In the News
Washington Post: IRS review of nonprofits and advocacy (LTE)
Allen Dickerson
While the law says that such nonprofits must be operated for social welfare purposes, it does not bar political activity. Nor have the IRS or the courts suggested that merely engaging in political activity confers a “private benefit.”
Congress banned charities from candidate advocacy but said that “Section 527” groups must spend a majority of their funds on politicking. This leaves a middle ground for groups such as 501(c)(4)s to spend some, but not a majority, of their expenditures this way. Otherwise, groups spending no money, or all of their money, on political advocacy would be tax-exempt, but groups that spend only a little would be taxable corporations. That would be absurd.
Ms. Galston made an argument for changing the law, but only Congress may do that. The commissioner got the law right.
CCP
CCP Study Shows IRS “almost universally hostile towards nonprofits” for decades
Hayward concludes the paper urging readers to “draw several lessons from this history. First, the Internal Revenue Service, while effective at raising revenue, is a poor agency to task with regulating advocacy organizations, especially those that cannot offer donors a tax deduction. Only trivial amounts of revenue are at stake. Whether a certain message, or viewpoint, or advertisement, or tone is proper should not be a concern of the tax man. Second, Congress must resist the temptation to even political scores through tax legislation. Not only is it poor governance, but it rarely works. Finally, the courts should remain vigilant in protecting groups from Service overreach and congressional mischief. While it remains a canard of legal analysis that nobody has a right to avoid paying taxes, in this context – again – revenue is not the issue. Courts should feel free to identify and excise laws, even tax laws, which abridge political freedoms.”
Supreme Court
National Journal: John Roberts: First Amendment Champion*
Sam Baker
If you’re trying to win a First Amendment case at the Supreme Court, your best bets are to be really political, or really offensive.
And if you lose Chief Justice John Roberts, you almost certainly will lose your case.
In the 10 years since he joined the Court, Roberts has established himself as the central arbiter of important First Amendment issues. By a long shot, Roberts writes more of the Court’s free-speech decisions than any of his colleagues. And even when he doesn’t write the rulings, he always is in the majority—literally. Roberts is the only justice who has never been in the minority on a major free-speech case.
Washington Post: Q&A with Washington Post Supreme Court reporter Robert Barnes
James Hohmann
The other is that Roberts wrote the court’s opinion (Williams-Yulee v. Florida Bar) upholding a Florida prohibition on judicial candidates personally asking for campaign contributions. Just about every question and comment he made during oral arguments pointed in the other direction. It is a good reminder that those sessions are not always predictive.
Disclosure
Washington Free Beacon: Coal Town Liquor Stores Pull Craft Brews Over Support for Green Group
Lachlan Markay
“Craig is a coal mine town,” Lori Gillam, one Craig, Colo., liquor store owner, told a the Craig Daily Press. “We pulled those beers because their support of WildEarth Guardians … who said their ultimate goal is to shut down coal mines.”
Gillam’s liquor store, Stockmen’s, pulled several beer brands from its shelves, including the popular Fort Collins-based New Belgium, over their support for the group.
New York Times: Corporations Open Up About Political Spending
Eduardo Porter
In March, the state comptroller for New York, Thomas P. DiNapoli, announced that the New York State Common Retirement Fund, which owned some $20 million worth of the shares of United States Steel, had persuaded the company to publicly disclose its corporate political contributions.
It was not the first. Twenty-eight public companies — including major corporations like Comcast and Delta Air Lines — have adopted or agreed to adopt political spending disclosure procedures since New York’s fund started pressing the case five years ago, after the Citizens United ruling.
FEC
Wall Street Journal: Weak Internet Security Leaves U.S. Elections Agency Vulnerable to Hackers, Reports Find
Brody Mullins and Rebecca Ballhaus
Weak Internet-security measures at the Federal Election Commission could impair the agency’s ability to carry out one of its primary missions: making information about who is funding U.S. elections available to the public.
The FEC hasn’t implemented improvements that were recommended after a series of attacks on its website—including at least one successful hack—leaving it vulnerable to future breaches, according to three previously unreported internal reports.
The Hill: Fixing the FEC
Brad Crate
“Federal Election Commission Chair Ann Ravel recently described the state of the FEC as “worse than dysfunctional.” A lot of the discussion surrounding the Federal Election Commission’s dysfunction revolves around purported partisan gridlock among the agency’s six commissioners. This ignores operational problems, that if fixed could go a long way in making the agency more effective, relevant, and true to the spirit and letter of campaign finance law.
More Soft Money Hard Law: “Desperate” at the FEC, Part II: The Risks of Unintended Consequences
Bob Bauer
The procedural question of whether the Commissioners can participate at all in votes on their own rulemaking comes into play here. If there is a question of recusal, then they will have turned the decision over to a four-person commission, three of whom are members of the opposite party that they have charged with systematically refusing to enforce the statute.
Commissioners Ravel and Weintraub would take the view that the Commission can act only by majority vote and that their recusal would have no practical effect: if the third Commissioner on the Democratic side (who is an Independent) votes as they would, their own votes would not make a difference. A 3-1 vote is no more a ”decision” than a 3-3. Not all, however, agree with this view: Brad Smith has argued that a 3-3 is a decision.
Independent Groups
Campaigns and Elections: It’s PAC Season: Time to put the firewall up, attorneys say
Sean J. Miller
The full legal implications of campaign-Super PAC coordination will be felt this week when a former Republican consultant is sentenced in a federal courtroom in northern Virginia.
Even before Tyler Harber’s sentenced in the first criminal prosecution of illegal coordination, the consulting industry has reacted. Firms doing PAC and campaign work increasingly are installing office firewalls to stop the spread of proprietary information between assigned employees.
Newton Daily News: New Iowa group to push campaign finance reform
Associated Press
The organization, called “Iowa Pays the Price,” was set to officially launch Tuesday. The effort is being chaired by Democrats, Republicans and an independent and is funded by Issue One, a national group also focused on similar issues.
Co-chair Brad Anderson, a Democrat who ran unsuccessfully for secretary of state last year, said the group plans to spend about $500,000 on an educational campaign that will include social media and online videos. They will be working with a research group called MapLight to produce reports on political money spent in Iowa, where the presidential caucuses are tentatively set for February 2016.
The States
Wisconsin Watchdog: John Doe reform bill stuck in legislative waiting game
M.D. Kittle
While both Assembly and Senate judiciary committees have approved a reform measure that would bring accountability to the law and the criminal justice agents who employ it, the waiting game has begun for a floor vote.
State Rep. David Craig, R-Town of Vernon, who has helped lead the reform effort, said he doesn’t expect floor action until after the Legislature completes work on the biennial budget and after the state Supreme Court rules on the consolidated cases before it challenging a political John Doe investigation into Gov. Scott Walker’s campaign and dozens of conservative activist groups.
Decatur Daily: Legislation puts more enforcement in campaign finance reporting laws
Mary Sell
One benefit of the legislation is there now will be a non-partisan entity — the Alabama Ethics Commission — that can give opinions about the laws and compliance questions, Orr said.
His bill gives the ethics commission the power to interpret and enforce campaign finance laws, issue advisory opinions, issue penalties for inaccurate reports and hear appeals of penalties levied by the Alabama secretary of state or local probate office.
