Social welfare organization or political party? Why No Labels may need a label

For months, the group No Labels has mounted an aggressive ballot access drive, aiming to put a candidate on the 2024 presidential ballot in as many states as possible. No Labels says it wants to give American voters "a better choice" than what seems increasingly likely to be available from the major parties: a rematch between former President Donald Trump and President Joe Biden.

Though the group has succeeded in obtaining a ballot line in 14 states, critics have raised questions about how No Labels, which is not a political party, plans to run a candidate in the 2024 presidential race.

What is No Labels?

No Labels was founded in 2009 by Nancy Jacobson — the wife of Mark Penn, who was Hillary Clinton's chief strategist on her Senate and first presidential campaigns — as a 501(c)(4) organization. This tax designation means No Labels is a social welfare organization, a group that "may engage in political campaigns on behalf of or in opposition to candidates for public office provided that such intervention does not constitute the organization's primary activity," according to the IRS. Initially, No Labels aimed to unite Democrats and Republicans trying to solve some of Congress' most intractable problems. 

But by 2021 its mission had evolved. No Labels began working on a nationwide ballot access project to "enable the potential nomination of an independent Unity ticket in 2024," its website says. 

In pursuing ballot access in all 50 states and Washington, D.C., No Labels has raised a backlash from Democratic leaders and groups that fear the group's candidate could take votes from President Biden and hand the presidency to Trump. 

Some Democratic members of Congress and groups have also accused No Labels of acting like a political party, despite its tax-exempt social welfare organization status.

No Labels chief strategist Ryan Clancy said that No Labels is not acting like a party because it is "not specifically advocating for or against [a] candidate."  

"A group like No Labels has a right to get on the ballot without being considered a political committee," he said.

But in some states where it has obtained a ballot line, No Labels has already been recognized as a political party. Maine's secretary of state recently recognized it as an official political party early this year after it reached the signature threshold necessary, the state's election commission said. 

William Galston, one of the group's co-founders, told CBS News that he decided to part ways with the movement when its "mission shifted" and started working on its possible independent presidential movement for 2024.

"I decided that this was such an important issue for me that I can no longer in good conscience remain in a fairly senior and visible advisory position inside No Labels," Galston said. 

Two No Labels donors accused group of "bait and switch"

That alleged shift in mission is already the subject of a lawsuit in the New York State Supreme Court. In January, two members of the Durst family, one of New York City's most prominent real estate families, accused the group of a "bait and switch," contending No Labels diverged from its original mission of encouraging bipartisan legislation to pursue a possible 2024 third-party presidential bid. 

The lawsuit says No Labels solicited funds nearly a decade ago pitching "bipartisan activism aimed at achieving common-sense solutions that appeal to the average American." It was a goal that convinced Douglas and Jonathan Durst to donate $145,000 to the group. But the Durst cousins now regret it, claiming No Labels "has lost its way, abandoned its original mission, and fundamentally betrayed its donors' trust in the process." 

No Labels' finances have also been questioned in recent months because its organization as a social welfare organization means it is not required to disclose its donors. Political parties, however, must regularly disclose who their donors are and how much they donated.

The group says it will address this. In a press briefing last year, Clancy said once a campaign with a candidate is announced, No Labels would be "subject to every campaign finance requirement." No Labels spokeswoman Martini clarified that it would be the ticket — the presidential and vice presidential candidate, and not No Labels — that would be subject to campaign finance laws, and the ticket "would be entirely separate from the No Labels 501(c)(4) organization."

When will No Labels announce its presidential candidate? 

No Labels is still considering whether it should proceed with its presidential unity ticket. Clancy says the group should reach a decision on this "somewhere in mid-March." 

Although No Labels has offered scant information about its candidate selection process, it has said it will hold a virtual convention and then announce a nominee. The group has not said who, if anyone, would be eligible to run but has mentioned that the selection process will be conducted by its own members.

Galston believes that although the group claims to be bipartisan, the influence of former Maryland Gov. Larry Hogan over No Labels shows that the group prefers "to put a Republican on the top of the ticket, [rather] than a Democrat." Hogan resigned from the board of No Labels early this year and endorsed GOP presidential candidate Nikki Haley. He announced Friday that he's running for Senate.

Haley was commended by No Labels founding chairman and former independent Sen. Joseph Lieberman as someone who "really deserves serious consideration" when asked by CBS News about putting her at the top of a No Labels ticket. 

"If we decide to put forth a ticket, we'll have full details on exactly how that ticket will be selected," Clancy said. "Our focus is making sure we can just get on the ballot, because that's really everything if you're not on the ballot, this whole discussion is academic," he added. 

Where has No Labels qualified for the ballot? 

No Labels has been able to qualify for the ballot in 14 states so far: Alaska, Arizona, Arkansas, Colorado, Florida, Hawaii, Kansas, Maine, Mississippi, Nevada, North Carolina, Oregon, South Dakota and Utah. 

Clancy says No Labels is expected to be able to obtain ballot access in 32 states because some states will only allow the group to qualify "as a placeholder" for a candidate. 

For this reason, Martini said that regarding roughly dozen and a half states, that it's the candidate who would be pursuing the qualification because of state requirements that there be an actual candidate or because "the ballot access requirement is far less burdensome for the candidate to pursue than for No Labels to pursue without the candidate." She pointed out that in Massachusetts, for example, the state would require 60,000 signatures from an organization like No labels, "but only 10,000 from a candidate."

Thirteen states require a named candidate: Connecticut, Georgia, Illinois, Indiana, Iowa, Kentucky, New Hampshire, New Jersey, New York, Pennsylvania, Virginia, Washington and West Virginia. 

Editor's note: An earlier version of this article mischaracterized a comment made by No Labels chief strategist Ryan Clancy. The article has been updated.