[Vision2020] Whose Welfare?

[Art Deco]

  [image: The New York Times] <http://www.nytimes.com/>

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June 3, 2012
Whose Welfare?

Every week the campaign dollars pile up, by the tens of millions, by the
hundreds of millions, to a level never before seen in American political
life. Outside groups now
say<http://dyn.politico.com/printstory.cfm?uuid=0F866DCD-F8DC-436E-B46D-504340FEB315>they
plan to spend $1 billion on behalf of Republicans in the November
election, which will probably be twice the level raised by groups
supporting Democrats. Even the slush-funders of the Watergate era would
have been slack-jawed at the number of seven- and eight-figure checks
pouring into groups with names like Crossroads and Americans for
Prosperity.

The reason for these staggering numbers — and for the growing imbalance
between the parties — is that the vast financial power of the business
world has been loosed as a political tool by the federal courts. In pursuit
of lower taxes and less regulation, businesses, led by the United States
Chamber of Commerce, are determined to remove President Obama from office
and return full control of Congress to the Republican Party. Executives and
companies are the principal source of the unlimited checks that are fueling
the rise of these outside groups.

Many of the executives are giving money to “super PACs,” which have to
disclose their names. But because businesses usually don’t want the public
to know of their political activity, they prefer to launder their political
contributions through the
Chamber<http://www.nytimes.com/2012/05/29/opinion/end-of-the-charade.html>or
through “social welfare organizations,” which can keep the names a
secret.

The law that permits these undisclosed contributions also puts explicit
limits on these organizations’ activities. Tax-exempt social welfare
groups, known by their Internal Revenue Code section number as 501(c)(4)’s,
cannot be organized for the “primary” purpose of political
activity<http://www.irs.gov/charities/nonprofits/article/0,,id=96178,00.html>.
So far, the I.R.S. is looking the other way.

But if not political activity, what is the primary purpose of a group like
Crossroads GPS, the 501(c)(4) organized by Karl Rove, which plans to spend
more than $100 million this year? It has already run at least a dozen ads
this year, 11 of which accuse President Obama of breaking promises or
committing serious policy errors. “Obama added almost $16,000 in debt for
every American,” says the
latest<http://www.youtube.com/watch?v=bcO1AsvcorI&feature=youtu.be>,
a classic in misleading political hyperbole.

As Jeremy Peters recently reported in The
Times<http://www.nytimes.com/2012/05/22/us/politics/new-crossroads-gps-ad-takes-a-soft-shot-at-obama.html?pagewanted=all>,
that ad is part of a $25 million campaign that was based on 18 focus groups
and field tests conducted by Crossroads, all to determine the most
effective attack lines against the president. Is that the action of a
tax-exempt social welfare group not primarily active in politics?

The I.R.S. generally makes that kind of assessment by examining a
501(c)(4)’s activity over a calendar year, so a full reckoning of this
year’s campaign finance travesty won’t happen before 2013. But some of
these groups, including Crossroads, have been operating with the tax
agency’s implicit consent since 2010. Even a cursory audit would show how
little they deserve to call themselves a “social welfare group” and claim a
tax exemption.

Removing the 501(c)(4) exemption would be serious: it would force
Crossroads to either retain its tax exemption by converting to a super PAC
and disclosing its donors, or pay taxes on its tens of millions in
donations. American voters would win either way: they might learn who is
behind those millions, and the disclosure and tax requirements would reduce
the shadowy money pouring into the campaign

If the I.R.S. had stood up to this farce last year, it would have had a
hugely beneficial effect on this year’s campaign. Though it needs more
resources and better legal tools, it mostly requires the will to enforce
the law.


-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com
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