Nonprofit Newswire | No. 2 Democrat Asks for Investigation of Republican-Backed Nonprofit

October 13, 2010; Source: Associated Press | In this election cycle more and more money is pouring into nonprofit groups to influence elections across the country—mostly for Republican candidates. The Democrats intend to something to turn the tide.

The Senate’s No. 2 Democrat, Dick Durbin, is asking the Internal Revenue Service to investigate spending by groups like Crossroads GPS, a third-party group backed by Republican operative Karl Rove, that have pumped millions into advertisements targeting Democrats.

The Illinois senator sent a letter to the IRS on Tuesday asking the agency to “quickly investigate” the tax status of Crossroads GPS and other groups that are running political advertising without disclosing their funding. The rules regulating campaign spending have been greatly eased by the Supreme Court’s decision in the Citizens United case decided early this year.

While 501(c)(3) public charities are absolutely prohibited from political campaign activities [PDF], 501(c)(4) “social welfare organizations” (as well as 501(c)(5) labor organizations and 501(c)(6) business leagues) can engage in campaign activities “so long as it does not constitute the organization’s primary activity,” according to the IRS.

Durbin’s request comes weeks after Democrats on the Senate Finance Committee have asked the I.R.S. to take a closer look at political spending nonprofit groups. It may be too late for the Democrats to prove any wrongdoing before the mid terms. Rather, this may be another salvo in the escalating campaign finance battle leading into 2012.—Aaron Lester