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The IRS Moves To Limit Dark Money — But Enforcement Still A Question

Memo Pad Politics

The IRS Moves To Limit Dark Money — But Enforcement Still A Question


by Kim Barker, ProPublica.

The IRS and Treasury Department announced proposed guidelines clarifying the definition of political activities for social welfare nonprofits Tuesday afternoon, a move that could restrict the spending of the dark money groups that dumped more than $254 million of anonymous money into the 2012 elections. Read the guidelines here.

However, the guidelines, which finally define what constitutes “candidate-related political activity,” aren’t a done deal. They will take some time for public comment and debate, and more time to finalize. (The IRS asks that all comments and requests for a public hearing be submitted by Feb. 27.) Experts also cautioned that the real test of oversight on the political spending by nonprofits will be how these regulations are enforced, something that the IRS has been so far reticent to do.

The proposed regulations “are only as good as the extent of compliance with them, which history would indicate requires a realistic threat of enforcement and significant sanctions on the groups involved and probably the individuals running those groups,” said Lloyd Hitoshi Mayer, a law professor and associate dean at the University of Notre Dame who specializes in nonprofits and campaign finance.

Social welfare nonprofits are allowed to spend money on election ads without reporting their donors, as long as they can prove that social welfare — and not politics —  is their primary purpose. But the IRS guidelines for political spending have been vague. They state that the agency will apply a “facts and circumstances” test to each ad, meaning that if an ad walks and talks like a political ad, it’s a political ad.

ProPublica and others have written extensively about how many social welfare nonprofits have exploited loopholes in Federal Election Commission and IRS rules since the Supreme Court’s 2010 Citizens United ruling opened the door to unlimited election spending by corporations and nonprofits.

Some of the groups spend more than political action committees. GOP strategist Karl Rove’s group Crossroads GPS, for example, told the IRS it spent more than $74.5 million on election activities in 2012, more than any other dark money group and all but two SuperPACs, which are allowed to raise and spend unlimited amounts of money from reported donors.

The proposed regulations could dramatically change how the nonprofits spend money. The proposal defines political activity as including any expenditures reported to the FEC and any grants to other tax-exempt organizations that do candidate-related political activity. (We wrote yesterday about one such grant from Rove’s group.) Political activity would also include voter-registration drives and “get out the vote” drives  — even for nonpartisan groups. It would also include holding events featuring candidates within two months of a general election.


  1. Socialism is Organized Evil November 28, 2013

    Effective competition depends upon competitors following rules and restraining their desire to cheat or use force against other competitors.

  2. Socialism is Evil. Organized. November 29, 2013

    Since a nation’s advance mostly results from the efforts of its more well off citizens, central governments that assault those citizens will naturally halt technological progress and reduce the nation’s overall quality of life.

    1. Gambler2 November 29, 2013

      Do you have any evidence to support these claims? Many of our more innovative ideas have come from men and women who are not “more well off citizens.” Please offer some logical support for your post.

      1. Socialism is Evil. Organized. November 29, 2013

        Apple and Microsoft would be to of the most obvious examples. Jobs and Gates being the two individuals mainly responsible for the innovation put forth by those two organizations.

        1. Independent1 November 30, 2013

          I find no record of Steve Jobs adoptive parents being especially “well off”, and although Bill Gates mother’s father was a bank president, I see nothing about Bill Gates family that suggests they were especially ‘well off’ either.
          Bill learned how to program by being excused from his math class and using school computer time that had been set up on a GE computer for its students (certainly if his parents were eally ‘well off’ they would have had him set up with his own computer).

