In the News
Washington Post: ‘Dark money’ groups don’t need to disclose donors to IRS, Treasury says
By Michelle Ye Hee Lee and Jeff Stein
Nonprofits that spend money to influence elections but are not required to disclose donors to the public – called “dark money” groups by critics – no longer need to share their donors’ names or addresses in their tax filings under a new Treasury rule announced Monday…
Some nonprofits and free-speech advocates have long expressed concerns that the names and addresses may be used by the government to politically target the donors, noting previous scandals that found the IRS targeted tea party and progressive groups.
They also note the risk of donor information being released publicly by accident, either by the IRS or by the nonprofits.
Former IRS commissioner Mark Everson, now vice chairman of alliantgroup, said the agency’s requirement of this donor information was “an extension beyond its normal tax collecting duties.”
In a conference call Tuesday, senior Treasury officials said the new rule would help prevent the improper disclosure of donor information by the federal government.
The Treasury officials also stressed said the move would save thousands of organizations money by reducing their compliance costs and would save the IRS time by reducing paperwork.
“The IRS doesn’t use this information and has no need for this information,” said David Keating, president of the nonprofit Institute for Free Speech, which opposes limits on political speech.
Roll Call: IRS Ruling on Political Donation Reporting Sets Off Campaign Finance Fight
By Niels Lesniewski and Kate Ackley
Even as the new guidance from the IRS will allow some political groups to more easily shield their donors, some of the nation’s biggest lobbying groups, including the U.S. Chamber of Commerce, are calling on lawmakers to go even further.
“We now encourage Congress to take action to remove onerous donor disclosure requirements for tax-exempt organizations that were not covered by this important announcement,” chamber spokeswoman Blair Holmes said in a statement.
Holmes said the chamber applauded Treasury’s move, noting that it “will help ensure that sensitive donor information will not fall into the hands of those who wish to suppress the First Amendment right to free speech.”
Some House Republicans, led by Illinois Rep. Peter Roskam, have introduced legislation that would largely prohibit the IRS from collecting donor information from any nonprofit organization. The Institute for Free Speech, a group that opposes campaign finance restrictions, supports that measure.
“We applaud the Treasury Department and Secretary Mnuchin for its common-sense move to protect the privacy of Americans who give to nonprofits,” the institute’s president, David Keating, said in a statement. “Repealing that requirement will provide even greater protection to Americans’ privacy and freedom of association.”
NPR: Dark Money Groups Get A Little Darker, Thanks To IRS
By Peter Overby
Until now, tax-exempt groups under Section 501(c) of the tax code have had to identify donors of $5,000 or more on their annual tax returns. While the returns are public documents, the donor identifications are redacted when tax returns are made public. But the system isn’t foolproof. About six years ago, the IRS failed to redact the donor list for Crossroads GPS, a leading conservative group at the time.
Under the new rules, 501(c)(3) charities will still have to identify their most generous donors to the IRS, but 501(c)(4) social welfare organizations and 501(c)(6) business associations will not…
The IRS calls the move a “significant reform to protect personal information.” Treasury Secretary Steven Mnuchin said the change “will in no way limit transparency.” …
The new change is a small step in a conservative campaign to repeal disclosures and limits on advocacy money that doesn’t go directly to candidates or political parties. Donor disclosure to the IRS “can easily be abused to suppress First Amendment rights,” said David Keating, president of the anti-regulation Institute for Free Speech.
Daily Caller: Political ‘Dark Money’ Goes Pitch Black In IRS And Treasury Rule Change
By Andrew Kerr
“Americans shouldn’t be required to send the IRS information that it doesn’t need to effectively enforce our tax laws, and the IRS simply does not need tax returns with donor names and addresses to do its job in this area,” Mnuchin said…
“The same information about tax-exempt organizations that was previously available to the public will continue to be available, while private taxpayer information will be better protected. The IRS’s new policy for certain tax-exempt organizations will make our tax system simpler and less susceptible to abuse.”
The move was hailed by conservative groups as a victory for free speech. Conservatives have argued that donor information supplied to the IRS is susceptible to leaks.
“We applaud the Treasury Department and Secretary Mnuchin for its common-sense move to protect the privacy of Americans who give to nonprofits,” Institute for Free Speech President David Keating said in a statement Tuesday. “It has become increasingly clear that the mass collection of this highly personal information is not necessary to enforce tax laws or conduct investigations. Moreover, it can be easily abused to suppress First Amendment rights.”
Their fears aren’t unwarranted – the IRS has leaked confidential nonprofit documents to the public in the past. The identity of major donors to the conservative National Organization for Marriage was leaked to the Human Rights Campaign, a pro-same sex marriage group, from someone within the IRS in 2012. The IRS admitted it wrongfully released the group’s donor information in 2014.
While “dark money” groups are no longer required to disclose the names and addresses of their contributors to the IRS, they will still need to keep records and make donor information available to tax authorities upon request in the event of an audit.
