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IRS to Big-Spending Attack Groups: Ahem
As we reported last week, millionaire-funded and operative-helmed attack groups looking to make a splash in the elections this year are choosing nonprofits as their preferred vehicle. Acting as 501(c)(4) organizations, the groups are allowed to attack all they want and keep their donors secret.
There's a catch, of course. The groups are nominally "social welfare" organizations, groups that are allowed to engage in political activity as long as that is not its primary purpose. That's why you see all the groups claim that they are focused on issues, not candidates, even when it's apparent that's not the case.
It's a hazy line, and one that the groups hope that the IRS doesn't explore. But as Roll Call reported yesterday, the IRS says it's taking a "close look" at whether the groups go too far.
But don't expect the IRS to step in any time soon. The IRS official tells the paper that the IRS likely wouldn't act until after the groups filed their taxes next year (by which time, of course, a president might be in the White House due in large part to a campaign by a lawbreaking group). And what happens then? Well, it's unclear:
The IRS director also agreed that -- perhaps unlike the FEC -- a broad IRS sweep of wayward nonprofits may yield better results than the recent high-profile fining of 527s by election regulators. And although the IRS is likely to just revoke a group's tax status and slap it with a fine, another source within the IRS said that serious violators could "go through our criminal investigations area ... and it could end up at the Justice Department."
Comments (11)
If an IRS investigation leads to a Justice investigation, then we have to wait until the political influences have been purged from the DoJ.
This is an investigation I'm fine with waiting for.
April 15, 2008 12:38 PM | Reply | Permalink
Recently, Paul Kiel wrote about American Future Fund (AFF) and its affiliate, Iowa Future Fund (IFF). AFF is running pro-Norm Coleman ads in Minnesota and IFF is running anti-Governor Chet Culver ads in Iowa.
The two 501(c)(4)s were registered in Iowa on 8/7/07 by Holtzman Vogel. Alex N. Vogel and his wife, Jill Holtzman Vogel, are among the dirtiest of dirty Republican operatives.
In late October 2006, Paul wrote about the mysterious 501(c)(4), Progressive Policy Council that sent out campaign mailers to Pennsylvanian voters comparing the similarities of Rick Santorum's stance on social issues with Bob Casey's. The mailer was meant to discourage Dem voters from turning out for Casey. Paul was only able to identify Jason Torchinsky of Holtzman Vogel as being associated with PPC.
As I posted here at the TPM Cafe, notorious Republican operative Roger Stone's firm, Ikon Public Affairs, was behind the Progressive Policy Council.
I researched American Future Fund and Iowa Future Fund and posted it in the TPM Cafe here and here.
It appears that Bruce Rastetter and his business associates is probably funding AFF and IFF. Rastetter, a major player in the Iowa ethanol and wind farm industries, briefly considered running against Senator Tom Harkin this year.
Nicholas T. "Nick" Ryan, former Rep. Jim Nussle's long time campaign manager, is appears to be running AFF and IFF behind the scenes. Ryan now works for Rastetter.
After a failed bid for the Iowa governorship, Nussle was appointed Direct of the WH Office of Management and Budget.
April 15, 2008 12:56 PM | Reply | Permalink
Darn. I accidentally hit the send button before I finished my comment.
Late last Friday, Dave Kochel, Republican operative, issued an idiotic press release that Iowa Future Fund was so successful that it was being replaced by Iowa Progress Project. The real reason is that the Dems found out about Bruce Rastetter's involvement in IFF and Kochel wants to bury IFF as quickly as possible.
My question is whether AFF and IFF are dry runs for a major Republican dirty tricks operation in the fall.
Dave Kochel and AFF president, Nicole Schlinger, must be anticipating big things because they registered "Mission Control Partners Inc." in late February.
April 15, 2008 1:05 PM | Reply | Permalink
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April 15, 2008 4:10 PM | Reply | Permalink
The IRS has its own part of the DOJ the Tax division.
I'm not generally one to be saying good things about the IRS but they do tend to be nonpartisan.
April 15, 2008 1:30 PM | Reply | Permalink
It's going to take a lot of money to clean up Bush's borrowing and waste, and these right-wing billionaires have a lot of money and need more than a slap on the wrist. I hope the law allows the IRS to take these clowns to the cleaners (next year when we have an administration that's not thoroughly corrupt.)
April 15, 2008 1:43 PM | Reply | Permalink
Great info Mrs Panstreppon. Need to keep our eyes on these organizations and who is behind them. After having read the stuff on the American Future Fund site, I cannot see how it is any different than blatently political organizations like Freedom's Watch or the now defunct Progress for America. "Social welfare" maybe; but for only a few wealthy "society" members whose identities are concealed. Would prefer to see the IRS be more proactive in determining whether we really have a sheep or something else in costume.
April 15, 2008 1:56 PM | Reply | Permalink
Another good primer on this comes from John Mercurio of CQ (via MSNBC). His premise is that 501(c)(4) abuse is a here and now feature - and the questions to be asked are "how many" and "which ones are serving which purpose?"
As Mrs. Panstreppon has pointed out in her posts, most of the GOP operations unearthed so far got off the ground in August 2007. An unexpectedly long Obama/Clinton runoff has kept them waiting.
April 15, 2008 2:08 PM | Reply | Permalink
According to the WaPo's The Fix, 501(c)(4) group "Freedom's Watch" is airing anti-Dem ads in the Louisiana race.
April 15, 2008 3:38 PM | Reply | Permalink
Saw the "Freedom's Watch" ad linked to by The Fix. These creeps walk right up the the regulatory boundary, but the toe doesn't quite touch the line...or does it? Is it information on the candidate, or is it political opposition to him? I guess the legal fees justify tax avoidance.
April 15, 2008 5:49 PM | Reply | Permalink
Maybe I'm stupid, but if the majority of the funds spent by a 501c4 is used for attack advertising, isn't that a clear sign that there is no "social welfare" being done at all? Where is the "hazy line" coming from? At minimum, if 51% of funds in a 501c4 were used for politcal advertising, that should negate any confusion as the real purpose behind the claim of non-profit. What am I missing?
April 15, 2008 11:00 PM | Reply | Permalink