          Here’s something on that from Wikipedia which doesn’t give me the impression that his parents were especially well-to-do:

          At 13 he enrolled in the Lakeside School, an exclusive preparatory school.[22] When he was in the eighth grade, the Mothers Club at the school used proceeds from Lakeside School’s rummage sale to buy a Teletype Model 33 ASR terminal and a block of computer time on a General Electric (GE) computer for the school’s students.[23] Gates took an interest in programming the GE system in BASIC, and was excused from math classes to pursue his interest. He wrote his first computer program on this machine: an implementation of tic-tac-toe that allowed users to play games against the computer. Gates was fascinated by the machine and how it would always execute software code perfectly. When he reflected back on that moment, he said, “There was just something neat about the machine.”[24] After the Mothers Club donation was exhausted, he and other students sought time on systems including DEC PDP minicomputers. One of these systems was a PDP-10 belonging to Computer Center Corporation (CCC), which banned four Lakeside students—Gates, Paul Allen, Ric Weiland, and Kent Evans—for the summer after it caught them exploiting bugs in the operating system to obtain free computer time.[25][26]

          1. Socialism is Evil. Organized. November 30, 2013

            What, if I may ask, is the source of your hatred for other individuals?

          2. Independent1 November 30, 2013

            Exactly what I’m implying – my hatred is for people who are self centered egotistical bigots who thrive on trying to suck out the life from everyone else so they can stuff their pockets with as much wealth as possible, not giving one iota of thought to what their total greed is doing to millions of other people.

            For four families to have acquired more money than 40% of the entire U.S. population and then sit back and allow the company that they own the majority of stock in to be run such that it pays below poverty wages to more than 80% of its work staff is totally unconscionable and their greed is just totally over the top!!!!!!!!

          3. If you weren’t selfish yourself, you wouldn’t be so vociferously defending your opinions.

            Why are you so greedy about your own opinions?

    2. charleo1 November 29, 2013

      This idea, that the rich must be coddled, and protected, for the greater good of society, sounds like something that would come out of one of these Right Wing Propaganda mills, er, excuse me, “think tanks.” Funded by one of these outfits, like the Heritage Foundation, or the billionaire Koch Brother’s, “Americans for Prosperity.” THEIR prosperity, of course. Who seem to believe they are communicating with a completely illiterate, American public, with the gullibility of a four year old. For example, all but the most ill informed know two of the most transformational figures of later 20th century technology, Bill Gates, and Steve Jobs, came from distinctly Middle Class backgrounds. Gates parents being public school teachers. Former military
      leader, and President, Dwight David Eisenhower’s family were destitute, and migratory even, for a significant part of his early childhood. Our history is replete with one story after the next of innovators, and entrepreneurs, who
      came from the lowest echelons to rise to lead the Nation forward in their
      respective fields. It was therefore, then, and so has always been, the opportunities afforded those down the economic scale, that was the hallmark, and the pride of the so called, “New World,” even before the founding of our Country! I strongly advise you, as one American to another. Crack a book, would you please?

      1. Socialism is Evil. Organized. November 29, 2013

        False. At least about Bill Gates.

        Bill Gates’s father was one of the most prominent lawyers in Seattle. The Gates family was very well off and Bill attended one of the more exclusive private schools in Seattle before attending Harvard.

        1. charleo1 November 29, 2013

          Your assertion that progress, technological or otherwise,
          is advanced mostly by the well to do, is not only elitist,
          but just plain wrong. You know, if you want to worship
          the rich, put them on a pedestal, it’s not necessary to
          justify it by making ridiculous statements. Especially
          ones, everyone knows are not true. Just say, I think the
          rich are the bomb! The greatest ever! But, as I said, most
          of the people that have had the greatest influence, or
          invented machines that changed the world were not
          well to do. Sam Walton, founder of Walmart? Didn’t start
          out with much money at all. In fact, he put his first store
          in hock, to finance the second. The Wright Brothers were bicycle mechanics. Michael Debakey, the heart surgeon was the son of poor Lebanese immigrants. Henry Ford was born on a small family farm in Michigan. He made his way to Detroit, and went to work in one of Thomas Edison’s machine shops. Edison’s parents were regular work a day folks. As were even Einstein’s. George Washington was born poor. Not educated in the upper crusty schools in London. Volunteered as a young man for a few military campaigns. Not because he was fighting for God, and
          Country. They paid a little stipend. He also worked as
          a surveyor. He married the richest widow in the entire 13 colonies. But the land, and money didn’t make him a bit smarter. So if the facts don’t back you up, on your theory the rich are smarter. Or society usually needs a rich person
          to advance it. Maybe you’re wrong about Socialism?

