The controversy surrounding campaign finance and the elections of both 2010 and 2012 elections is not so much about corporations or who is able to give to a candidate because of their new found political- free speech, but rather that there are no limits to stop any outside group from seriously altering any election (as seen in the Wisconsin recall of Governor Walker). Instead of using public funding, the idea of limits on contributions to conservatives seems ‘unconstitutional’ and is therefore attacked with vigor by many, but certainly by this man—James Bopp Jr. Their following believes that we all deserve the right to political free speech, and this directly includes removing limits on contributions to campaigns by corporations, individuals, and unions. They might not know that this opened up a wave of outside groups (i.e. super PACs) to classify themselves as ‘social welfare’ organizations, and with that comes secret money. Crossroads GPS has spent up to $83 million in ads this year but has only disclosed $200,000 to the FEC. This shows how much money is and is not disclosed by 501s.
Due to the push for more disclosure by Democrats, super PACs are now hiding under the disguise of non-profit groups, such as 501s or 527s. Super PACs classified as ‘social welfare’ non-profit organizations are not subject to the same disclosure rules that regular super PACs are, regardless of the Supreme Court rulings since 2010. This is furthermore complicated by the fact that a PAC can file for a non-profit tax-exempt status not only with the FEC, but with the IRS as well. In fact, the IRS is less regulative on this than is the FEC.
In order to get around the requirement of having to disclose donors, a group can simply submit for non-profit classification through the IRS. One requirement is that the groups spend more than half of its treasury on social welfare purposes. The Huffington Post, last Monday, said that this ‘one requirement of the IRS can go toward what is called—Public Education. Yet, the ads these non-profits use are more like negative ads than public education. A list of non-profit [super PACs] include: Americans for Prosperity (who claim to spend $400 million), Crossroads GPS (who claims to spend $300 million), U.S. Chamber of Commerce, Center for Competitive Politics, and National Organization for Marriage, to name just a few. These groups are all active in political campaign elections through electioneering communications or other means (i.e. deregulation of reform) . Some local Indiana non-profits include: The Columbia Club, Indiana Historical Society, Indiana Repertory Theatre, Indianapolis City Market, and the IMS. Can you see the difference?
In an NPR article, dated July 7, Karl Rove speaks on the topic his non-profit super PACs, saying that–
[Crossroads GPS] is a social welfare organization because it spends the vast preponderance of its money in furtherance of its social welfare goals. It’s an issues advocacy group. For example, it’s talking right now about the need to change our policies on spending and debt.
But these goals and policies are only one-sided, so it can’t be truly educational. If this is the education conservatives want, we can burn our books like in ‘Fahrenheit 451’.
So far in the current election year, most of the contributions given to super PACs have come not from corporations but from wealthy individuals, according to a March 29 article by Timothy Noah. Brad Smith, from the Center of Competitive Politics, agreed with this statement, saying– ‘Corporate money remains a very small part of the total spent on elections, with Fortune 100 money almost non-existent’. According to data from the Center for Responsive Politics, the top 100 individual super PAC donors between 2011 and 2012 made up just roughly four-percent of contributors yet accounted for more than 80% of the total money raised; while less than half-a-percent of the money given to ‘the most active Super PACs’ was donated by publicly traded corporations, according to March 8 Politico article.
This alternative of disclosure through registering as a 501(c) is drawing new attention from Democrats and Democracy 21. Yet, the IRS has no way of knowing about this issue due to its old tax codes’ vagueness regarding non-profit status. Last year, the IRS was intending on putting a tax on gifts to active political advocacy groups. This was brought about by letters from Democracy 21, et al., to the IRS asking for regulation on those political advocacy groups requesting phony non-profit classification. Lois Lerner of the IRS replied back to the letter from Wertheimer, saying: ‘The IRS regulations have been in place since 1959, more than a half century ago. Circumstances have changed dramatically since then. Effective new IRS regulations would eliminate the current efforts by phony ‘social welfare’ groups to inject secret contributions into federal elections by claiming to be 501(c) (4) groups’. These super PACs are taking advantage of this old law to bypass disclosure of donors, at the request of their wealthy- donors (i.e. Adelson Sheldon).
According to the Center for Responsive Politics, ‘America has Jim Bopp to thank for their new-found freedom’ in campaign finance. He continuously fights to overturn state law which puts limits on contributions from soft money, overturning a 100 year old law in Montana in 2012. But, it appears that the Supreme Court and their biased 5-4 decisions know more about Montana’s culture than the people of that state. Scott Thomas, in the Bloomberg article, said ‘Bopp’s cases have almost gutted the 2002 BCRA intended to rein in outside groups and the influence of wealthy donors’. It was bi-partisan and approved by then- President George W. Bush. Though his love is strong for the President, as seen by an autographed photograph with then-President George W. Bush on a wall in his office, he overturned a bill signed by Bush. Bush was adamant about some type of reform being passed to make the election system more legit. But, according to Bopp this is not how the people want it. ‘We have the First Amendment,’ Bopp tells Bloomberg. ‘The whole idea of that was to ensure robust participation by citizens in our democracy’. Yet, his fight for unlimited funds and free speech for corporations is not a fight for the citizens but for inclusion of all parties into elections with no limits on donations, and multiple loop-holes through the IRS for non-disclosure.
