May 18, 2011; Source: Wall Street Journal | Liberals and conservatives have responded in knee-jerk fashion to two recent federal initiatives that they say will constrict the freedom of political speech. One is the IRS’s hint that it might apply the gift tax to donations to 501(c)(4) tax exempt organizations. The other is the president’s contemplated executive order to require federal contractors to disclose their political contributions.
The Wall Street Journal editorial page concludes – based on what, we don’t know – that the gift tax was only meant to prevent wealthy people from divesting themselves of assets to avoid the estate tax, and contributions to (c)(4)s have not been traditionally part of estate tax avoidance schemes.
This line of reasoning is a little odd, since one of the most significant victims of this new policy would be George Soros and other Democratic donors who have been pumping money into liberal (c)(4)s in preparation for President Obama’s 2012 reelection campaign. Why would the White House want to punish Soros’s political speech? (Everybody knows campaign finance reforms are meant to silence the Koch brothers, right?)
Similar opposition exists to President Obama’s contemplated executive order that would require all federal contractors – presumably including nonprofit vendors – to disclose their campaign contributions, with some Democrats such as Senator Claire McCaskill (D-MO) signing a bipartisan letter of opposition. McCaskill, Steny Hoyer (D-MD), and others argue that such disclosure would amount to a political vetting process, requiring the directors and officers of contractors to declare their personal, as well as corporate, contributions to the party in power in order to get federal contract awards.
Oh, please! Let’s face it. The White House knows which contractors are giving to whose PACs and 501(c)(4)s. Members of Congress know, and the contractors certainly know. It’s the public that doesn’t know – but should know and has a right to know how federal contractors are plying federal decision-makers with campaign contributions. With every new campaign finance control, the powerbrokers find new ways to circumvent their secret avenues of influence over government. Nonprofits concerned with small “d” democracy in contrast to large donors of the left or right buying their way to political influence ought to be standing up for transparency of political donations. –Rick Cohen