October 22, 2010; Source: New York Times | In the wake of the Supreme Court’s Citizens United decision earlier this year, unlimited anonymous corporate spending to influence political races has become one of the big nonprofit stories of this election cycle.
In six Congressional districts in New York State, nonprofit groups spent $1.1 million between September 20th and October 19th. In comparison, the combined expenditures of the Congressional campaign committees of the Democratic and Republican parties amounted to only $920,000. According to the Times, almost all of the nonprofit political expenditures have benefited Republicans. Among the organizations pouring money into these races are American Crossroads, the 60 Plus Association, Americans for Job Security, the Center for Individual Freedom, and Citizens for Strength and Security.
This story from the Times filled with unintentional irony. The American Crossroads webpage calls for “a new paradigm of transparency” in contrast to the idea of “government…[as] a ‘black box’ to its citizens: unknowable, inscrutable, and above all, unaccountable.” Apparently, the “black box” that hides the identities of the corporate donors to 501(c)(4)s is the exception that proves the rule of the transparency paradigm.
Crossroads (created by former Bush aide Karl Rove) is a “superPAC”, whose donors are identifiable. Nearly half of its money comes from the people who financed the “Swift Boat” attack ads against John Kerry, including $7 million from Texas custom homebuilder Bob Perry. But the sister organization to the Crossroads PAC is Crossroads GPS, a 501(c)(4) whose donors are anonymous, outside the Crossroads paradigm.
Favoring transparency and opposing Obama, Reid, and Pelosi as “powerful leftists operating totally in secret” is the Center for Individual Freedom, another 501(c)(4) whose donors’ identities are not for public consumption. Organized as a 501(c)(6) business association, Americans for Job Security also doesn’t disclose its donors, though attorneys at the Federal Election Commission in 2008 suggested that it operated more like a PAC than a trade association and should have been required to reveal its donors (Republican members of the FEC blocked action against AJS).
The nonprofit sector’s long-protected standards of donor confidentiality have been skewed and warped in the wake of Citizens United. Keeping the names of donors anonymous who give to electorally active 501(c)(4) organizations is a mistake—a misuse of nonprofit confidentiality rules. It’s time to require disclosure of donors to 501(c)(4)s, or else we have simply created yet another loophole for unnecessary, untoward corporate and special interest influence in the American electoral process.—Rick Cohen