According to Fred Wertheimer, president of Democracy 21, ‘the two most dangerous forms of money are unlimited contributions and secret money’. Wertheimer explains to Open Secrets that ‘history tells us that secret money and unlimited money are vehicles for corrupting government decisions and officeholders.’ Democracy 21, along with the nonpartisan Campaign Legal Center, has called for the IRS to investigate several 501(c) (4) groups that they say are masquerading as nonprofits to avoid publicly revealing their funders. The targeted groups include Crossroads GPS, American Action Network and Priorities USA. As it can be seen, the complaints are not against a party or ideology, but rather the influence of unlimited spending and secret money– in the case of super PACs disguised as non-profit social welfare organizations.
In a look back at pre-Citizens United, 2008 saw a different degree of influence by PACs in the political arena, as the top nine PACs spent a total of $25,794,807, via their affiliates and subsidiaries listed here:
• International Brotherhood of Electrical Workers PAC: $3,344,650
• AT&T Federal PAC: $3,108,200
• American Bankers Association (BANK PAC): $2,918,140
• National Beer Wholesalers Association PAC: $2,869,000
• Dealers Election Action Committee of the National Automobile Dealers Association: $2,860,000
• International Association of Fire Fighters: $2,734,900
• International Union of Operating Engineers PAC: $2,704,067
• American Association for Justice PAC: $2,700,500
• Laborers’ International Union of North America PAC: $2,555,350
As of February 2012, according to Center for Responsive Politics, 313 groups organized as super PACs had received $98,650,993 and spent $46,191,479. This doesn’t account for the non-profit PACs which don’t disclose their ‘soft money’. Spending by non-profits, on the other hand, exceeded $500 million in the 2010 elections. The perception among analysts is that this figure will double at the end of the 2012 election cycle.
Unlike the 501(c) (4) non-profits, whom are not limited in any regulatory way by the IRS, the FEC requires non-profits to report their expenses if they fall into one of three categories:
• The first category is advertisements that expressly advocate for or against federal candidates, which are known as ‘independent expenditures’.
• The second is for broadcast ads that mention a federal candidate within 30 days of a primary or 60 days of a general election, but don’t overtly urge viewers to elect or defeat that candidate. These are known as ‘electioneering communications’.
• And the last type are so-called ‘communication costs’, which are internal political communications targeting a group’s own members.
Opposition to the 2010 and more recent revival of the DISCLOSE Act, has been led by the non-profit organization U.S. Chamber of Commerce, with other groups, such as the Center for Competitive Politics. Allen Dickerson, the legal director of the Center for Competitive Politics, said that the DISCLOSE Act would impose ‘burdensome’ requirements on political nonprofits and violate the civil rights of donors. ‘This [bill] is an enormous expansion of the government’s intervention in the internal workings of nonprofit groups’, he said. Furthermore, Brad Smith, of the USA Today and Center for Competitive Politics, compares Montana’s argument of it knowing its own culture more than SCOTUS when saying—‘It would be as if a state argued that its crime rates were so high that it could conduct unreasonable searches without a warrant, or that its courts were so backlogged it could dispense with the right to trial by jury’.
Again, Indiana is a battle-ground state for this year’s election and that makes it a hot spot for electioneering communications from both sides, but mostly from conservative groups who want to win back the red state. According to Open Secrets, outside spending in the race for Richard Lugar’s Senate seat was $4,885,008. Of this amount, almost $3,000,000 went to support Richard Mourdock; and of that $4,885,008, $1,676,035 was used to attack the incumbent senior Senator (who is claimed to have lost his conservative values). Only $208,628 in outside spending went to support Lugar. Most of the attacks came from a super PAC called Club for Growth. They spent a total of $5,000,000 nationwide in 2010, beating out many incumbents, and have spent $9,000,000 as of this year. This super PAC was the main reason Lugar lost his seat to up-and-coming Republican Richard Mourdock.
Today, there was a hearing held titled ‘Taking Back Our Democracy: Responding to Citizens United and the Rise of Super PACs’. It was hosted by the U.S. Senate Judiciary Committee. The purpose of this forum is to talk about post- Citizens United campaign elections and finance, and to bring awareness to citizens whom were normally uninformed. The hearing held before the Senate Judiciary Committee talks about how many options have been implemented, such as Fair Elections and the DISCLOSE Act (both 2010 and 2012), but warn that the only way to fix this issue is to make it a Constitutional amendment. Many times throughout U.S. history has reformers pushed for more inclusion of the public into the election process, though not without struggle, blood, sweat and tears. The Supreme Court strikes down many current amendments in the past, only to be fought over until they were passed, such as the 12th, 15th, 19th, 24th and 26th amendments. According to the live web-feed, 63% of Americans believe there should be limits on contributions from corporations, labor unions, and individual wealthy people, which would match the limits regular citizens have with regards to their political- free speech. James Madison said in his Federalist papers, that the people have the right to amend the Constitution only when great and extraordinary situations are present, and only with tireless deliberation. Only then will light be shed what issue that faces this nation. But, for the time being, SCOTUS has ruled that money is equivalent to free speech.