89ad\")
<\/p>\nBIRDS OF A FEATHER FLOCK TOGETHER<\/h4>\n
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WHAT\u2019S NEXT?<\/h4>\n