Sorry Tea Partiers, the IRS Is Not “Obama’s Gestapo”

Yesterday, we printed an article by David Streeter discussing a Tea Party fundraising appeal which characterizes the Internal Revenue Service as “Obama’s Gestapo.” Personally, I deplore political bias by the IRS, regardless of its direction. Nevertheless, making over-the-top comparisons to Nazis desecrates the memory of the Holocaust.

The IRS has not set out to exterminate the right-wing groups. The IRS was not threatening them with the loss to the right to free speech and peaceful assembly. The IRS was trying to determine whether their purpose was mostly political, which would make them ineligible for 501(c)4 Social Welfare Organization status.

Keep in mind that not being a 501(c)4 is not the end of the world. Even if they were judged as “too political” to form a 501(c)4, they could refile as 527 Political Action Committees. Both 501(c)4s and PACs can take unlimited contributions, so there is no difference there. The groups were not claiming to be charitable 501(c)3 groups, so there was no question of the donors getting a tax deduction for the contributions.

Neither 501(c)4s nor PACs pay taxes on the contributions they receive, so there was no question of the Tea Party groups having to pay anything regardless of their answers to these questions from the IRS.

So what is the difference between a Political Action Committee and a 501(c)4?

The basic difference is that while 501(c)4 can keep their donor list secret, PACs (but not “Super PACs”) must disclose them.

In other words, the IRS (a.k.a. “Obama’s Gestapo”) was after disclosure, not blood or money. At worst, the Tea Party groups risked having to divulge the names of their backers. This isn’t a case of persecuted groups being threatened physically or financially. This is a case of shadowy backers trying to influence the political process while keeping out of the light of day.

Focusing the IRS’s attention on a particular political group was indeed wrong, but it was a wrong on the order of an administrative screw-up, not a wrong on the order of war crimes and genocide.

After the jump, more on what went wrong and what should be done about it.
From the information available so far, it seems that the decision to focus on certain groups was made by low-level civil servants at the IRS’s Cincinnati office, not at the direction of their managers.

Scrutiny should have been universal.

At the time, there was a surge in questionable applications for 501(c)4 status. It would have been reasonable to scrutinize all 501(c)4 applications closely. However, budget cutting had already left the office without the necessary staff and resources to cope with the existing load. (This is a case of being “penny-wise and dollar-foolish.” According to a study by Citizens for Tax Justice, a dollar of increased spending on IRS enforcement results in ten dollars in increased federal revenue, due to greater compliance with tax laws.”)

Given political and economic realities, perhaps they should have audited a random sample of the 501(c)4 applications, or they should have proposed non-biased criteria and had them approved via the proper channels. It was tone-deaf and unfair to single out specific groups on partisan criteria.

Unfortunately, that is not what they did. Instead, their scrutiny fell predominantly (but not exclusively) on right-wing groups. In addition to more than 90 Tea Party groups that were examined, at least three liberal groups faced similar scrutiny. According to Bloomberg:

The Internal Revenue Service, under pressure after admitting it targeted anti-tax Tea Party groups for scrutiny in recent years, also had its eye on at least three Democratic-leaning organizations seeking nonprofit status.

One of those groups, Emerge America, saw its tax-exempt status denied, forcing it to disclose its donors and pay some taxes. None of the Republican groups have said their applications were rejected.

Progress Texas, another of the organizations, faced the same lines of questioning as the Tea Party groups from the same IRS office that issued letters to the Republican-friendly applicants. A third group, Clean Elections Texas, which supports public funding of campaigns, also received IRS inquiries.

The IRS non-profit office exercised poor judgment in its targeting, but the mistake does not appear to have been made for political purposes. If the IRS was being used politically by the White House, Mitt Romney would not have been able to keep his tax returns secret, and liberal groups would not have received the same inquiries that Tea Party groups did.

In order to avoid problems like this in the future:

  • The IRS budget should be increased so that it can examine fully all 501(c)4 applications.
  • The IRS administration needs to be hands-on and aware of what front-line employees are doing, and provide clear guidelines to direct the targeting of audits.
  • The FEC, rather than the IRS, should be given jurisdiction over the political activity of non-profit groups.
  • 501(c)4s should not be allowed to contribute to Political Action Committees. Doing so effectively turns them into front groups for these PACs allowing donors to camouflage their support for them.
  • Campaign finance law should be reformed so that no political contributions can be made anonymously.

Emergency Committee for Israel: The Emperor Has No Clothes

— by David A. Harris

Republicans are spending a great deal of cash this election cycle attacking President Barack Obama in the Jewish community by fibbing about his powerful support for the U.S.-Israel relationship, and smearing his unprecedented efforts to stop Iran’s drive towards a nuclear weapon.

Why? Because they know that venturing into domestic issues is a non-starter for the vast majority of Jews, even if what they’re saying regarding the Middle East isn’t true. Republican Jewish groups and the so-called “Emergency Committee for Israel” (ECI) have been at the vanguard of this effort, with ECI even forming a Super PAC related to their non-profit organization.

All along, observers might have assumed that the leaders of these efforts at least believed what they were selling, facts be damned. But now we know better. Now we know that they’re just trying to get their guy elected, and they don’t even believe their own arguments; we know this based on their own public statements.

