The Campaign Legal Center’s blog today republished a letter to the editor penned by Paul S. Ryan, the Center’s Senior Counsel. Entitled “The IRS is doing its job—or more accurately—contemplating doing its job after years of dereliction,” the letter responds to an opinion piece published by CCP’s Chairman, Bradley A. Smith, in the Wall Street Journal.
Brad has responded to that letter here, but I write separately to concentrate on the second of Mr. Ryan’s points, and to take a broader view concerning the way words like “political” and “disclosure” are used inconsistently in our national debate about campaign finance regulation.
Mr. Ryan writes:
[D]espite Mr. Smith’s claims, Section 501(c)(4) of the tax code does require organizations claiming tax exemption to be operated “exclusively for the promotion of social welfare.” IRS regulations state explicitly: “The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office.”
The quotes are accurate. But Mr. Ryan’s conflation of the statute and the regulation is misleading. No one disputes that 501(c)(4) organizations must be operated “exclusively for the promotion of social welfare.” What is disputed is what qualifies as social welfare—a term that Congress has never defined.
It is difficult to define the line between advocacy for social welfare and political activity. The IRS, to date, has used a “facts and circumstances” test to determine whether a particular activity is “direct or indirect participation or intervention in political campaigns.” That test, with its innate vagueness, poses an inherent danger of mistaken, ignorant, or partisan judgment calls by non-expert staff. But that danger has been somewhat mitigated by the fact that 501(c)(4)s have been permitted—under the same regulations Mr. Ryan cites—to engage in “political campaigns” provided that doing so is not the organization’s “primary purpose.”
All of this is, admittedly, pretty technical. But, in essence, the IRS has long believed that an organization is operated “exclusively for the promotion of social welfare” (as Congress required) even if it does some political activity. Just not too much.
By alleging “dereliction,” Mr. Ryan presumably believes that (1) the IRS’s draft rule properly delineates the scope of political activity, (2) nothing the draft rule considers political activity is also commensurate with the promotion of social welfare, and therefore (3) no 501(c)(4) group should be allowed to engage in anything the draft rule considers “candidate-related election activity.”
Mr. Ryan helpfully sums things up:
What’s really at stake here is disclosure of money spent by tax-exempt groups on candidate-related election activity. There are no limits on how much these groups can spend on election activity. The question is whether such groups are subject to donor disclosure. The Legal Center sides with the Supreme Court that voters are entitled to know whose money is being spent to influence their votes. Mr. Smith’s Center for Competitive Politics believes in denying voters this crucial information, allowing special interests to dominate our electoral discourse by hiding behind 501(c)(4) tax status.
This does indeed get to the heart of the matter, and of the larger debate about the proper regulation of free speech and free association.
At bottom, the issue is what qualifies as “political activity” and what qualifies as “disclosure.” Those terms have intuitive definitions for most people. But here are a few things the IRS’s draft rules and accompanying notice consider “candidate-related political activity:”
- Any communication to 500 or more people (including a well-attended speech) that mentions the name of a candidate within 60 days of the general election.
- Anything on a group’s website that mentions the name of a candidate, and which was published more than 60 days before the general election, would need to be removed from the website during the 60-day period.
- Any event with attendance of 500 or more people where a candidate appears, even if only for a nonpartisan debate with his or her opponent.
- Any voter guide or voter registration drive or get-out-the-vote effort, even if completely nonpartisan.
- A contribution from one 501(c)(4) group to another would count as “candidate-related political activity” in its entirety if the recipient group does any “candidate-related political activity.” Including any of the examples above.
Can any of these activities be fairly described as involving “money being spent to influence [citizens’] votes?”
This helps illustrate where we at CCP disagree with the folks at the Campaign Legal Center. “Political activity” used to mean ads that said to vote for or against a candidate. And “disclosure” used to mean the disclosure of organizations or individuals paying for such ads. CCP does not object to requiring this type of disclosure for that type of political activity.
But the scope of regulated speech and association keeps expanding. Instead of just ads, states want to regulate 30-odd-page policy papers written by philosophers, and non-partisan voter guides that list every candidate for office on an equal basis. Instead of just communications that say “vote for this person”—or even statements that arguably do that—some groups (and perhaps now the IRS) want to regulate anything that mentions a candidate’s name, regardless of context. And instead of disclosing the organization that made the communication, or the persons who earmarked their money for the communication, “disclosure” is now being used to mean disclosure of the personal information of any person who gave any money to any organization that does anything political (using, of course, the newly-expanded definition of “political”).
Writing two-and-a-half millennia ago, the Greek historian Thucydides noted that in a time of strife and political dislocation “words had to change their ordinary meanings and take those that were given them.” Certainly the politics of the United States cannot be fairly compared to the chaos of the Peloponnesian War. But we should be careful, as a polity, in how we use words. Especially when asking a federal agency to take action on the basis of soothing terms like “disclosure” and “political” that, in practice, lead to far more invasive regulation, and a more restricted civil society, than a non-expert might think.