Source: https://blacklistdeclassified.net/link-analysis/academic-research/campaign-finance-bibl/
Timestamp: 2019-04-18 11:19:03+00:00

Document:
There are three IRS organization types which can receive ‘political’ donations: 501(c)3 Charity Organizations, 501(c)4 Social Welfare Organizations, and 527 Political Organizations. They differ in how they are taxed and whether contributions to them must be publicly disclosed. In particular, 501(c)4s do not require disclosure. When the US Supreme Court ruled in th case of Citizens United, it lifted the caps on corporate and other organizational contributions to campaigns but encouraged that legislation be passed to make all organizations, including 501(c)4 Social Welfare organizations, disclose their donors. An attempt was made to pass such legislation (the “DISCLOSE” Act) but it failed by one vote in the Senate, with Democrats voting for disclosure and Republicans voting against it.
With no action on the disclosure front, a record number of organizations (especially Super PACs) wanted to be registered as 501(c)4s, in order to avoid disclosure requirements. At first most of these were Tea Party or other conservative organizations. When the IRS noticed this uptick, they put in place protocols to flag these applications for special scrutiny. The IRS was accused on taking sides politically (remember Lois Lerner?) and the IRS lost the public relations war.
The end result was a huge amount of money flowing into 501(c)4s. At first most new organizations appeared on the Right, but the Democrats soon followed. Many of the ads Americans will see during the 2016 election that are sponsored by organizations with unfamiliar names will likely have been paid for by 501(c)4s. The public and media have no way of knowing who is ponying up the cash. But the candidates know – and they know they are indebted to these sponsors, thus “cronyism” – America’s unique and creative approach to political corruption.
Cross-posted under Intel and Analysis: Deep Background and Episode 3:23 Alexander Kirk – Conclusion.
● “While liberal advocacy groups had pushed for rules on campaign financing and ‘dark money’—political contributions from undisclosed sources—conservatives manufactured a crisis to pressure IRS Commissioner John Koskinen into delaying a transparency rule that would apply to dark money in the 2016 election cycle.
● “The rule the agency had put on hold was intended to mitigate the impact of the Supreme Court’s Citizens United v. Federal Election Commission decision, which permits corporations to spend unlimited funds on political campaigns.
// The discrepancy between the “operated exclusively” standard of the law and the “primarily engaged” language of the regulations has been controversial within the IRS ever since the regulations were enacted in 1959. The IRS revisited the problem multiple times in the 1960s and 1970s, but did nothing. Additionally, since 2011, at least two rulemaking petitions seeking to correct the problem have been filed, with the IRS responding merely that it is “aware” of the issue.
Civil leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes.
[a]n organization is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare of the people of the community. An organization embraced within this section is one which is operated primarily for the purpose of bringing about civic betterments and social improvements.
The source for this information is the watchdog group, Citizens for Responsibility and Ethics in Washington. Here is a link to CREW’s rulemaking petition to the IRS.
The IRS is accepting comments regarding a proposed change in the amount of political activity allowed by “social welfare” organizations, or 501(c)(4)s. If you watch The Last Word with Lawrence O’Donnell, you are familiar with the fact that due to an incorrect interpretation of the Law by those who wrote the IRS guidelines for these organizations, you can run a truck through the definition of a 501(c)(4).
The loose definition of social welfare organizations has allowed very politically organizations such as Tea Party groups & also progressive groups (though less so) to not have to disclose their donors.
There is an IRS category for political groups, 527. These groups must disclose their donors. The proposed changes would greatly limit the amount of political activity allowed by 501(c)(4)s, which would steer political organizations into the 527 category.
The comment period for this proposed change ends Feb 27. So far, most of the comments are from the right wing claiming that the changes will inhibit freedom of speech. This is not true. These groups can simply file as 527s & speak as much as they want.
Senator Schumer and other Senators sent this letter http://is.gd/O5VedQ to the IRS urging these changes be made. With the House under the control of the GOP, no legislative fix is foreseeable. However, another path is being pursued by Senator Van Hollen and CREW to challenge the current IRS interpretation of the statute in court.
But the most promising short term fix is this proposed change to the definition of 502(c)(4)s by the IRS itself. For that, we need progressives to comment on the Proposed Rule to argue our case & offset the onslaught of misguided comments from the right.
These changes are long overdue and do no more than correct the interpretation of a statute requiring that 501(c)(4) organizations be “exclusively” for “social welfare.” Inexplicably, “exclusively” came to interpreted to mean <49%.
Reinstating the meaning of this statute does not infringe on freedom of speech since organizations can simply file as political organizations (527s). Organizations of all political persuasions have flocked to registering as 501(c)(4)s for one reason: to hide the names of their members & contributors. This allows wealthy individuals & organizations to influence political campaigns in secret.
The American people have a right to know who is paying for advertisements & other political information & activities so they can properly understand what vested interests may be involved.
Changing the regulations to comply with the clear statutory intent will go a long way toward restoring transparency in our political processes in a post-CItizens United world. Let political organizations file under 527 instead of 501(c)(4).
Please help with this effort by leaving a comment. It matters. A lot.
