CAP Calls for Administration to Take Action through IRS, SEC, Federal Contractors

Center for American Progress: “”Specifically, CAP is calling on the executive branch to act in the following three areas:

  • IRS rulemaking on political activity by nonprofit organizations: Current regulations enable so-called dark-money groups to masquerade as 501(c)(4) “social welfare” organizations, thereby avoiding campaign finance disclosure laws. The IRS should clarify the rules for 501(c) organizations and should also tackle the problem of undisclosed political spending more directly by amending the regulations for Section 527 of the tax code. Rather than simply regulating dark money groups out of Section 501(c), the IRS should regulate those groups into Section 527 and thereby mandate public disclosure of donors.
  • Political activity by federal contractors: The executive branch should mandate further disclosure of political spending by federal contractors and should furthermore require those contractors take steps to ensure that they are not making impermissible federal political contributions.
  • SEC rulemaking: Currently, there is no rule requiring corporations to disclose political activity expenditures to their shareholders. The SEC should prioritize the development and implementation of a political activity disclosure rule. This corporate transparency would not only help to ensure that corporate spending is in line with shareholder interest, but it would also combat the problem of dark money.”

More information here.


Bloomberg View Calls for Obama, IRS to Change Rules to Distinguish Political Activities

Bloomberg View: “President Barack Obama, who’s pretty good with words himself, could easily order the IRS to change its language. That would help curb the influence of dark money, political contributions that are shielded from public view, which amounted to some $200 million in 2014 – most of it spent on negative advertisements.”

“The IRS has been studying how to tighten its rules for nearly a year and is expected to release a proposal early in 2015. Returning to the statute’s “exclusively” standard is not a feasible solution: That would eliminate tax exemptions for nearly all large nonprofit organizations, from hospitals to universities. So the goal must be a rule that prohibits such organizations from engaging in campaign-related activity.”

“That’s no easy task, but it can be done. Obama should direct the IRS commissioner, John Koskinen, to draw bright lines between social-welfare organizations and political committees, so that the latter cannot dress up as the former. This also would allow the IRS to spend less time policing political spending, work for which it is spectacularly ill-suited.”