          1. sigrid28 November 30, 2013

            Charleo, our right wing friend Socialism is Evil, besides being wrong on the facts, seems very impressionable, as many without foresight tend to be. He sounds as though he is ensconced in a kind of infantilism conferred by wealth: he cannot–or will not–look very far into the future. Why do so, if he is so happy with himself right now? The complacency of wealth can insulate the few who manage to acquire it by immersing them in the warm bath of entitlement, a situation so enticing and hypnotic some billionaires (not all of them, of course) go to their graves under the impression that they DESERVE the riches that surround them. But they forget about the power of dust to bring down even the greatest among us. Take Shelley’s Ozmandias, who thought himself the “king of kings,” yet succumbed to a grain of sand. Reduced over time to “two vast and trunkless legs of stone,” he became what Shelley famously called “that colossal wreck,” forgotten and decaying in the desert.

          2. charleo1 November 30, 2013

            Well, obviously you are a far more educated person than the average Rightie. One thing that does, is give you more tools in your toolbox, to understand more of how the world works. As the Right depends ever more heavily on people not having the wherewithal to see in a clear manner what is taking place. I see ever more troubling rewrites, inserted into the general knowledge of their already highly misinformed base. For one thing they are not able to disguise the colossal failures of the Right, and the Bush Administration. In terms of foreign policy, or domestic economic, and tax policy. So, the propaganda has turned from absolving the Right, to tearing down the Left. The latest distortions of FDR have turned from insisting his, “Socialist regime,” made the Great Depression worse. To asserting his policies stemmed from his deep adulation, and feelings of kinship with fascist, Mussolini. That JFK was a big admirer of Hitler. Yes, Hitler! Right Wing blog sites are scary places, nowadays. And these low information, poorly educated, and guileless individuals, are being played like fiddles. So, this poster’s being convinced any social value is only gained by empowering the wealthy above the rest, is the latest in the campaign to characterize the poor, as devoid of any true value. So, they may be thought of as expendable. But, I thought convincing a person only a small number of those born poor, ever contribute anything worthwhile to advance society, was an impossibility, even for the Right. Not so, evidently.

          3. sigrid28 December 1, 2013

            We all have our guilty pleasures, and mine is reading (and writing), so a lot of useless lines turn up in my memory. When things seem dreary or desperate, I amuse myself by looking to literature and sometimes film–our great twentieth century art form–for solace and sometimes insight. I came across this passage in Peter Brown’s review of a book by Kyle Harper, “From Shame to Sin: The Christian Transformation of Sexual Morality in Late Antiquity” (Cambridge: Harvard University Press, 2013):

            “In his first book, ‘Slavery in the Late Roman World, AD 275-425,’ Harper showed that the late Roman world had remained a slave society deep into Christian times. In ‘From Shame to Sin,’ Harper takes us back into this world. It is one that we rather wish it had not been: ‘a society whose moral lineaments were sculpted by the omnipresence of slaves’ and where ‘the flesh trade was a dominant institution.’ ” (as cited in “The New York Review of Books,” Dec. 19, 2013)

            Others on the NM comment threads have compared Republicans to the Boni, the rich plutocrats who ruled–some would say presided over–the demise of the Roman empire. Your emphasis on the Right’s insistence on demeaning the poor while exploiting them at the same time points to another similarity between our society and that of Rome in its decline, and a not very flattering one at that. Until we put a stop to it, our culture has veered off on a course with unintended consequences. How many will say of us–twenty years or twenty centuries hence–they “rather wish it had not been.”

  3. Socialism is Organized Evil November 30, 2013

    In fact, many of collectivism’s erroneous arguments are based upon the untenable illusion that private property and free enterprise are responsible for human discontent.

  4. Benjamin Dover December 2, 2013

    Although liberty’s benefits increase along with our commitment to it, liberty’s importance has little to do with the number of people who actually want to use it.


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