Comment: The American people have a right to know who is paying for advertisements & other political information & activities so they can properly understand what vested interests may be involved.
Effective advocacy of both public and private points of view, particularly controversial ones, is undeniably enhanced by group association, as this Court has more than once recognized by remarking upon the close nexus between the freedoms of speech and assembly. De Jonge v. Oregon, 299 U.S. 353, 364; Thomas v. Collins, 323 U.S. 516, 530. It is beyond debate that freedom to engage in association for the advancement of beliefs and ideas is an inseparable aspect of the “liberty” assured by the Due Process Clause of the Fourteenth Amendment, which embraces freedom of speech. See Gitlow v. New York, 268 U.S. 652, 666; Palko v. Connecticut, 302 U.S. 319, 324; Cantwell v. Connecticut, 310 U.S. 296, 303; Staub v. City of Baxley, 355 U.S. 313, 321. Of course, it is immaterial whether the beliefs sought to be advanced by association pertain to political, economic, religious or cultural matters, and state action which may have the [p461] effect of curtailing the freedom to associate is subject to the closest scrutiny….
A requirement that adherents of particular religious faiths or political parties wear identifying armbands, for example, is obviously of this nature.
Compelled disclosure of membership in an organization engaged in advocacy of particular beliefs is of the same order. Inviolability of privacy in group association may in many circumstances be indispensable to preservation of freedom of association, particularly where a group espouses dissident beliefs. Cf. United States v. Rumely, supra, at 56-58 (concurring opinion).
We think that the production order, in the respects here drawn in question, must be regarded as entailing the likelihood of a substantial restraint upon the exercise by petitioner’s members of their right to freedom of association. Petitioner has made an uncontroverted showing that, on past occasions, revelation of the identity of its rank-and-file members has exposed these members to economic reprisal, loss of employment, threat of physical coercion, and other manifestations of public hostility. Under these circumstances, we think it apparent that compelled disclosure of petitioner’s Alabama membership is likely to affect adversely the ability of petitioner and its members to pursue their collective effort to foster beliefs which they admittedly have the right to advocate, in that it may induce members to withdraw from the Association and dissuade others from joining it because of fear of exposure of their beliefs shown through their associations and of the consequences of this exposure.
Yeah, I heard about this case. But it seems to me this is not a matter of freedom of association, but of, basically, money-laundering. Also, the NAACP was concerned about the safety of its members. Kind of a joke in the case of the Tea Party, as the right has all the guns.
But the main difference if that in this case, 501(c)(4)s are being used to hide the source of campaign financing, so that people don’t know, for instance, that oil companies are behind attack ads on candidates in favor of carbon regulation. I hope the preference of donors to remain unseen would not trump the greater need of the people as a whole to be able to make informed decisions about who will represent them.
I believe that SCOTUS in Citizens United did not take a position against disclosure of donors. I don’t know whether they would object to this particular method of disclosure. And it does seem, to me at least, that the law as originally established had one category for political groups & another for social welfare groups, & these simply got muddied when the regulations were written.
During the IRS hearings, both Treasury & the IRS indicated that they believed making adjustments to the regulations was within their jurisdiction. I assume that’s what their lawyers are telling them now.
Let’s start with some basics: in Citizens United, the Court was 8-1 in favor of disclosure when it came to contributors to election-speech efforts. But not everything c4s do — in fact, most of what they do (by law) can have nothing to do with elections — it has to be public policy and social welfare related.
The question is when the information provided by disclosure is more valuable than the donors’ associational interest in privacy. To me, that’s only when the speech is truly election-related, and that’s more a matter for the FEC and Congress than IRS.
The change the IRS is trying to make is simply to change the amount of allowed political activity from its current level (of up to 50%) to a much smaller percentage (say 5%). As the actual statute uses the expression ‘EXCLUSIVELY for social welfare’ it does not seem reasonable that as much as 50% of activity should be allowed to be political. If the change is made, the number & kind of organizations that would qualify to be 501(c)(4)s would be fewer, but these would still be allowed to have members/donors whose identities are protected.
When Congress established this law, it also set up a category for “political organizations,” 527. This group of organizations DOES require disclosure of members/donors. I assume that the courts would not throw out this entire category based on the idea that “political” 527 organizations are ALSO entitled to keep their donors/members’ identities secret.
Then again, knowing our current SCOTUS, they just might.
// Comment: It all comes down to one word: “exclusively.” The law says 501(c)(4)s are to be used for organizations which are “exclusively” for social welfare. One would think this excludes political organizations, which have their own IRS category. For the former, contributors don’t have to be identified. For the latter they do. This controversy is about one thing: preventing the American people from knowing who is buying their government.
The IRS “scandal” is all about tax evasion, servicing the big GOP donors & demeaning & demoralizing a group of devoted public servants.
Should call the IRS & Benghazi Hearings Yellathons.
Slate, David Weigel: New IRS Scandal: Lois Lerner Thought About Doing Something, Then Didn’t Do It http://slate.me/1yQ5RJI //➔ egads!
Hope whatever they want to use for IRS backups isn’t the same they use for zombie – err, “live” – streaming. Horrible transmission!
