Muzzling a “dark money” watchdog

In a shocking move Thursday, the House Ways and Means Committee approved a bill that would further hinder the IRS from overseeing politically-active nonprofits, or 501(c) “social welfare” groups that are the most active in spending so-called “dark money.”

This would “open the door for secret, unaccountable money from foreign governments, corporations and individuals,” into federal elections, according to a handful of protesting watchdog groups who sent a letter to the Committee before the bill was approved.

“Social welfare” nonprofits are the “vehicle of choice” for dark money groups. They can collect unlimited contributions from almost any source, and are not required to disclose their donors. The IRS says politics cannot be the “primary” purpose of these nonprofit groups, but enforcement of this rule is rare. (In a controversial decision revealed earlier this year, the IRS granted Crossroads GPS “social welfare” status despite disagreements internally, for example)

The bill was sponsored by Rep. Peter Roskam (R-IL), and notably had the support of Charles and David Koch’s primary political arm, Freedom Partners. It’s also important to note that Koch Industries donates to Rep. Roskam’s re-election campaigns, according to OpenSecrets.

Not to be outdone, Koch Industries’ penned their own letter supporting the bill to the House Ways and Means Committee, according to Paul Blumenthal in the Huffington Post. It was sent by Philip Ellender, who oversees the Koch Industries’ lobbying operations.

As we’ve written in the past, the IRS has been hobbled in attempts to regulate money in politics. The agency proposed new rules to regulate political activity in 2013, but withdrew them after both liberal and conservative groups objected to the changes.

“As the I.R.S. wariness grows,” writes the New York Times Editorial Board, “so does the attraction of 501(c)s for donors more interested in stealth politicking…”

It all boils down to this: the best way to counteract the proliferation and influence of these “dark money” groups it by providing complete transparency so “everyone knows”, a major aspect necessary for campaign finance reform outlined in our Blueprints for Democracy report.