Throwing In The Towel To Oligarchy: The I.R.S. Gives Up On The Throttlehold Of ‘Dark Money’ On Elections

The New York Times Editorial Board (7/25/15)

The federal government has all but surrendered to the powerful, rich donors whose anonymous contributions threaten to undermine the 2016 elections. The commissioner of the Internal Revenue Service, John Koskinen, signaled as much on Thursday [7/23] when he told a House committee that there would be no change in the tax code in 2016 to end its growing abuse by political operatives using nonprofit “social welfare” institutions to disguise the identities of affluent campaign contributors.

“I don’t want people thinking we are trying to get these regs done so we can influence the election,” Mr. Koskinen declared later to reporters. The statement was remarkable for blessing further procrastination at the I.R.S., whose clear obligation is to enforce existing law in a way that would end the current flood of “dark money” financing politics. The commissioner said the earliest that tighter rules could take effect would be 2017. The I.R.S. has been increasingly timorous on this issue ever since House Republicans opened partisan hearings into complaints that I.R.S. officials have been biased against conservative political groups that claim tax exemptions as nonprofit social welfare groups.

The fact is, the I.R.S. should be dedicated to enforcing the law against phony social welfare claims by all political schemers, from the right or the left. This abuse of the tax law mushroomed after the Supreme Court’s reckless Citizens United decision in 2010 that ended limits on campaign spending by corporations and unions. Since 2006, when only $5.2 million was spent by exempt organizations that do not disclose donors, spending increased 60-fold, to more than $300 million in the 2012 presidential cycle, according to the Center for Responsive Politics. An even bigger infusion is expected in 2016 from big-money donors shielded by the social welfare fiction.

Earlier this year, Mr. Koskinen declared that nonprofit social welfare groups could spend up to 49 percent of revenues on political activity and still keep their tax exemption. This ill-advised statement did not encourage optimism about a tightening of the code. It also contradicts existing law, upheld in court decisions, that these groups must be “operated exclusively to promote social welfare.”

Current regulations allow for some political activity provided it is not a group’s “primary” mission, but the notion that a group can use the social welfare shield to devote 49 percent of its revenues to electioneering is outrageous.

It is a gross insult to taxpayers to make them underwrite the brazen evasions of campaign operatives bundling dark money. The abuse is compounded by the latest I.R.S. retreat from its responsibility.

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