Midterm elections skewed by anonymous money

Traditional anonymous political activist

Crossroads Grassroots Policy Strategies would certainly seem to the casual observer to be a political organization: Karl Rove, a political adviser to President George W. Bush, helped raise money for it; the group is run by a cadre of experienced political hands; it has spent millions of dollars on television commercials attacking Democrats in key Senate races across the country.

Yet the Republican operatives who created the group earlier this year set it up as a 501(c)(4) nonprofit corporation, so its primary purpose, by law, is not supposed to be political.

The rule of thumb, in fact, is that more than 50 percent of a 501(c)(4)’s activities cannot be political. But that has not stopped Crossroads and a raft of other nonprofit advocacy groups like it — mostly on the Republican side, so far — from becoming some of the biggest players in this year’s midterm elections, in part because of the anonymity they afford donors, prompting outcries from campaign finance watchdogs…

Neither the Internal Revenue Service, which has jurisdiction over nonprofits, nor the Federal Election Commission, which regulates the financing of federal races, appears likely to examine them closely…

This is arguably more important than ever after the Supreme Court decision in the Citizens United case earlier this year that eased restrictions on corporate spending on campaigns…

I can tell you from personal experience, the money’s flowing,” said Michael E. Toner, a former Republican F.E.C. commissioner, now in private practice at the firm Bryan Cave…

“The Supreme Court has completely lifted restrictions on corporate spending on elections,” said Taylor Lincoln, research director of Public Citizen’s Congress Watch, a watchdog group. “And 501(c) serves as a haven for these front groups to run electioneering ads and keep their donors completely secret…”

In fact, the I.R.S. is unlikely to know that some of these groups exist until well after the election because they are not required to seek the agency’s approval until they file their first tax forms — more than a year after they begin activity.

“These groups are popping up like mushrooms after a rain right now, and many of them will be out of business by late November,” Marcus Owens said. “Technically, they would have until January 2012 at the earliest to file anything with the I.R.S. It’s a farce.”

RTFA for more sleazy details. The Republicans have the current market cornered – partly because they’re on the outside, partly because the Obama side depends on lots of small donors who enter the hunt for votes more or less on the honesty side of the spectrum. Serious corporate money no longer has to worry about oversight, anyway.

The Republican Supreme Court has engineered that aspect of buying and selling political favors/votes to favor the wealthiest individuals and corporations for the foreseeable future.

2 thoughts on “Midterm elections skewed by anonymous money

  1. Chris MacDonald says:

    Cynical explanations aside, I wonder if part of the problem lies in defining what the “purpose” of any institution is — 501(c)(4) or otherwise. I don’t know enough of the relevant law to know how that’s determined. Is it purely in terms of the organization’s activities? If we think of organizations as instruments of human intentions, they may be *used* for purposes other than those for which they were set up.
    I’ve been trying to sort out some related issues, here:
    http://businessethicsblog.com/2010/09/20/corporate-funding-of-elections/

  2. moss says:

    Intent is obvious – and cynicism barely suffices.

    The essential function is to provide support for politicians in elections without identifying the source of money and support to the public at large. At least, until well after the election.

    Perhaps that wasn’t the intent of this sort of corporation – by design – though that, too, is just as likely.

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