IRS Dark Money Reforms Would Curb Voter Registration, Leave Lobbying Groups Untouched

[brentspeak]

The issue is that dark money groups are exploiting the entire gamut of 501(c) loopholes, but only 501(c)(4) groups are receiving new rules from the IRS.

http://www.thenation.com/blog/177868/irs-dark-money-reforms-would-curb-voter-registration-leave-lobbying-groups-untouched

IRS Dark Money Reforms Would Curb Voter Registration, Leave Lobbying Groups Untouched
Lee Fang on January 10, 2014 - 12:05 AM ET

President Obama could take immediate steps to begin to clean up the dark money problem in American politics. He could, for instance, issue an executive order requiring all government contractors to disclose their contributions to 501(c) advocacy groups, a decision that would impact hundreds of major firms.

Instead, the administration’s response to the flood of dark money in recent elections is a set of new IRS regulations aimed only at addressing some activity taken by 501(c)(4) “issue advocacy” groups. The new rules restrict “participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office.” The rules also restrict C4 organizations from engaging in so-called “candidate-related” communications.

Though put forth with purportedly good intentions, this proposed rule would do little to deter powerful individuals or large companies from engaging in limitless dark money electioneering. The $400 million in undisclosed campaign money spent by the Koch network in 2012, revealed recently by Robert Maguire of the Center for Responsive Politics and Matea Gold of The Washington Post, showed that deep-pocketed donors have been quick to set up 501(c)(6) trade associations, which would not even be impacted by the rules as they stand now. Like 501(c)(4) issue advocacy organizations, 501(c)(6) trade groups may take unlimited donations and engage in unrestricted partisan or election activity. Trade groups are often formed by industry associations or coalitions of like-minded businesses. One of the largest of the new Koch groups, called Freedom Partners, is a 501(c)(6) trade association.

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While certain organizations have been created or expanded in the last two election cycles to exploit the current system for 501(c)(4) nonprofits, namely groups like Americans for Prosperity, Crossroads GPS and, on the Democratic side, Priorities USA, most 501(c)(4) nonprofits are community groups that have little resources and exist to promote genuine nonpartisan advocacy. Under the administration’s new rule, the small 501(c)(4) groups would probably be hurt the most, and at least in the short term, civic engagement will take a hit. The “candidate-related” communications banned in the new rules include nonpartisan voter registration and “get-out-the-vote” drives.