The New Normal of Money in Politics

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November 2, 2010; Source: Columbia Journalism Review | For some, this election is the Tea Party election, but when it comes to money in politics, this is the 501(c)(4) election. According to the Columbia Journalism Review, expectations are that 501(c)(4)s that raked in big-time anonymous dollars for political issue advocacy (read: partisan electioneering) have been more active this time around than in previous elections and are prepared to revive their roles in 2012.

A couple of issues for nonprofits: 501(c)(4)s are “social welfare” organizations, meaning that political activities are not supposed to be the primary purpose of the groups. Tell that to Karl Rove’s American Crossroads and Crossroads GPS. It is going to have to do a lot of nonpolitical issue advocacy following the election in order to drive its election spending below 50 percent of its total program expenditures.

Democrats were early supporters of the electioneering use of 501(c)(4)s, but Republicans quickly grabbed onto the technique and used it to flood the elections with secret donations for elections. The Obama White House and Congressional Democrats made a not particularly vigorous effort to pass legislation that would require some disclosure for some 501(c)(4)s, but one gets the sense that Democrats are looking at how they unseat a potentially new Republican majority in 2012, which would require new sources of campaign dollars that could come from undisclosed sources to and through 501(c)(4)s.

This might be the “new normal” of political campaigns, according to Joan Fitz-Gerald of America Votes, and to not play the game, she says, would be self-defeating. An ABC News/Washington Post poll indicates that three-fourths of registered voters think it is “very” or “somewhat important” for them to know who is paying the freight for these political nonprofits and their campaign ads.

The U.S. has gone through waves of political “innovations”—PACs, 527s, and (c)(4)s—all new, rediscovered, or expanded venues for political expenditures leapfrogging efforts meant to rein in money in politics. It would be sad to see the IRS and the FEC let 501(c)(4)s off the hook on their “social welfare” purposes and it would be sad to see Democrats give up on the “DISCLOSE” legislation and join the secret political donors’ gusher.

Here at NPQ, we have said this for years: Campaign finance reform is – or ought to be –a nonprofit sector issue, even though most nonprofits have dismissed it as out of their ken. In light of the (c)(4) dynamic of the 2010 elections, we would add, it’s time not only to reign in the purchasing of political campaigns, but to require disclosure of the donors that are trying to do so.—Rick Cohen