A co-leader of ECI, the well-known conservative William Kristol, recently spoke in New   York at a debate in front of a Jewish crowd. Given ECI’s history up to the present day of unfairly lambasting the president’s strong Israel policy, Kristol surely came out swinging at the president, right? Hardly. The Israeli paper Haaretz reported that Kristol said Obama’s “policies today resemble those of his predecessors Bill Clinton and George W. Bush.” What? “I am happy to agree with Obama to a considerable degree,” Kristol added. And his take on the Israel policy differences between Obama and Romney? “Not that great.”

Did Kristol try to walk-back his hour-long moment of truth? Of course. But I don’t know how you unring that bell. My question is, given his confession, will ECI stop viciously and falsely attacking the president as being somehow virulently anti-Israel — attacks which have been condemned by the nonpartisan mainstream of the American Jewish community?

At long last, we can see that this emperor — Bill Kristol, and ECI — have no clothes.

Originally published in Politico.

The Big Money Behind Romney And His Super-PAC

Time Magazine has analyzed the Federal Election Commission filings for January to determine who has been contributing to the Super PAC’s which have been dominating the Republican primaries:

The group supporting Mitt Romney, who swept Florida’s primary on Tuesday, identified bankers, investors and prominent businessmen who together contributed more than $30 million last year. The group’s three most generous donors gave $1 million each, or 400 times the amount they could legally give directly to Romney. All were hedge fund managers. The pro-Romney group Restore Our Future spent much of the money it raised on ads supporting the former Massachusetts governor or fiercely attacking his rivals… To be sure, the Romney-leaning super PAC isn’t alone in its high-dollar contributions to support candidates. Casino mogul Sheldon Adelson and his wife gave $10 million this month to the pro-Gingrich Winning Our Future super PAC, making the couple by far the key backers to a group that had only raised $2 million through the end of December

Colbert Highlights Super PAC Farce

— by Jonathan Backer

A popular government, without popular information, or the means of acquiring it, is but a prologue to a farce, or a tragedy, or perhaps both. — James Madison

By exploiting loopholes in campaign finance law, special interests have already succeeded in denying the public of essential information about the sources of money funding political speech. A farcical attempt by one group to keep the public in the dark while also coordinating its message with candidates makes for good political comedy now, but will lead to tragedy if our elected officials begin to feel the full corrupting influence of unlimited, undisclosed, corporate contributions.

In the latest installment of Stephen Colbert’s intrepid quest to expose the absurdities of campaign finance non-regulation in the post-Citizens United era, the comedian recently discussed a new attempt by Super PACs to circumvent the few constraints that remain on their electioneering activities. The Super PAC American Crossroads recently submitted a request to the Federal Election Commission seeking permission for federal candidates to appear in its purportedly “independent” ads. The group acknowledged that ads featuring candidates would be “fully coordinated with incumbent Members of Congress facing re-election in 2012.” After all, a Super PAC would obviously have to share a script and discuss the contents of an ad with a candidate in order for her to appear in it. Nevertheless, American Crossroads would like the FEC to issue an advisory opinion stating that such ads would not qualify as “coordination.”

More after the jump.
As the Brennan Center argued in a comment to the FEC, this position runs afoul of “[c]onstitutional law, federal statutes, and common sense.” Fortunately, common sense was no barrier to Stephen Colbert, who rose to the challenge and submitted a comment to the FEC in support of American Crossroads’ request. As Colbert wrote, “The candidate would merely be appearing as a paid spokesperson, who, coincidentally, is closely aligned with the candidate that he or she also is.” To illustrate the paper-thin separation between supposedly independent Super PACs and the candidates they support, Colbert offered an illuminating metaphor:

For example, an ad in which the Kool Aid man decries our nation-wide childhood thirst problem would not necessarily be an ad for Kool Aid brand juice drink. That being said, would a tall glass of Kool-Aid solve that thirst problem? To quote one expert: “Oh, yeaaahhhh!”

Colbert’s letter far and away outstrips the competition for funniest public comment to a regulatory agency, but even the comedian’s most ardent fans recognize that the consequences of a ruling in favor of American Crossroads are far from amusing. After Colbert emailed his comment to supporters of Americans for a Better Tomorrow, Tomorrow (Colbert Super PAC), hundreds of individuals emailed the FEC calling for the agency to deny American Crossroads’ request.

As one civically-engaged student, wrote,

As a young citizen of this country, I shudder to think of the ferocity at which campaigns are currently forced to solicit donations-the thought that they will be fighting for an even bigger chunk of shadowy money absolutely terrifies me….I hope we can find ways to avoid exacerbating this problem.

Comedians and middle-school students don’t constitute what one would describe as usual suspects for submitting public comments on advisory opinion requests to the FEC. But the legal gymnastics that groups like American Crossroads are performing to subvert campaign finance regulations touch a nerve with large numbers of Americans. A request as absurd as American Crossroads’ belongs properly in the realm of farce, and the FEC should heed the outpouring of opposition and refuse to further expose our democracy to the tragic consequences of outright corruption in the political process.

Reprinted courtesy of the Brennan Center for Justice.