GOP Riders Fuel Secret Spending

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Maryland politicians and community leaders held a rally in front of the Maryland State House to "fight secret spending in our democracy" by supporting the "DISCLOSE Act."

Secret political spending is playing an ever-larger role in the 2016 election, and Republicans on Capitol Hill have just closed off two important avenues to force disclosure.

Non-disclosing political groups have already spent close to $5 million in this election, according to the Center for Responsive Politics, a tenfold increase over the same point in the 2012 presidential contest. These include a secretive nonprofit backing Florida Senator Marco Rubio that, according the Wesleyan Media Project, is now the second-largest ad spender in the GOP presidential primary.

Disclosure advocates have tried multiple strategies in recent years to pull back the curtain on so-called dark money in elections. These include disclosure legislation, complaints to the Federal Election Commission and to the Justice Department, as well as calls for action at the Internal Revenue Service, the Federal Communications Commission and the Securities and Exchange Commission.

The disclosure movement’s only modest success thus far has been to convince the FCC to require political advertisers to file their public disclosures electronically instead of on paper. Attempts to pressure the IRS to crack down on politically active nonprofits have yielded little, as have efforts to pressure the SEC to require campaign disclosure from corporations.

Still, advocates of election transparency had pinned their hopes lately on signs of movement at the SEC, and on the pending release of a new set of proposed IRS rules to clear up the agency’s muddy definition of political activity. Those hopes were dashed this week with the release of a $1.1 trillion omnibus spending bill that explicitly blocks either agency from taking action.

The proposed spending bill, which both the House and the Senate are expected to approve later this week, includes two riders that tie the hands of both the IRS and the SEC on the disclosure front. The first effectively bars the IRS from finalizing any regulations that define the scope of permissible political activity by nonprofits. The second blocks the SEC from imposing any new disclosure requirements on public corporations.

“These are two of the most obvious and clear pathways to increasing disclosure in our post-Citizens United reality,” says Lisa Gilbert, director of Public Citizen’s Congress Watch, referring to the Supreme Court’s 2010 ruling to deregulate political spending. “So to see Republicans trying to short circuit that as part of the omnibus process is inappropriate and very troubling.”

Gilbert and other watchdogs were relieved that the spending package at least omitted several other campaign-finance riders that had been on the table. These included a measure that would have freed up political parties to spend unlimited money in coordination with candidates, and a proposal to block President Barack Obama from issuing any executive order to require federal contractors to more fully disclose their political spending.

But the IRS and SEC riders spotlight the wide and growing chasm between Republicans and Democrats in the fight over secret political money. Increasingly, Republicans cast disclosure as a form of political harassment and intimidation. This stands in contrast to the Supreme Court’s embrace of disclosure in its Citizens United ruling.

Conservatives remain livid at the IRS for targeting of Tea Party and other politically active groups a few years back. But the federal Inspector General’s report that uncovered that targeting also specifically directed the IRS to rewrite its hazy regulations regarding nonprofit political activity. The agency bars social welfare groups from spending most of their money on politics, but relies on a vague “facts and circumstances” test to define political activity.

This regulatory vacuum has sparked an explosion in groups that claim the mantle of social welfare but focus on little besides politics. Evidence continues to mount that such groups are brazenly violating the tax rules. Most recently, documents released in a legal dispute over the FEC’s failure to act on a complaint involving the big-spending conservative group Crossroads Grassroots Policy Strategies, masterminded by GOP operative Karl Rove, provide fresh evidence that Crossroads has been operating as political organization, not a social welfare group.

Crossroads GPS is one of two dozen purported social welfare groups that has spent more than half its money on politics in at least one year between 2008 and 2013, according to a recent investigation by the Center for Responsive Politics. In this election, a growing number of politically active “social welfare” groups have popped up to support a single candidate, making it awfully hard to argue that such organizations exist to somehow promote the public good.

These include Right to Rise Policy Solutions, a 501(c)4 social welfare group backing GOP presidential hopeful Jeb Bush that bears virtually the same name as the super PAC backing the former Florida Governor, and the tax-exempt Conservative Solutions Project, which backs Florida Senator Marco Rubio. Similarly, that “social welfare” group’s name closely tracks that of the pro-Rubio super PAC, also known as Conservative Solutions.

One of the most striking findings of the Wesleyan Media Project report released Wednesday was that the Conservative Solutions Project, which as a nonprofit operates completely outside the disclosure laws, has spent nearly $8 million on close to 5,000 ads backing Rubio. That places the tax-exempt group second only to Bush’s $100 million Right to Rise super PAC in sponsoring GOP primary ads.

“It’s noteworthy that Conservative Solutions Project is spending far more than Rubio’s super PAC,” said Michael Franz, co-director of the Wesleyan Media Project, in the report. “Rubio is the only candidate who is being backed by a dark money sponsor to such a high degree.”

But Rubio will soon have company. Already such non-disclosing groups as the U.S. Chamber of Commerce and the conservative advocacy group Americans for Prosperity have spent millions in the 2016 election. Americans for Prosperity is one of several tax-exempt groups allied with the billionaire industrialists Charles and David Koch that have pledged to spend an astonishing $889 million in this election cycle. Thanks in part to Congress and its new spending riders, the source of that spending may never come to light.

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