● “…how dangerous what we do can be” – Lerner; she was right, wasn’t she?
Noted that more & more people becoming self-employed since onset of the Recession.
💙💙Rep Yoder: It’s about not under-staffing, it’s about the tax code! Simplify the tax code & you won’t need more people, you’ll need fewer! Rep Crenshaw: if we had a fair tax, we wouldn’t need the IRS!
NYT: GOP Seeks Investigation of Ex-#IRS Official http://nyti.ms/1mYOJwU ‘A lot of hype,”a very serious matter,’ or ‘bone-headed decision’?
GOP projects Dems as doing what they do: so Issa accuses Obama of using IRS to target “enemies” as he (Issa) himself did w ACORN.
Of 6 “We The People” groups that come up first on google: 1 RW, 3 LW, 1 Indep, 1 Libertarian. IRS targeted groups w this name.
💙 NBC, Benen: A ‘nail in the coffin’ of the IRS ‘scandal’ http://is.gd/EnjJES ‘but the press has moved on…’ Benghazi, anyone?
💙● Crooks&Liars: Secret Groundswell Tape http://is.gd/XucAjq Cath Engelbrecht of TrueTheVote led mtg while claiming “charity” IRS status!
💙● C&L: Secret Groundswell Tape http://is.gd/XucAjq “the IRS had ample reason to believe [TrueTheVote was] a partisan, political group”!
Issue 3. Lerner head of Exempt Unit: why couldn’t she initiate project on “exempt orgs”?
Dkos: Republicans angry at Issa for not exposing IRS ‘scandal’ http://bit.ly/1pCaXBR //➔ Chaffetz angling to replace Issa as Oversight chair?
💙 Corruption, by law, must involve “pecuniary or other advantage.” By this definition, Lois Lerner was not “corrupt.” No quo, baby.
.@GerryConnolly: It’s been a shameful thing under the sham of an investigation. Lois Lerner is invoking her const’l right to plead the 5th.
“Shame, shame,” Democrats called out, as racist Issa ended IRS hearing, refusing to acknowledge Cummings, who went on w/o microphone.
Cummings accuses Issa of “gross mismanagement” of IRS hearings after Issa cuts his microphone. Lerner pled 5th again.
❗House Oversight Committee meeting March 5 at 9:30amET: IRS’s Lois Lerner no longer taking 5th, will testify http://is.gd/lqUE1a @cspan?
● The IRS “scandal” is all about tax evasion, servicing the big GOP donors & demeaning & demoralizing a group of devoted public servants.
💙💙 Senator Angus King (I-ME) to IRS Commissioner: End the Dark Money Game in American Politics (letter) http://is.gd/SgwRVv excellent!
News of Miller’s resignation followed revelations that the IRS has identified two “rogue” employees in the agency’s Cincinnati office as being principally responsible for the “overly aggressive” handling of requests by conservative groups for tax-exempt status, a congressional source told CNN.
💙 @JaySekulow Several unfounded assertions in your testimony. Hysteria ≠ truth. Be grateful MSM has tuned out. Embarrassing.
@JaySekulow Heck, I would have reported TrueTheVote to FBI Tipline if it had occurred to me. Voter suppression.
@JaySekulow It might be a good idea to get someone besides Catherine E to be face of IRS. IT’s obvious why FBI ATF wld be looking at TtV.
@JaySekulow Where in the email to (not from) Lois Lerner does it say anything about Tea Party or conservative groups?
@JaySekulow No one in the admin referred to “two rogue agents.” Check the original CNN reporting.
‘Since we discussed addressing them – 501(c)(4)s – “off plan”‘ – is this ALL?
WSJ (2013): IRS Documents Reveal Agency Flagged Groups for ‘Anti-Obama Rhetoric,’ Big Three Refuse to Report http://is.gd/Ddl69w duh!
💙 JDSupra: IRS Issues Proposed Regulations Regarding Section 501(c)(4) Organizations http://is.gd/Zxe4uy dispassionate ⇇ rare!
TeaParty[.]org: Caddell Bombshell: GOP Establishment Wants the IRS to Go After the Tea Party http://is.gd/YBnKLx //➔ paranoia/fracture?
WSJ: Obama’s IRS ‘Confusion’: New evidence undercuts White House claims about IRS motivation http://is.gd/7sj8PV //➔ no smidgen 4U!
WaPo: Unions, trade assns worried about possible IRS rule changes http://is.gd/aCGnL2 will they next after “social welfare” group changes?
♻🏃💙💙 PublicCitizen Petition: Tell the IRS: Don’t let dark $$$ outfits masquerade as nonprofits http://pubc.it/iRStPy Please sign petition.
♻🏃💙💙 Public Citizen Petition: Tell the IRS: Don’t let dark $$$ outfits masquerade as nonprofits http://pubc.it/iRStPy Please sign petition.
@Auriandra Something new on it?
💙 Investors[.]com: Chuck Schumer Calls For The IRS To Stop The Tea Party http://is.gd/Pxe3Fy by clarifying rules for 501(c)(4)s — yes!

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