In the News
Wall Street Journal: The Latest IRS Power Grab
By Bradley A. Smith
In the 1976 Buckley v. Valeo case, however, the court carved out a narrow exception, allowing the government to compel the disclosure of information about donors to groups controlled by political candidates and parties, or that have the primary purpose of engaging in political campaigns. But the court also defined political activity narrowly, to include only the express advocacy for the election or defeat of a candidate. The ruling specifically did not include the discussion of candidates and issues as a political-campaign activity.
None of this was perceived as a major problem so long as the 501(c)(4) category was dominated by the political left. Beginning in the 1990s, however, and especially since 2010, organizations that were more conservative began using the 501(c)(4) category to engage in public education as well as political activity, thus challenging liberal dominance in nonprofit advocacy.
In response, the left has attempted to silence conservative 501(c)(4)s by unveiling and harassing their donors. This has included boycotts of businesses—such as Coca-Cola and Wendy’s—that contribute to free-market causes and candidates, and of businesses whose employees gave to such candidates and causes. It has included harassment, threats and vandalism aimed at conservative donors and churches, particularly in California during the campaign over the Proposition 8 initiative to bar same-sex marriage.
Washington Times: The overstated sway of campaign funds
By Eric Wang
“I don’t care too much for money; money can’t buy me love.” So goes the refrain in the classic Beatles hit. The Fab Four were wise beyond their years, and their wisdom could fairly be applied to the perpetual debate about the effect of money on American politics. As the evidence tends to show, not only can’t money buy love, it can’t buy elections or policy outcomes, either.
The recent government shutdown is a perfect case in point. Both The New York Times and The Washington Post expressed wonderment at how congressional Republicans had bucked the wishes of corporate executives and business groups, who had decried the effects a shutdown would have on companies’ bottom lines. “Businesses … spurned” by the GOP, The Post’s headline blared, while The Times declared a “loss of sway” for Corporate America. According to the media’s narrative, these supposed patrons of the Republican Party had spent millions of dollars to elect politicians who would do their bidding, and all of that spending was for naught.
Law 360 (Subscription): Godfather of Super PACs Blasts IRS Rules for Nonprofits
By Drew Singer
Law360, New York (December 06, 2013, 3:28 PM ET) — The nonprofit group behind the creation of super PACs on Thursday criticized proposed regulations that threaten the tax-exempt status of politically active nonprofits, calling the rules a violation of free speech.
The group’s 18-page comment letter was in response to rules the IRS proposed last week. Under those rules, political activity conducted on behalf of specific political candidates won’t count as a social welfare-related activity, threatening the tax-exempt status of many nonprofit organizations.
Politico Morning Tax: CCP SUBMITS OWN PROPOSAL FOR NONPROFIT REGULATION OVERHAUL
Instead the Center for Competitive Politics, a progressive group, suggests the IRS align its qualifications for 501(c)4s with the Federal Election Commission. “[T]his straightforward approach offers real clarity without dragging the IRS further into the thicket of political regulation, a tangle from which it — and the Service’s reputation for the neutral, nonpartisan collection of revenue — may never recover,” the comments said.
CCP
No Good Speech Unpunished: New Model Regulations Would Muzzle Charities’ Speech
The Coalition for Accountability in Political Spending (CAPS) recently proposed “Model Regulations” which, if adopted, would seriously burden the ability of charities and other nonprofit organizations to engage in their important work. CCP analyzed these Model Regulations, and identified four serious problems, which should concern anyone who values constitutional government and fundamental First Amendment freedoms.
First, the Model Regulations confuse speech about issues (which is robustly protected by the First Amendment) with speech about political candidates, which can be subject to greater regulation. It has been settled law since the Supreme Court’s 1976 Buckley v. Valeo decision that issue speech does not present the same risk of corruption that political speech does, and thus cannot be regulated as such. But the Model Regulations attempt an end-run around this time-honored distinction, defining issue speech as “election targeted issue advocacy,” and limiting that speech as if it were direct advocacy of candidates. This is exactly what Buckley prohibits, and this approach would endanger much of the work of charitable and other nonprofit organizations.
Second, the extent to which an organization may be regulated depends upon its organizational purpose. Groups with the major purpose of influencing elections may be regulated more heavily than broader-purposed organizations. This distinction—also found in Buckley—mirrors that case’s issue speech/candidate speech distinction. But the Model Regulations lack this major purpose test, and instead rely upon a simplistic and arbitrary monetary trigger. Without a major purpose test, the Model Regulations subject civil rights groups, trusts, and charities to donor disclosure for merely mentioning a candidate—a result that will likely cause these organizations to self-silence, abdicating their important societal role for fear of triggering extensive reporting and disclosure requirements.
Independent Groups
Roll Call: Van Hollen and Allies Drop IRS Suit
By Eliza Newlin Carney
The lawsuit’s instigators “will closely monitor the IRS proceedings,” according to a statement released by organizers behind the suit, and will go to court again “if the agency fails to adopt new regulations and prevent groups from misusing the laws to obtain 501(c)(4)” status.
The lawsuit alleged that IRS regulations are at odds with the tax code, which states that groups exempt from taxes under section 501(c)(4) must operate “exclusively” for the social welfare. Some court rulings have interpreted that to mean that political activity by social welfare groups must be “insubstantial,” but IRS regulations say only that such organizations must have social welfare as their “primary purpose.”
Candidates, Politicians, Campaigns, and Parties
Roll Call: Gabrielle Giffords Closes Campaign Committee
By Kent Cooper
Former Rep. Gabrielle Giffords, D-Ariz., has terminated her congressional campaign committee and has transferred the remaining funds to her political action committee.
State and Local
Virginia –– Washington Post: McAuliffe outraised Cuccinelli through Election Day and beyond, new reports show
By Ben Pershing
Virginia Gov.-elect Terry McAuliffe maintained his wide fundraising edge over foe Ken Cuccinelli through Election Day and beyond, new campaign finance reports show.
The latest reports cover the period from Oct. 24 through Nov. 28, capturing the frantic final weeks before and the ensuing days after McAuliffe’s (D) narrow victory in the gubernatorial race over Cuccinelli (R), the state attorney general.
