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Small Business Group Under Fire on Funding

Democrats challenge NFIB over political group's backing and tax-exempt status.
NFIB CEO and president Dan Danner awards congresswoman Virginia Foxx (R-N.C.) with a Guardian of Small Business award in 2010.
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Amid the countdown this week toward a U.S. Supreme Court ruling on the constitutionality of the Affordable Care Act, a battle has escalated about funding for a small business lobby group.

The National Federation of Independent Business, known as NFIB, was one of the lead plaintiffs in the original legal challenge to the health care reform legislation.

But while the nonprofit, nonpartisan lobby group says it represents the interests of small business owners, some Democrats are raising questions about both its funding sources and its tax status.

The Congressional Progressive Caucus recently wrote a letter to NFIB questioning the group's motives and noting the lobby's ties to "corporate-funded activist groups," the Wall Street Journal reports. In 2010--the same year that NFIB joined the lawsuit against the health care law--the organization received $3.7 million from Crossroads GPS, a Republican campaign fund co-founded by former George Bush presidential aide Karl Rove, according to the Journal.

And the office of Rep. Raul M. Grijalva (D-Arizona) sent a letter to the Internal Revenue Service questioning NFIB's tax-exempt status, the Washington Post notes.

At press time, NFIB had not responded to a request for comment.

On Sunday, a Journal editorial defended NFIB, saying that many small business owners oppose "ObamaCare" and the tax burden it places on companies. The Journal called recent criticism of NFIB was a "smear campaign" and an example of "liberal intimidation."

Last updated: Jun 25, 2012

JOHN MCDERMOTT | Staff Writer

John McDermott is a business and culture reporter whose work has appeared in the Chicago Tribune and Playboy and on AOL.com. He recently moved from Chicago to Brooklyn, New York, to work for Inc.com.




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