New from the Institute for Free Speech
2018 May Be the Year of the Political Outsider, No Thanks to Campaign Finance “Reform”
By Alex Baiocco
The freedom to exercise First Amendment political rights has been essential to the success of social change movements in this country, particularly for those who have been relegated to the margins of society. The ability to spend money exercising those rights has enabled views originally far outside the mainstream to permeate the national discourse in ways that have had a profound effect on social and political progress in America. And associating with groups and supporters outside the party structure has enabled non-traditional candidates and ideas to have a meaningful impact.
As former Kansas Governor Kathleen Sebelius said in a New York Times article last month, “You can’t wait to be asked because a lot of guys won’t ask you. You have to crash the party and, if there’s an opening, go for it because a lot of the party organizations are run by the old boys.”
So, why hamper the ability of PACs, independent groups, or even wealthy individuals to support candidates that the “old boys” clubs would never support? In Nevada, for example, a female gubernatorial candidate was lifted into contention, in part, by millions of dollars in independent spending from EMILY’s List, after former Senator Harry Reid said she didn’t have a chance…
If proponents of greater speech regulation are successful, they risk further stifling the ability of outsiders and non-traditional candidates to run for and win elected office. Those who believe that First Amendment-protected activities, such as associating with groups, raising funds, and spending money on political campaigns must be restricted for new ideas and candidates to have a chance should have some faith in the ability of voters to think for themselves. Let’s let candidates get their messages out and associate with other citizens however they choose. Voters will decide the rest.
Supreme Court
Cincinnati Enquirer: McConnell: Far-left scare tactics won’t stop Kavanaugh’s confirmation
By Senate Majority Leader Mitch McConnell
Judge Kavanaugh possesses the qualities and qualifications that the American people deserve in a Supreme Court justice. He has outstanding academic credentials, with undergraduate and law degrees from Yale, and over a decade of experience on the nation’s most consequential federal appellate court, the D.C. Circuit Court of Appeals. He possesses an exceptional legal mind and an even-handed temperament. And his record reflects a clear understanding of a judge’s role in our republic: Not to make policy or impose personal preferences, but to begin with the facts of each case and interpret our laws as they’re written.
We’re already hearing from far-left special interests – and even some of my own Democratic colleagues – who seem to lack that understanding. They talk as though evaluating judges means ordering off a menu of predetermined policy outcomes. They want Judge Kavanaugh to support some precedents of the Supreme Court – but not others. And they want members of the Judiciary Committee to grill him to see if he will commit, under oath, to rule the way they want on certain issues – before he even takes his seat on the court.
To even suggest such an inappropriate approach betrays deep confusion about our constitutional order. It contradicts the wisdom of past nominees, like the explanation by Justice Ruth Bader Ginsburg in 1993 that offering any “forecasts” or “hints” as to how a judicial nominee might rule would “show not only disregard for the specifics of the particular case [but also] disdain for the entire judicial process.”
The Courts
By Ken White
Judge Walter explained that circumstances had now changed: he now knew how the plea agreement got out, had determined that it wasn’t through misconduct by the press, noted that the government and defense had now had the opportunity to protect the defendant and his family, and noted that the information was now public. He therefore denied the request for a longer-term order and vacated his prior order, and said the Times could print what it wanted. But he didn’t leave it without harsh criticism of the Times. He suggested that the reporter should have waited for an order from him rather than running the story once she heard the defense protest that the plea agreement should have been under seal. He suggested the Times was wrong to run information about a document that it knew was intended to be under seal – he described it as “exploiting an honest mistake by a docketing clerk.” …
So the Los Angeles Times won, as it should have. But it should never have been subjected to the order in the first place. There was no legal basis for it. The standard the Court articulated – that the danger was “great and certain” – is not the law and not remotely plausible. Prior restraint would only be permissible if there were a compelling government interest and the restraint were necessary to protect that interest and the restraint was the least restrictive means to protect the interest. It wasn’t. As Ms. Sager pointed out, the correct response to a fear for Balian’s safety was to physically protect him, not to stop people from talking about his cooperation…
It’s good that Judge Walter vacated his order. But it’s unacceptable that he issued it in the first place, and unbecoming and regrettable that he blasted the press for printing important information about a federal case.
Electronic Frontier Foundation: Hearing Thursday: EFF Asks Court to Block Enforcement of FOSTA While Lawsuit Proceeds
On Thursday, July 19, at 4 pm, the Electronic Frontier Foundation (EFF) will urge a federal judge to put enforcement of FOSTA on hold during the pendency of its lawsuit challenging the constitutionality of the federal law. The hold is needed, in part, to allow plaintiff Woodhull Freedom Foundation, a sex worker advocacy group, to organize and publicize its annual conference, held August 2-5.
FOSTA, or the Allow States and Victims to Fight Online Sex Trafficking Act, was passed by Congress in March. But despite its name, FOSTA attacks online speakers who speak favorably about sex work by imposing harsh penalties for any website that might be seen as “facilitating” prostitution or “contribute to sex trafficking.” In Woodhull Freedom Foundation v. U.S., filed on behalf of two human rights organizations, a digital library, an activist for sex workers, and a certified massage therapist, EFF maintains the law is unconstitutional because it muzzles constitutionally protected speech that protects and advocates for sex workers and forces speakers and platforms to censor themselves.
