The recent elections point out how corrupting the influence
of 501(C)(4) organizations is. The
organizations are the means of protecting the use of dark money in elections
which cannot be traced to any individual or organization. The IRS was right to investigate applications
for 501(c)(4) organizations; almost everyone involved in them is corrupt and is
corrupting the American elections process.
To qualify under 501(c)(4), an organization must be a nonprofit
organized exclusively for the promotion of social welfare. It is not supposed to be a political advocacy
organization, except to the extent that something like historical preservation
or child welfare might get involved in the political process in order to
further its social aims. It may engage
in lobbying for its cause as its primary activity; however, political
activities may not be the organizations “primary activities.” Presumably this means that political
activities cannot constitute more than 50% of its activities, probably
determined by how it spends its money.
The OpenSecrets.org
web site list the following as the main 501(c)(4) spenders in the 2014 campaign:
Crossroads GPS
|
$26,015,174
|
NRA Institute
|
$10,686,049
|
Patriot Majority USA
|
$10,652,302
|
League of Conservation Voters
|
$9,472,561
|
American Action Network
|
$8,958,129
|
Kentucky Opportunity Coalition
|
$7.573,762
|
Carolina Rising
|
$6,459,252
|
Americans for Prosperty
|
$5,540,280
|
An Ohio
State College of Law article on 501(c)(4)’s states that they must file a
Form 990 with the IRS. While the 990
includes information regarding contributors who give at least $5,000, that
information is not made public. In
discussing the IRS controversy pursued by Congressman Issa, the article says:
When
Congress passed the disclosure provisions in § 527, it required disclosure by
organizations that intervened in political campaigns. Some organizations that
engage in significant political activity have claimed that their activities are
not political but are social welfare activities. If organizations primarily
engaged in political activity are classified as social welfare organizations,
then Congressional intent regarding disclosure will be flouted. Determining the
primary purpose of the organization, therefore, requires the IRS to examine the
political activities of the organizations seeking status as a social welfare
organization and to determine whether those organizations are social welfare
organizations or political organizations.
In discussing the IRS
investigation, the article goes on to say:
It
is very difficult to determine the primary purpose of an organization. The questions
asked of these organizations were clearly designed to try to examine the
organizations’ activities. Obviously, an organization seeking status as a
social welfare organization that is familiar with the legal rules in this area
is not going to state that its primary activity is intervention in a political
campaign. If it did so, it would be a § 527 political organization. The IRS
needs to examine an organization that applies for recognition under § 501(c)(4)
to determine its true purpose. To take an extreme example, if the organization
spent $10,000 on social welfare activities but had 1,000 volunteers who engaged
in campaign intervention activities, the primary purpose of the organization
would likely be political, despite the fact that it spent more money on social
welfare activities. It is understandable how an agent thinking about
investigating an organization would ask these types of questions. It is also
understandable that in the aggregate these questions were unduly intrusive.
The law appears to be
designed to facilitate misuse and thereby contribute to the corruption of
elections. My opinion is that anyone who
uses a 501(c)(4) organization is probably undermining the American electoral
system. It is a bad law and should be
repealed.