updated 8/31/2006 8:03:01 PM ET 2006-09-01T00:03:01

The NAACP did not violate the conditions of its tax-exempt status when its chairman gave a speech that criticized President Bush, according to a newly released letter from the Internal Revenue Service to the civil rights organization.

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The IRS began looking into the Baltimore-based National Association for the Advancement of Colored People about a month before the 2004 presidential election after a speech by NAACP Chairman Julian Bond that was largely critical of Bush’s policies.

Political campaigning is prohibited under the NAACP’s tax-exempt status.

In a letter, dated Aug. 9, the IRS said a review of video footage of the speech, as well as other information, indicated “that political intervention did not occur.”

Bruce S. Gordon, the president and CEO of the NAACP, said the group was vindicated by the decision.

“It’s disappointing that the IRS took nearly two years to conclude what we knew from the beginning — the NAACP did not violate tax laws and continues to be politically nonpartisan,” Gordon said in a statement Thursday.

In his July 2004 speech at the NAACP’s annual convention in Philadelphia, Bond said of the Bush administration: “They preach racial neutrality and practice racial division. They’ve tried to patch the leaky economy and every other domestic problem with duct tape and plastic sheets. They write a new constitution of Iraq and they ignore the Constitution here at home.”

The civil rights organization said it has a long history of criticizing presidents and their policies and that Bond criticized both political parties during the speech.

“I’ve been a critic of the Bush administration since it began, as I was with the Clinton administration before that,” Bond said.

Relations with White House improve
Relations between the Bush administration and the NAACP have warmed since Gordon took over as CEO in 2005. The president spoke to the NAACP convention this year for the first time in his White House tenure.

NAACP attorneys said the IRS investigation was a “serious threat” to the freedom of nonprofits who may criticize government policies. The group has called the audit a political campaign to silence the organization, a point Bond maintains.

“The information they’ve given us shows that only Republicans have objected,” Bond said.

Documents obtained by the NAACP during the investigation showed at least six Republicans in Congress forwarded letters to the IRS on behalf of their constituents.

IRS officials are prohibited from discussing specific details of tax audits, but a spokesman has said investigations are conducted by career civil servants and not political appointees.

In the IRS letter ending the investigation, an official wrote the NAACP had delayed the audit by refusing to cooperate and provide information.

NAACP officials said they responded but asked for specific information about the accusations that prompted the audit.

“We simply held their feet to the fire, asking them to explain what the process was,” NAACP general counsel Dennis Hayes said. “I would dare stay they still don’t know what the process is.”

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