IRS
Reuters: U.S. Treasury moves to protect identities of ‘dark money’ political donors
By Reuters Staff
The U.S. Treasury said on Monday that it will no longer require certain tax-exempt organizations including politically active nonprofit groups, such as the National Rifle Association and Planned Parenthood, to identify their financial donors to U.S. tax authorities.
The policy change, heralded by conservatives as an advance for free speech, maintains donor disclosure requirements for traditional charity groups organized to receive tax-exempt donations under a section of the Internal Revenue code known as 501(c)(3), the Treasury said.
But the move frees labor unions, issue advocacy organizations, veterans groups and other nonprofits that do not receive tax-exempt money from meeting confidential disclosure requirements set in place decades ago.
“Americans shouldn’t be required to send the IRS information that it doesn’t need to effectively enforce our tax laws, and the IRS simply does not need tax returns with donor names and addresses to do its job in this area,” U.S. Treasury Secretary Steven Mnuchin said in a statement…
The issue of the IRS’s handling of nonprofit political groups exploded into headlines several years ago when the federal tax agency was found to have targeted tax-exempt political groups aligned with the conservative Tea Party movement for greater scrutiny.
The Media
National Review: Apparently, Only Conservatives Spend Money on Politics
By Charles C. W. Cooke
Here’s the headline on CNN’s story:
NRA and some other nonprofits will no longer need to identify their donors to the IRS
And here’s the opening to the piece:
Some nonprofit groups will no longer have to give the IRS the names of donors who give them $5,000 or more.
Among the groups that will no longer have to report donors are the National Rifle Association, various chambers of commerce, and groups focused on particular issues, such as Americans for Prosperity, which has been closely associated with the Koch brothers. But the ruling also applies to groups like the NAACP, labor unions and volunteer fire departments.
What’s the “but” doing there? The change applies to every single 501(c)(4) in America….
The New York Times’s story has a similar headline:
I.R.S. Will No Longer Force Kochs and Other Groups to Disclose Donors
The Times notes that “varied” groups will benefit from this change, which is true. But the “varied” groups given as examples are “arms of the AARP, the United States Chamber of Commerce, the National Rifle Association and Americans for Prosperity, which is funded partly by the billionaire brothers Charles and David Koch.” Gosh, what a range! They must have been plucked from the air . . .
USA Today’s story sits under the headline, “Trump administration won’t force NRA, Kochs to disclose donors to IRS,” and starts like this:
The Trump administration will no longer force some tax-exempt organizations, including politically active groups such as the National Rifle Association, to identify their contributors to federal tax officials.
The States
Arizona Capitol Times: Court rules Clean Elections measure to be on November ballot
By Howard Fischer, Capitol Media Services
Arizona voters who want to preclude publicly funded candidates from buying services from political parties also will have to vote for new limits on the powers of the Citizens Clean Elections Commission to get that change.
And vice versa.
In an extensive ruling Monday, Maricopa County Superior Court Judge Teresa Sanders rejected arguments by supporters of the commission that it’s illegal to put voters in the position where they have to support both changes just to get the one they want – and even if they don’t like the other one.
Sanders acknowledged that the Arizona Constitution does have a requirement for changes in that document to be presented to voters as separate proposals. But the judge noted that the two changes the Republican-controlled Legislature wants voters to approve are statutory, not constitutional.
“If the framers of the Arizona Constitution had intended that statutory amendments submitted by either initiative or referendum be subjected to a separate amendment restriction, they could have done so,” she wrote. “They did not.”
Attorney Danny Adelman who represents Louis Hoffman and Amy Chan, two former members of the Citizens Clean Elections Commission, said he will ask the Arizona Supreme Court to intercede.
New York Times: Who Needs Small Donors When You Have Friends? Ask Gov. Cuomo.
By Shane Goldmacher
Gov. Andrew M. Cuomo has always been a big-money politician, relying on large benefactors to accumulate a $31.1 million war chest. But even as he emerged as one of the Democratic Party’s most prolific fund-raisers, he has all but ignored grass-roots contributors.
Now, mindful of the party’s insurgency, and facing a vigorous primary challenge from Cynthia Nixon, Mr. Cuomo has raced to find small donors.
He has offered a chance to win Billy Joel tickets. His daughters emailed supporters to ask for $5. And he has invested in a raft of digital ads and advertised an unlimited-drinks happy hour in Manhattan for only $5, though the format had to be scotched to avoid running afoul of state rules.
But campaign disclosures on Tuesday revealed the extent to which Mr. Cuomo remains dependent on big donors – and some of the maneuvers undertaken to obscure that fact.
One donor contributed 69 times to Mr. Cuomo in the final days before the deadline – 67 of them $1 donations, driving down his average donation size. The donor, Christopher Kim, shares the same address on his filing as one of Mr. Cuomo’s campaign aides, Julia Yang…
But Mr. Kim was just one in a line of aides, relatives, roommates, allies, appointees and lobbyists sprinkled through Mr. Cuomo’s filing, giving tiny sums like $1 and $5.
