August 22, 2010; Source: Detroit Free Press | Expect more articles like this one from the Detroit Free Press about the lack of disclosure by tax exempt groups—501(c)(4)s—engaged in political advertisements during campaigns.
Groups that produce “issue ads” that attack or support candidates without explicitly telling voters who to support don’t have to disclose who funds them. As one Michigan lawyer noted, “It all comes from the fact that people don’t invest money in campaigns for selfless reasons, and we need to know who is putting money in.” While 527s have to disclose to the FEC the names of their donors and the size of their donations, (c)(4)s don’t. They are outside of the FEC’s oversight, putting them into the enforcement realm of the Internal Revenue Service.
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A Washington Post article from August 22nd noted that the IRS is poorly suited for this task, since it only really enforces after it receives a tax filing (a Form 990), which can routinely be given two, three-month extensions before filing. The result is that enforcement occurs a year or two after the potentially illegal action (such as explicitly calling for voters to vote one way or another) by a federal agency whose mission doesn’t include electioneering issues.
Republicans opposed legislation that would have compelled increased disclosure of donors behind these political issue ads, the bill dying in the Senate during the summer. But some Democrats and many nonprofits were also opposed to disclosure of donors and their donations. The disclosure debate has been caught, like many others, in Washington’s Democrat-vs.-Republican polarity, making public discussion of the pros and cons difficult to discern.
It may be time for a clearing of the air around disclosure. It may be time to question whether historic provisions for keeping donors’ names and contribution amounts confidential, meant to protect donors from political harassment, are really necessary. It may be time to question whether political donations really are or aren’t the equivalent of free speech, and whether concealing the donors behind issue ads—now the province of 501(c)(4)s rather than 527s—is a healthy or unhealthy development in our democracy.—Rick Cohen